The housing and real estate markets can be tumultuous at times, and that can make it difficult for people to know how and where to invest their money. However, thanks to limited housing availability and increased demand in the DC area, luxury real estate is a prime investment. Here are some of the reasons why buying now could truly pay off down the line.
Some Important Facts
In order to truly understand the reasons why investing in luxury property in the DC area is a great move right now, it’s important to take a look at some facts and statistics.
- DC is One of the Top US Markets to Watch for 2018 – The Emerging Trends in Real Estate survey conducted by the Urban Land Institute and PricewaterhouseCoopers claim that DC is one of the most attractive places to buy this year.
- A 32% Increase in Property Value in 2017 – Information from Redfin shows that the average price of a luxury home in the DC area topped out in the top 5% of the national market last year at $2.708 million, an increase of more than 32% over the last year.
- Second on the East Coast for Sales of Million Dollar Homes – PropertyShark reports that 2,759 closings on homes valued at a million dollars or more took place in the DC area over the last three years, making it second only to New York City.
- Homes Sell for Higher than Listing Prices – Zillow pointed out this statistic from 2017, which shows that luxury homes in the DC area are in such high demand that bidding wars are commonplace.
Why is Competition Growing?
Though there are undoubtedly many factors that have led to increased home values and more demand for luxury properties, the real driving force is the city itself. Over the last several years, DC has changed, and it is no longer the “government” city that it once was. Things like family-friendly entertainment, an exciting culinary selection, and a variety of top-notch colleges are attracting a little of everyone. Locals are snagging up properties, and people are moving across the country to get in on the action. Even foreign investors are ramping up their activity and buying multi-million-dollar homes.
A Limited Housing Supply
Finally, one of the biggest reasons to invest in real estate right now is the limited housing supply in DC. It’s a small area, which means new development is quite limited. As a result, those moving to DC, or those making the transition to a luxury property, are forced to choose from homes that already exist. Skyscrapers are off-limits in the area, so office space takes up much of the city’s ground-level square footage. Finally, about 1000 people are moving to the area each month, which is also driving housing demand while continuing to limit availability.
Of course, investments are not all about what has happened in the past and investing in real estate requires predicting the future. Per industry experts, demand will only increase in DC in the coming years as more and more young professionals seek opportunities in the technology field. As the population grows, home values will continue to skyrocket, and that is what makes an investment right now a solid choice.