The D.C. real estate scene is always in motion and the majority of neighborhoods in the district have recovered well from the recession and resulting downturn in the housing market. Focusing on data from 2010 to January 2016, I was able to get a fairly good picture of the trends in the market. I specifically focused on multifamily properties in D.C. and compared the fluctuations in month-by-month and year to year in median per-square-foot value. Looking at the data from the perspective of per-square-foot value accounts for variations in size of properties, of which there is a lot in D.C., and allows comparison on pure valuation of the real estate.
What is most important, at least to investors in the small multifamily real estate market, is the current trend in rent values. Investors are looking for areas where rent is increasing, so that they can acquire a property with potential for higher future rental values, or alternatively acquire a property in an area in which its future value will be increased by rental values trending upward.
When analyzing the data I focused on the percentage change in per-square-foot rental value from January 2015 to January 2016 and from August 2015 to January 2016 to get a sense of the yearly and semi-annual rates of change in the various D.C. neighborhoods. It can be useful to look further back for longer term trends, but for this analysis I wanted to see which way the trends are going as of right now – a “breaking news report” of sorts.
In terms of yearly change, Kingman Park is number one, with per-square-foot rental value increased 12.28% from 2015 to 2016. Carver is number two at 11.62% increase, and is interestingly enough, the only neighborhood that makes both the annual semi-annual top ten lists. This shows that there’s significant fluctuation in value growth, especially among the yearly top ten list, where the range is 8.8% to 12.28% yearly but for the same neighborhoods ranges from -0.55% to 4.83% for their 6 month changes. This is indicative of a slowing in growth following high rates in the first 6 months of the year.
The yearly values for the top ten 6-month neighborhoods range from 2.01% to 11.62%. However in this case the rates are much closer to the 6-month values in most cases than the same comparison for the yearly top ten. This would suggest that these neighborhoods are experiencing current growth, as well as generally sustaining growth patterns from earlier in the year, as compared to the yearly top ten where it seems like the growth was primarily in the first part of the year and has since fallen off measurably.
This was a brief snapshot analysis.
Please feel free to comment or offer any corrections or criticism.
Full data: DC neighborhood median rent per sqft.