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In the simpler days of 2010, just one in 10 single-family homes in D.C. sold for more than $1 million. Of course, that was an unthinkable price for most Washingtonians in the immediate aftermath of the recession. But in a city that weathered the downturn relatively well, and whose wealthiest 10 percent of residents have rarely hurt for cash, it was a manageable figure.
The next year, with the economy slowly improving, the share of houses selling for seven figures rose slightly, to 12.9 percent. A year later, it held steady. And then it went nuts.
Between 2012 and 2013, the share of million-dollar house sales jumped from 12.9 percent to 17.3 percent, according to an economic report today from the office of the D.C. Chief Financial Officer. In 2012, 458 million-dollar houses sold; in 2013, that number was 689—a 50 percent increase. Last year, the trend continued, with 734 houses selling for more than $1 million. Million-dollar house sales comprised 18.2 percent of total sales.
Here are the data:
Million-dollar condo sales, as you can see, remained a relatively small share of total condo sales, at just 3.6 percent—not far removed from 2010’s 3.1 percent. But in absolute terms, they’re becoming more common, rising from 72 such sales in 2012 to 128 in 2014.
The report also forecasts two changes in the D.C. rental market. The first would appear to be a promising one for renters: Apartment vacancy is expected to rise sharply over the coming years.
But don’t get excited: That’s not expected to translate to falling rents. According to the real-estate information firm Reis, which produced the numbers, rents will continue to rise by more than 2 percent annually, even as vacancy doubles from its 2012 level. (Reis’ Michael Steinberg says that the company made its forecasts based on the current real-estate fundamentals and construction pipeline, plus economic and demographic factors. The specific forecasting model, though, is “proprietary,” he says.)
The bottom line is that even as D.C.’s housing inventory continues to rise, many Washingtonians will continue to struggle to afford to rent or buy housing. As fast as housing construction seems to be taking place in D.C., it’s not happening fast enough to bring down costs.
Image via Shutterstock