To all my clients who I’ve told that the market really slows down in late July and August, you now have permission to slap me.
Thanks to the Brexit, interest rates came crashing down to new lows and the market turned over like a roller coaster. There are now so many people looking to buy a home and so few homes available that things are shifting. Both the demographic and price point have changed drastically – but not necessarily how you would think. Every news source likes to remind us there are two constants in the real estate market – Millennials aren’t buying and prices aren’t affordable. Well, forget all that.
The whole mantra of “Millennials don’t want to buy because they are saddled with student loan debt and they don’t want to be tied down” is sooo last season. Take the already-hopping Washington D.C. real estate market, add low interest rates and a housing shortage and you’ve got a party. This party has suddenly dropped quite a few first time buying Millennials at our door, looking for the location of the secret club. That is, where is the place to buy a house?
DC finally has some real exciting activity happening in neighborhoods that have long been slated for redevelopment and change. The locals mostly refer to this part of DC as “East of the River.” (Anacostia River, not the Potomac.) Just last fall, there was lots of talk about the changes coming to neighborhoods like Anacostia, Congress Heights, Hillcrest and Deanwood. But last spring we were all hearing that, and last year, and the year before that and many years before that. You get it. Those “promised” changes seemed to be moving at a snail’s pace – for those already living there as well as for those looking to buy but priced out of other neighborhoods.
Many of the new developments will have apartments for rent as well as residential homes for purchase – mostly condo but some townhomes appeared in the mix. Some of these projects are approved and some not, meaning this could play out slightly differently. But for those in the market, the point to focus on is the retail and office space coming to these neighborhoods. The neighborhoods East of the River have long been lacking acceptable retail options. All that is about to change as these developments take hold and become the new neighborhood anchors, bringing a redefined sense of community with it.
Right now, it’s the renovations of existing rowhomes that are appealing to first-time buyers. Since a glance at the map indicates much of the development will be in the Anacostia area, it makes sense that ownership of existing homes in the surrounding neighborhoods is in high demand. This feels quite sudden to me since I spent a lot of time hunting in these same neighborhoods all through the Fall of 2015 to year-end and those clients found their options to be bleak. But now? Oh, how can I describe what is happening now?
How about a cute little rowhouse, not more than 1000 square feet but renovated impeccably, getting almost two dozen offers in the first weekend on the market. Or how about a handful of canceled open houses when offers were accepted after just a day on the market. Usually sellers want to hold the open house to garner as much interest as possible and create a client database for their next house flip. But this market is slightly different and sellers know that. They realize they aren’t dealing with a buyer who will bid up a price $100,000 like they might in AU Park, so they aren’t delaying ratifying an offer over the possibility of getting a few thousand more dollars if they stayed on the market long enough for an open house.
The house style and type, the small yards and square footages around 1000 feet are appealing to first-timers, most of whom are Millennials. They always wanted to buy into an area where they can walk to things, hop on the metro and not feel far from downtown – that hasn’t changed. But what has changed is they can now afford it. The price point in Anacostia and its surrounds is very steady – the renovated rowhouses around 1000 square feet are consistently selling in the low to mid $300,000’s and the promises for the future are now coming to fruition.
It’s time to go east, people. It’s all starting to happen there now.