These days, it has almost become a cliche that major U.S. cities situated near the coasts have outrageously expensive real estate. Yet the truth is that while many of these cities certainly have plenty of high-end properties, they also feature strong small to mid-range markets for buyers and and those interested in real estate investment.
The Washington D.C. real estate market is no exception. According to recent statistics compiled by Long & Foster Real Estate, homes in the luxury category (where prices typically begin at $1 million) comprise only about 12.8 percent of all listings within the area.
Washington D.C. remains a vibrant market for small to mid-priced listings, with the median home sale price now at $517,000, according to the most recent data from Zillow. While the common perception might be that D.C properties are expensive, the numbers show that the sub-million dollar real estate market is by far the area's largest opportunity and local demand for these properties remains heavy -- something that should be of particular interest to buyers, builders and investors.
Why opportunity abounds in the DC real estate market
In recent years Washington D.C. has been a seller's market for property owners, thanks to limited inventory, rising prices and lots of bidding competition among buyers. According to data reported by the Washington Post, D.C. real estate moved quickly in 2017, spending an average of only 27 days on the market before being sold. This is significantly lower than the national average (80 days on the market prior to sale).
Another key indicator of the opportunity within the D.C. market is reflected in the number of sellers who receive more than the listed asking price. According to data from Zillow, one in four homes in the district sold for more than its asking price in 2017 -- and increase of nearly seven percent over the previous year. On average, buyers paid nearly two percent more for these properties.
What does this mean for builders and investors?
The numbers tell the story - the Washington D.C. real estate market continues to be one of the nation's most desirable. Additionally, contrary to some perceptions, the vast majority of properties within the district are valued at less than $1 million.
Because inventory in the district is limited and demand is high, it represents an attractive opportunity for builders and developers eyeing an entry into the small to mid-range property market. Few markets can match Washington D.C. in terms of desirability and demand, and the city's position as the nation's capital offers long-term stability and security for developers and investors, as housing (rental and otherwise) should always be at a premium.
If you're a developer or builder looking to expand or make a real estate investment, the Washington D.C. market is an attractive option, particularly for those in the small to mid-sized market. Finding a trusted and reliable financing partner can help make the process as painless and profitable as possible.