The causes for this rise are numerous and much like anything in the economy no one factor can say why homes in DC will cost more next year. The one economic stimulus that experts point to is the dependency of government jobs.

Typically in times of economic depression the government will see a flux in new hires from people looking for secure jobs and good benefits. Whatever the cause for the increase we can expect to see a nice little upswing in the DC market for home cost in the upcoming year.

What does this all mean for DC? A rise in the cost for homes could mean an increase in tax revenue for the city. More taxes could mean more city services (transit, police, fire). As fuel and living cost rise, cities with excess cash can position themselves to attract younger residents looking to enjoy life.

Community developers should be looking to create a lifestyle in their community, not just a place to live. Many of today’s buyers are looking for an exciting place to live, not just a place to live; walking to shops, casual eating and light entertainment will bring new buys in and make them stay.

If the cost of housing goes up in DC, and there is an influx of cash, urban developers should focus on creating communities that will attract buyers for years to come. It would be foolish of DC to pass up an opportunity to excel while other markets are stagnant.

With proper planning and superior execution DC can position itself as a city that lets people work and play in a safe and friendly environment. If the market predictions are right, and DC does see in increase in home coast and in turn tax revenue, what would you like to see the city do to improve the quality of life?

The causes for this rise are numerous and much like anything in the economy no one factor can say why homes in DC will cost more next year. The one economic stimulus that experts point to is the dependency of government jobs.

Typically in times of economic depression the government will see a flux in new hires from people looking for secure jobs and good benefits. Whatever the cause for the increase we can expect to see a nice little upswing in the DC market for home cost in the upcoming year.

What does this all mean for DC? A rise in the cost for homes could mean an increase in tax revenue for the city. More taxes could mean more city services (transit, police, fire). As fuel and living cost rise, cities with excess cash can position themselves to attract younger residents looking to enjoy life.

Community developers should be looking to create a lifestyle in their community, not just a place to live. Many of today’s buyers are looking for an exciting place to live, not just a place to live; walking to shops, casual eating and light entertainment will bring new buys in and make them stay.

If the cost of housing goes up in DC, and there is an influx of cash, urban developers should focus on creating communities that will attract buyers for years to come. It would be foolish of DC to pass up an opportunity to excel while other markets are stagnant.

With proper planning and superior execution DC can position itself as a city that lets people work and play in a safe and friendly environment. If the market predictions are right, and DC does see in increase in home coast and in turn tax revenue, what would you like to see the city do to improve the quality of life?

The largest jump in prices were most notably increased in Arlington and Alexandria…cities known locally to predict the future of the DC area. Well, how can this be? In the previous blog post CNN Money predicts home prices to fall 25%, Moody’s predicts prices to fall 12-14% and I expect increased losses through the end of March, 2008. WBJ’s report proves us wrong. According to the article,

“The average selling price for a house in D.C. rose nearly 6 percent to $499,526 as compared with the city’s prices in October 2006. Alexandria prices increased 6 percent to $490,476 and those in Arlington jumped 7 percent to $556,517. In Montgomery County, homes cost on average $317,221, up 2 percent from last year.”

I don’t understand it very much either…

Now the news…
CNN Money expects DC area prices to decline another 25.1% over the next five years with the home price/rent ratios currently at 26 when they average in the 16 range. Their disclaimer under the article states: “Note: People typically won’t spend more in monthly costs to own a home than they would to rent. While prices soar from time to time, sending the ratio to exceptional heights, the relationship eventually should return to its historical average.”

While this may be some of the most shocking and quite ridiculous news I have heard in a while, one cannot help but to call it a complete overestimate for falling prices. In a recent Moody’s study I read commissioned by Countrywide Home Loans, they predict prices will fall until quarter 2 of 2008 and bottom off, and losses may sum up to another 12-14% from this past July.

The big picture…

While I do believe that prices are a bit overinflated, there is a bit of skepticism as to how much further prices may fall. During the next 12 months…
-17,000+ soldiers are returning to Ft Belvoir from overseas
-50,000+ additional jobs will be coming to the DC area, mostly governement
-the US government will have a complete turnover of positions

This may not seem like much when compared to the area, but when compared to the population of DC, currently at 581,000+, a 9%+ increase in job growth will have a significant affect on the local market. I do realize that many if not most of those who will be employed will not live in the District, but even 20% of those new employees living within the city limits will have a significant effect on the market.