[Editor’s note: Look for an analysis of the local housing market in the Fall Home Guide on Saturday and Oct. 10.]
If strong financial footing is the first cornerstone, then the next step is the right supply of housing stock. Not only did we have the right mix of single-family houses, condos, rowhouses and duplexes to meet the varying needs of our diverse population, but we also had a deep reserve of blighted housing to draw from. This is the biggest reason our real estate activity didn’t come to a complete standstill during the downturn.
Developers wasted very little time switching their approach from building new construction in the suburbs to upgrading the low-priced existing housing. During the market’s lowest ebb it was the fixer-uppers in need of extreme help that we relied on to prop up the real estate market.
The renovation and remodeling of housing stock took place in many pockets of the city, but Capitol Hill is the perfect case study to see how helpful it became once the downturn hit. What had long been a part of Washington that people once avoided has now become one of the most coveted, and highest priced, places to buy a home in the District.
Capitol Hill’s resurgence started before the recession, but it really proved its resilience once the belt-tightening times took hold. This was one of a few neighborhoods that held its own and only saw a short-lived, relatively minor decrease in activity – largely because of its convenient location combined with the prevalence of fixer-uppers.
Not only were the neglected row houses flipped into high-end housing, many of them were divided up into luxury condos which kept the profit margins high enough for the developers while still providing homes within affordable price ranges. Add to that the $4 per gallon gas prices we were seeing at the time and Capitol Hill started to look like the perfect place to live for anyone who worked in the city.
Availability of the right kind of housing is only one part of the equation. The other half of the equation is having a critical mass of buyers to purchase them. Washington has this going for it as well. We do have the federal government to thank for that, but once again it isn’t just a matter of the paychecks it provides.
It’s the mix of careers it creates which leads to a good balance in residential turnover. Career government employees that work for decades in the same agency give the market a foundation of stability, while the many short-term contractors keep market activity up as they rotate in and out of the city. These two ends of the job spectrum also mean we have a well-distributed age range, which is yet another reason why the variety of housing sizes and configurations we have available serves this city well.
The health of the District’s housing market corresponds nicely to every stock market analyst’s first piece of advice: Diversify your investments to protect your assets. We have the right combination of everything needed to keep a housing market afloat when times get rough.
Whether it’s a family who will live here for the long haul or someone on a five-year contract that might get extended or a new attorney who just needs a condo where he can sleep and eat take-out once in a while, there’s a home here for all of them.
Washington may be largely a one-industry town, but it’s the variety in the types of properties, income levels, and age ranges of the people that keep the housing market humming.
Catch up with some of David Charron’s previous columns: