Washington DC 2023 Real Estate Market

Title: Washington D.C. Real Estate Market Report 2023: Trends, Opportunities, and Challenges

Introduction

Washington D.C. real estate market in 2023. As a dynamic and diverse city with a rich historical background, Washington D.C. has always been a hotbed for real estate activity. In this report, we will delve into the current state of the market, exploring the latest trends, identifying potential opportunities, and addressing the challenges that buyers, sellers, and investors may face in this bustling metropolis.

1. The Current State of the Market

In 2023, the Washington D.C. real estate market remains strong, characterized by steady growth and increasing demand. The city's thriving economy and attractive employment opportunities have continued to attract a diverse group of homebuyers and investors, contributing to the ongoing rise in property values.

The residential sector has seen a surge in demand, particularly in suburban neighborhoods surrounding the city center. Young professionals and families seeking a blend of urban amenities and a more relaxed lifestyle are fueling this trend. At the same time, the commercial real estate market is experiencing a revival, with new businesses and startups taking advantage of the favorable economic climate.

2. Trends Shaping the Market

2.1. Affordability Concerns:

With the rise in demand, affordability has become a pressing issue for many prospective homebuyers. The influx of well-paid professionals has driven up housing prices in some areas, making it challenging for middle-income earners to enter the market. As a result, there is a growing interest in affordable housing initiatives and cooperative housing arrangements.

2.2. Sustainability and Green Living:

Sustainability is no longer a buzzword; it has become a significant consideration for both developers and homebuyers. Properties that incorporate eco-friendly features such as energy-efficient appliances, solar panels, and sustainable building materials are gaining popularity and commanding premium prices.

2.3. Tech-Enabled Living:

The city's tech-savvy population has driven demand for smart homes and technology-integrated living spaces. Homebuyers are looking for properties equipped with home automation systems, high-speed internet connectivity, and smart security features.

2.4. Co-living and Shared Spaces:

As housing costs rise, co-living arrangements and shared spaces are becoming more prevalent. Young professionals and students are opting for co-living spaces that offer a balance between affordability, social interaction, and convenience.

3. Opportunities for Buyers and Investors

3.1. Emerging Neighborhoods:

While some well-established neighborhoods remain desirable, emerging areas are offering excellent investment opportunities. Neighborhoods that were previously overlooked are now undergoing revitalization, presenting potential for long-term appreciation.

3.2. Short-term Rentals:

The city's popularity as a tourist destination makes short-term rentals an attractive investment option. With the rise of platforms like Airbnb, investors can capitalize on the steady stream of visitors looking for unique accommodations.

3.3. Commercial Real Estate:

Washington D.C. boasts a robust commercial real estate market. As businesses continue to expand and new enterprises take root, commercial properties offer promising returns on investment.

4. Challenges to Consider

4.1. Limited Inventory:

The supply of available housing has not kept pace with demand, leading to a shortage of inventory. This situation can result in bidding wars and inflated prices, making it difficult for buyers to find suitable properties.

4.2. Regulatory Environment:

Navigating the complex regulations and zoning restrictions in Washington D.C. can be challenging for developers and investors. Staying informed and working with experienced professionals is crucial to success in this market.

4.3. Interest Rate Volatility:

Fluctuations in interest rates can impact both buyers and sellers. Buyers should be prepared for potential rate increases, while sellers may need to adjust pricing strategies accordingly.

Conclusion

The Washington D.C. real estate market in 2023 continues to present a wealth of opportunities for buyers, sellers, and investors. While affordability and limited inventory remain concerns, the city's dynamic economy and strong demand offer promising prospects for those willing to navigate the market intelligently. As the city evolves, embracing sustainable and tech-driven living, it is sure to remain a top destination for real estate enthusiasts in the years to come. Whether you're looking for your dream home or aiming to expand your investment portfolio, Washington D.C. stands ready to welcome you into its vibrant real estate landscape.

The winter worries 2019

The winter worries!!

My company BCL Properties LLC continues to build a steady increase of leasing and management clients in and around Georgetown, DC. I wanted to write a small blog today on the winter worries that face property owners and some brief solutions they can use to help alleviate their anxiety.

One of the consistent challenges we continue to face is working with new property owners in the winter time. The leasing business in Washington, DC is a very seasonal business. Most businesses, schools, Embassy’s transfers are usually done in the spring or summer months with some roll over in the fall. People are generally happier when the weather is nicer and willing to spend a day or two viewing property.

Usually owners prior to contacting me have a rental amount in mind. That’s typically made up from the owner calculating their mortgage, condo fees (if applicable), management fees if they want that service and or future possible repairs which is usually around 10% of the yearly income.

