After a year of economic ups and downs and plenty of political uncertainty, 2016 ended up a relatively calm year for Washington’s real estate market. Plenty of individual neighborhoods in our area saw significant swings, but overall we continued to see strong levels of activity that is well balanced between buyers and sellers throughout the region.
As a new era in Washington begins, here are a few trends we can expect to see in 2017:
Bigger is not always better
In Washington and its surrounding suburbs, we continue to see muted enthusiasm for McMansion living. No longer the suburbanite’s “dream home,” McMansion-style homes with huge footprints in cookie-cutter neighborhoods are being traded in. Smaller homes are coming back into style as home buyers seek out prime locations, character and amenities over size and square footage. This trend will continue to impact the market thanks in part to millennials’ demand for housing that offers a low-maintenance lifestyle with easy access to work, dining, shopping and entertainment.
High-rise apartments and condos are a great fit for the millennial generation, making vertical living a huge trend in recent years. As more and more millennials achieve job security, marry and start families, we can be sure many will enter the market this year. With high walkability and endless amenities such as roof decks, pools and parking, vertical living can be a great way for these millennials to enter into homeownership. It’s also a popular option for baby boomers who are moving back to the city to enjoy Washington’s cultural attractions along with convenient access to high-quality medical care. We expect to see the vertical living trend continue to grow in 2017, with several more high-rises now under construction and other existing buildings being converted into residential properties, such as the Adele at 1108 16th St. NW.
At your service
For buildings to compete for residents and renters alike, full-service apartments and condos are becoming more popular than ever. Endless amenities such as roof decks, pools, 24-hour concierge, dog parks, fitness clubs and shopping in the building are quickly becoming the norm. It will be interesting to see where this trend goes in 2017 and what the building owners will come up with next.
Low inventory, higher prices
Low inventory in the Washington area housing market continues to push up the average sale price of a home. While it is great to see home prices rising in a post-recession era, this trend continues to place pressure on the availability of affordable housing in the city, which is likely to remain a challenge this year.
With an ongoing lack of affordable housing, 2017 may continue to see Washington’s low-wage workers migrating out of the city in search of affordable homes. As those workers leave, they are replaced by middle- and higher-income workers moving into these luxury high-rises as well as the more expensive, less available homes currently on the market. This trend is causing some concern and will be one to watch for its impact on our neighborhoods and the market itself. We’ll also keep an eye on the boomers this year. As their home equity increases, many in this generation are anticipated to move, sometimes to new markets.
If you’re thinking of buying or selling in Washington in 2017, it’s important to know how the market has changed in recent months. With more big changes on the horizon, it will be important for both buyers and sellers to be able to adapt as these trends continue to evolve.
Cindy Ariosa serves on the board of directors at Rockville-based multiple listing service Bright MLS (formerly MRIS). She writes an occasional column on the Washington-area housing market.