All signs point to the Washington metro real estate market as being the hottest in the country. Washington home prices rose 4.1 percent in 2010, and the area was one of only two real estate markets in the United States to post year-to-year gains in the recent Standard & Poor’s/Case-Shiller metro area home-price index report. Eleven of 20 metro areas saw new index lows.
“We’re nowhere near the rest of the country,” said Kymber Menkiti from the Menkiti Group in Washington. “Our market sizzled while everybody else simmered out.”
A confluence of factors, including low interest rates, steady job growth and low unemployment — thanks in part to military and the federal jobs — have put a fire under local home sales.
“Macroeconomic factors are in our favor,” said Adrian Hunnings, president of the Greater Capital Area Association of Realtors. “Other cities are struggling with jobs, there’s relatively higher unemployment. We’ve had 18 straight months of job growth and continue to outperform the rest of the nation.”
Not only are the jobs more plentiful but they also tend to be higher paying — and the real estate market is blossoming amid that affluence.
The metro region, for example, has more 25- to 34-year-olds making over $100,000 per year than anywhere else. Burgeoning hamlets such as Shirlington, Bloomingdale, Penn Quarter and Hyattsville have been reimagined and transformed into havens laced with Caribou Coffee shops, brick-oven pizza parlors and Harris Teeter grocery stores catering to this demographic.
But there are many other reasons homebuyers find the area attractive, starting with the cultural mix. Add in professional sports, some of the best restaurants anywhere, hundreds of years of history and, of course, the opportunities and excitement found at the nation’s political center.
There is also a wide range of housing choices — with miles of suburban bliss offering everything from McMansion Colonials to historic townhouses and ultramodern condos. Hot urban options extend eastward from 16th Street to the Maryland line, encompassing the energized U Street corridor, and north to Columbia Heights, with more housing and redevelopment on the way in neighborhoods like Shaw, Brookland and Michigan Park.
Converted condos, duplexes, Victorian- and Wardman-style rowhomes and italianate mansions can all be found within a 10-block stretch of Washington.
But it’s also no longer just about Northwest D.C., Alexandria, Arlington, Bethesda and Capitol Hill. The planned Base Realignment and Closure process will reinvigorate the Route 1 corridor in Virginia, and Potomac Yards is slated for redevelopment. A new subway line to Dulles Washington International airport will be followed by more development in Loudoun County. Buyers are flocking to neighborhoods close to Metro stations.
Younger buyers are focused on interest rates and are looking to be near the action, said Karen Trainor, Northern Virginia Association of Realtors Board chairwoman and a managing broker of a Weichert office in Loudoun County. Properties close to Metro are the hottest.
“Anything under $600,000 will sell with multiple contracts,” she said. “I’ve had three scenarios in the last week — having multiples on properties — even on $800,000 and $900,000 homes.”
The latest data show that sales are picking up across the region.
RealEstate Business Intelligence found the region had a 33 percent increase in contracts signed in February over last year, for the largest increase in more than a decade.
“It feels like spring has already come,” Menkiti said. “January and February were slow, but things are really moving now. We’ve sold $35 million so far this year.”
Contracts are up 5 percent and settlements up 11 percent for single family homes in the District over last year, and prices are up by 3.2 percent, according to Metropolitan Regional Information Systems, the area’s home listing service for real estate agents.
Prices in Northern Virginia are up 6 percent from last February, with Arlington at 9 percent, and Falls Church City at 19 percent, leading the way, according to the February MRIS data. New pending sales are up 23 percent in Northern Virginia over last year.
In Montgomery County, data show contracts up 8 percent and listings up 14 percent over last year even as prices dropped 4 percent.
“We’re the only city in the nation where sales are booming,” said Trainor.
