It may be cold outside, but Washington, DC is hot!
Over the past year, five Washington area zip codes moved into the top 30 nationwide when it comes to "fix and flip" activity. It seems that trendy young buyers have been eyeing these neighborhoods for some time now, and have pushed them to new heights of desirability. This is a great time to be a real estate investor, independent builder or developer in the DC area.
Without further ado, let's dive in to see what zip codes offer real estate investors the biggest bang for their buck.
RealtyTrac’s “Top 30 Hipster Zips for Home Flips” profiles neighborhoods where young buyers want to live. “Hipsters have a vision for what they want in a home and neighborhood and are willing to pay for it… and many hipster hot spots are urban core neighborhoods with plenty of older homes in need of renovation,” says Daren Blomquist of RealtyTrac. Not satisfied with formica counters, dated tile bathrooms and old wall-to-wall carpet, this crowd of HGTV buffs love renovated homes. In these select zip codes, 25 to 34-year-olds make up at least 25 percent of the total population, according RealtyTrac.
Characteristics of these neighborhoods include:
- Fixing and flipping resulted in at least a 50 percent return on investment in 2015
- In 2015, at least 10 condos or single family homes were flipped successfully
- In 2014, at least 20 percent of the population walked or used public transportation regularly
- The population share of this age group increased between 2013 and 2014
In DC proper, the hottest zip codes, 20002 and 20032, include Ivy City, Eckington, Trinidad and the H Street corridor, as well as Congress Heights and Washington Highlands. Suburban Hyattsville, MD -- zip codes 20781 and 20782 -- and 22305 in Alexandria, VA, also made the list.
For independent builders, renovators and developers, this is good news; the even better news is that all signs point to a continuing trend.
Helping to fuel the market is the accessibility of fix and flip loans in the DC area, and the availability of properties suitable for renovation. Interest rates are trending slightly higher yet key factors such as inventory and demand are in flippers’ favor. “Inventory remains very low, and demand still remains high,” said Mike Alderfer of Redfin. “DC is becoming a city where people just really want to live.”
In popular DC neighborhoods, it is not uncommon for homes to sell above original listing price. The median home price in the district rose almost five percent in 2015. According to a recent Washington Post article, Congress Heights saw the highest annual gain in sales price in the area, up more than 26 percent to $215,000; it also accounted for the highest percentage of cash sales.
This all bodes well for local independent builders and developers. If you want to take advantage of current trends in the Washington area, Walnut Street Finance offers private money loans. Our team assesses each project on its merits and we know the importance of acting quickly.
Let us "partner" with you on fix and flip projects to keep the momentum going in Washington, DC!