As a regional market without a major port or transportation hub, the warehouse market in Washington relies heavily on two sources of demand.

The first is retail sales. In addition to stocking all the stuff sold in area stores, warehouses have seen new demand as retailers seek to trim brick-and-mortar costs by reducing in-store inventories and taking advantage of more efficient supply chain management.

The other main driver of warehouse demand is residential construction. A hot home-building market can significantly increase demand for warehouse space to house building materials.

Currently, the local warehouse market is benefiting on both fronts. Retail sales are at their highest level in history in the D.C. area, at almost $100 billion in the third quarter of 2014 alone. The retail sector profited from Washington’s relative insulation from the recession, as retail sales dropped by only 11 percent from their peak in 2007. The buying power of residents is also greater because of median incomes that are among the highest in the country. Over the past five years, retail sales have averaged strong year-over-year growth of 5.2 percent.

While not as substantial in its impact as the retail sector, the housing market has made enough of a comeback to increase demand for warehouse space. Single-family housing starts have slowly increased after bottoming out in 2009, buttressed by strengthening home prices around the region. Over the past two years, housing starts have averaged 12,700 per quarter. Current construction levels are still well below those in the early 2000s, suggesting that new home construction could take off in the near future if the housing market improves even further.

All of this makes the Washington, warehouse market a bright spot in the real estate sector, with over three years of uninterrupted positive net absorption. Warehouse tenants have leased more than 6 million square feet since the beginning of 2012. Vacancy rates have declined by about 3.5 percent from pre-recession highs, and further declines are almost certainly on the horizon.

Ethan Vaisman is a real estate economist with CoStar in the District..