This column is written by Metro DC Houses, a local real estate team serving DC, MD, VA made up of Colin Johnson, the immediate past President for the D.C. Association of Realtors and Christopher Suranna, the current President for the D.C. Association of Realtors.
We saw a blog post at Streetsblog NYC that said that Central Park in NYC will go car free starting on June 27 and it raised a question with us; what is the value of a parking space in DC?
We found that since 2003 the value of a parking space has only gone up .79%. That’s right folks! In one of the hottest markets in the country, appreciating double digits in some areas, the price of a parking space has only gone up by .79%.
We took a look at sales of 1-bedroom condos in three zip codes since 2003 and compared prices of those with parking versus those without parking since parking spaces are often incorporated with the sale.
We chose the Dupont area (20036), Logan Circle area (20005) and Capitol Hill (20003). The locations vary in density and obviously there is a difference in changes to the neighborhoods in that time period, but the findings were interesting.
In Dupont Circle, the annual appreciation for a 1-bedroom unit with parking was 1.28% but without parking it was 1.91%.
The irony is that if you bought a condo with parking it was worth approximately $52K more, but the average stand-alone sale of a parking space is approximately $35K. The average number of days on market of 1-bedroom units does not seem to be dramatically improved with parking in Dupont either. It will take you 24 days to go under contract and we are certainly seeing that and even less in today’s competitive market.
In Logan Circle the annual appreciation for a 1-bedroom with parking was 2.37%, but without parking it was 2.69%. In this zip code, on average you would pay a whopping $82K more for a unit with parking. The days on market is a similar story as Dupont Circle’s with an average of 28-30 days to go under contract.
Finally, on Capitol Hill the annual appreciation for a 1 bedroom with parking was 3%, but in this case without parking it was 2.67%. On average, you would pay $70K more for a unit with parking. The days on market is again very similar with an average of 36-38 days to go under contract.
In pulling of the data we saw that there are more properties that do not have parking than those with parking, which is obvious because these properties are able to sell at lower price points and there simply may not be parking spaces available.
Are we a driver dependent real estate market?
We aren’t so sure, but people sure seem to be willing to pay a premium for it; however, we’re not convinced that it actually appreciates at a premium. We might also suggest that they are just different consumers; those who wish to buy a parking space versus those that wish to go without a dedicated parking space.
Many years ago, during a leadership meeting for our National Association of Realtors, a Chief Strategist for Uber predicted that future housing would lack garages and parking, but they also predicted kitchens would not be in homes which we’re not entirely sold on, yet!