The statement that all real estate is local is shown to be true by taking a look at the Washington DC real estate market. This is the market I work the most in mortgage business, and I see the data first hand. Real estate prices seem to be holding up except for a few pockets in some neighborhoods on the edge. Condo sales, as an example, are way up, a 34% increase for 2009!
I am sure the first time home buyer’s tax credit does not hurt, but the tax credit is available nationwide, and other markets are weak or severely damaged. Why not the Washington DC market?
Also helping are low interest rates and a strong job market in Washington DC, due not only to government jobs, but also technology, legal, and banking.
I have seen multiple contract offers, above asking price offers, and I have seen homes sell within days of being on the market. I have seen this on homes, as well as condos. And rents seem to be strong in the Washington DC market as well.
I don’t want to create the illusion that there is a boom in DC real estate, but things seem very stable here.
However, as far as condos, northern Virginia is also faring well. Arlington and Alexandria will probably be the first areas to see any rise in prices with just a 1.4-year supply of new units. D.C. has a 1.8-year supply. Suburban Maryland, however, has not fared so well. Overall new condo prices dipped 3.7% in Washington DC, 6.2% in Northern Virginia and fell 6.9% in Suburban Maryland.
Whether you agree with big government responses to our economic problems (were they the cause too?), the large government presence here in the Washington DC market offers some insulation to the economic ravaging some other parts of the country suffer from.