Note: Our market forecast includes Washington D.C. data and data from its surroundings, including Arlington and Alexandria.
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Why consider Washington, D.C., for real estate investing?
Washington, D.C., may be best known for being the nation's capital, but it is also a thriving city in its own right. Formally known as the District of Columbia, the city is home to an estimated 705,000 people and is divided into as many as 131 diverse neighborhoods.
That said, since Washington, D.C., borders both Virginia and Maryland, its reach extends far beyond the city limits, which offers plenty of opportunity for investors, no matter what your investing strategy looks like.
The state of the market
Though the real estate market in Washington, D.C., has undoubtedly experienced some ups and downs amid the covid-19 crisis, it's worth noting that many of the indicators we looked at are forecasting a road to recovery. In an effort to give you a sense of what we mean, we’ve highlighted three major trends for your review. Take a look below for more info.
The inventory shortage is on par with the rest of the nation
At the moment, one of the real estate industry’s largest concerns is a widespread lack of inventory. Unfortunately, in this respect, D.C. is no different. However, it's important to point out that the city's inventory matches the national average. In addition, the number of issued multi-family housing permits far exceeded projections, which is a good sign since it means many more housing options are currently being constructed.
Rental vacancies are down
In many of the nation's other large cities, the pandemic has caused an explosion in rental vacancies. The theory behind the increase is that renters have been leaving areas with high costs of living now that they can work remotely. In Washington, D.C., though, rental vacancies are actually down 0.4% on a year-over-year basis, which is good news for landlords.
Financial health indicators are above average
Lastly, it's worth noting that both the foreclosure rate and the delinquency rate in the nation's capital are below the national average, despite the major financial strain that came along with a pandemic. In this case, it's likely that many of the increased protections that were put in place during the pandemic, including forbearance measures, have contributed to the low numbers.
Washington, D.C., housing demand indicators
All data and charts supplied by Housing Tides by EnergyLogic.
Despite experiencing some setbacks due to the pandemic, the city’s housing demand indicators show that Washington, D.C., is on the road to recovery.
Like countless other major cities, Washington, D.C., has experienced a spike in unemployment due to the coronavirus pandemic. However, even though unemployment peaked at 9.8% in April 2020, it's worth noting that figure is nowhere near the national average of 13.3%. Since then, as the city has begun to reopen, unemployment has gone down significantly. It now sits at just 6%.