The year of 2016 has been exceptional for the Washington, D.C. real estate market. Month after month, we saw the market’s key indicators—sales volume, new contracts, house prices—hit their high points for this decade. In November alone, closed sales saw a year-over-year gain of 16.5%. Our hot real estate market has lasted all year, and shows no signs of slowing for 2017.
Inventory has steadily declined all year—down 14.4% year-over-year last month—but a host of new development projects are in the pipeline. As of August, over 14,800 residential units are being constructed or are undergoing significant renovation (up 11% year-over-year). This is the third year in a row new construction records have been set.
Developers are Running to Catch Up
Demand may be higher than supply, but developers are doing their best to keep up. In total, 42% more building permits were issues between 2010-2015 compared to 2000-2009.
While there are substantial construction efforts throughout the entire city, a recent report released by the Washington, D.C. Economic Partnership (WDCEP) found that a few popular neighborhoods are witnessing the lion’s share of development efforts. Capital Riverfront, NoMa/Union Market, and Southwest Waterfront are home to 45% of residential units being developed.
Let’s take a look at these three neighborhoods, which account for nearly half of the District’s residential construction and see what they tell us about how our city is developing.
The Capitol Riverfront was the fastest-growing residential area in 2015, and it continues to be a leading neighborhood in the city. By 2018, the Capitol Riverfront will offer a home to 6,500 new residents, housed in over 2,400 new residential units and two new condo buildings. Public/Private development partnerships have invested over $4-billion in Capitol Riverfront. The neighborhood has attracted big-ticket anchor developments, including Whole Foods and the new D.C. United Soccer Stadium.
Noma began its upturn during the late 1990’s and is now seeing accelerating growth as a major urban center. The neighborhood has over 7,000 residential units in development or in the planning stages. Its base of long-abandoned warehouses is being converted into both residential and commercial units (apartments, offices, and hotels). Increasing the neighborhood’s appeal, a number of high-profile new developments are underway or have been recently completed, including an REI, a new park, and a cinema. NoMa’s success has come fast and right now the neighborhood now features the 9th highest median sales price ($715,000) among the city’s neighborhoods.
The Southwest Waterfront is moving through a multi-stage transition, headlined by a $2-billion mixed-use transformation of The Wharf. The Wharf alone will create over 650 new apartments, over 230 new condos, and hundreds of thousands of square feet for offices, restaurants, retail, and multi-use cultural spaces. Beyond The Wharf, new developments due to complete in 2021 will provide the neighborhood with over 3 million square feet of high-end condos and apartments, hotels, offices and retail—as well as a new parks and a full marina. While it’s soon to explode in popularity, the Southwest Waterfront is currently a steal, with one of the lowest median sales prices in Washington, D.C. ($319,950).
What These Three Neighborhoods Have in Common
Each of these three neighborhoods were not traditional residential hotspots. The Southwest Waterfront is transforming a barren space into a luxury city center, complete with high-end dining and nightlife. Union Market and the Capitol Riverfront were old industrial areas which are now being transformed into residential-focused neighborhoods complete with new parks and retail. All three areas are being remodeled with an eye towards mixed-used developments that aim to create highly walkable luxury live-work neighborhoods where D.C. traditionally only held ex-industrial landscapes.
In short, the three neighborhoods that saw the most development in 2016 were emblematic of the larger changes occurring in Washington, D.C. Young residents are moving back into the city, and looking to transform Washington, D.C. back into the true home it once was for its population.
At Evergreen Private Finance, we are proud of the work we do to help make this dream come true, and transform Washington, D.C. back into the vibrant city its new residents demand. If you are interested in doing your own part to contribute to this trend, contact Evergreen Private Finance today. Call us at (202) 713-9072 or email us at [email protected].
Written by: Evergreen Private Finance