Property in Washington, DC is always in demand. The capital and surrounding areas draw people in from all over the country, with substantial employment opportunities, the benefits of living in or near the city, and some remarkable properties. But with the market going through one of its most seismic years in history, is now a good time to invest in real estate in Washington DC?
It would have been better had you bought a few years ago, or even a couple of years ago. Then you would have benefitted from the sharp appreciation in house prices the market has recently experienced. However, even if you invest now in Washington, DC, it is more than likely that you will enjoy considerable growth in the value of your home well into the future.
Is the real estate market explosion a bubble?
According to The Washington Post, no, the housing market is not a bubble. Signs of a bubble would be when most of the investors were buying houses with the express intent to flip them, probably within a maximum time frame of a year. While house-flipping has increased, it is by no means the main reason most homes are purchased today. Today, most homes purchased are by people wishing to acquire their first home and those looking for a second or vacation home. Of course, people do hope to make a profit on their homes, but they’re not speculatively investing in the hope of making a quick buck. Instead, they’re primarily looking for steady appreciation in the long term.
If the housing market is not a bubble, there is little to no risk that the market will implode. Indeed, increased migration, changing work habits, and a chronic lack of housing inventory will likely keep demand high and house prices appreciating.
Rising mortgage rates
Mortgage rates are increasing from the lows that helped fuel the frantic buying seen in recent years, helping stabilize the runaway appreciation of house prices. By the end of 2022, mortgage rates are expected to be at around 3.6%. This increase from previous years when mortgage rates were at record lows of 2.65% could vastly impact first-time buyers in Washington DC. However, Washington DC does attract high-income professionals, especially those working in STEM fields, so if you’re thinking of acquiring property in Washington DC, it may be the case that you’re able to manage the mortgage increase. If you are in a position to manage rising mortgage rates, it’s still an excellent time to buy as high demand and low inventory will keep house prices on the increase for the foreseeable future.
The all important fact of low inventory
A critical factor that has kept prices rising is the low levels of inventory across the nation including Washington, DC. New construction costs have been higher in recent years making construction prohibitive. Though government and private businesses are trying to address the shortage, we will not see a significant impact on inventory levels for at least a few years. With millennials now being the demographic looking to purchase homes, demand will still outstrip supply, making it probable that homes will appreciate continually for the next few years, although most likely at a lesser rate than the unsustainable rates seen over the last couple of years.
The best time to invest in property in Washington, DC is now. There is little chance of an implosion, drastically lowering house prices. Indeed, all the signs are that an investment will grow on later returns.
We are trusted real estate agents in the metro DC area with over 100 years of combined experience. For further information on your investment options contact us at 240.800.5155, or leave us a message at hellercoleyreed(at)gmail(dotted)com. Let’s talk about your property in Washington, DC.