Owners typically want to break even or make a small profit. I am then presented with a number that sometimes is just too high. My job is not to offend the owner as I want to sign them as a client, but rather educate to give a realistic view of what they can achieve. I try to use systematic and research driven data to provide information on pricing.

Owners may scour the internet and use various real estate websites to produce “their” number. The numbers that those real estate websites produce can be based on moving averages over months or even past years. A number of the larger scale websites are based typically more for sales than rentals. Their developers usually care more about sales data then rental data.

 What those websites fail to do is show on a consistent basis the accepted price and when that happened. A lot of websites do send an email to ask you to provide that information but by then the owners are just happy to have a tenant or just don’t want to place that data online. Some owners do provide those numbers which is where the software companies get the rented amounts from. It is just a very inconsistent system that can cause owners to be misinformed.  

As agents are required to enter data in to the MRIS system we can show the price amount obtained, days on market, and specifics about the building or neighborhood. We can view additional information that can give us specifics about pricing. We can even contact other listing agents around our listing to see how their traffic has been.  One of the even bigger factors an agent can provide is experience. As I have been doing this for 14 years and have rented probably over 1000 properties I typically have a ball park number of what the property can rent for without much research.

 Price ceilings are important to keep in mind. In other words no matter how nice the property was renovated someone is only going to pay so much for a 1 bedroom or 2 bedroom and so on. That’s another blog entirely.

With Amazon coming to the DC area it should help rental pricing over time increase. We are not there yet!  (Blog to come on this)

Below are just a few ideas/tips that I use when marketing property in the winter time. The biggest takeaway is just to be patient. The winter comes and goes and with some marketing tricks I use the property will typically rent come early spring.

My comments below are based on my experience and not concrete data. Take it with a grain of salt. It’s not set in stone but will give property owners some tips when renting in the winter months.

1.  A property owner should have a reserve of at least 4 months of carrying money. Remember at least one of those months will go towards commission when rented by an agent. A few additional months in case the property does not rent right away.

2.  Always have 2 months of reserve even after rented in case of a large repair.

3.  The “lets try your price”. I will agree to this within reason for 15-20 days. If we do get it than great. If not we have to start considering a price reduction to stay aggressive in the winter. I will talk about vacant property status in another blog post and the negative effects of that.

4.  Remember that come November your faced with the start of the holiday season. From Thanksgiving, Christmas, New Years and any additional holiday one may celebrate. Most people are focused on the holidays that rather than moving.

5.   February / March the winter months hit stronger. Unless someone is being transferred into the area the cold weather, snow, and dreary days don’t bring out tenants looking around to move. Not many want to walk around in the cold looking at rental properties.

6.  Be patient… Your agent does not make money unless they rent the property. So trust me they are working to produce a tenant.

7.  When spring hits people tend to start walking around so if you can place signs outside of the property that is still one of the best marketing techniques out there. **One benefit is that if you can start a lease in the spring the tenants will typically move out in the spring/summer positioning yourself in the better time of year for future marketing.

For additional information feel free to contact me directly at Barry@bclmgt.com

www.bclmgt.com

Design You DC Rental Property in 2018

 

IT’S TIME TO UPDATE!!

Time to set up for the spring market! Just in the past few weeks I have taken on many small construction projects as part of my services to upgrade and update properties for the rental market. January through March is a great time to get your property in the best possible shape for the rental season to come.

Some new color schemes for 2018:

Walls:

The days of off white are behind us. Depth and warmth create an atmosphere that gives tenants a sense of a home like feeling. The shades of gray I use are still neutral enough for tenants to decorate with their own style. We complete the walls with white baseboards / trim.

Kitchens:

For counter tops I am always comfortable with granite as it holds up well. However with some additional financial reach from an owner I would bump that up to quartz. The kitchen is and probably will always be the main area of a property. So don’t slack here! You need that wow factor. Stainless packages now range in pricing so it’s not just for the elite.  No need in a standard rental for subzero fridges and wolf ranges. Just make sure it is a solid product that looks good. Look for upcoming sales on holidays to take advantage of pricing.

Flooring:

I am really trying to stay away from laminates. To me they don’t hold up well and with seasonal change in DC no matter how well they are placed they always seem to buckle or bump up in areas (floating floors).  *DC inspectors are citing these issues and making owners rip out floors for re-inspection. They also don’t feel like wood. If the budget is not allowing real hardwood then a thicker engineered wood works well to be glued or nailed down. Some properties you have no choice but to float the wood floor. I believe over time causes issues especially when placed over concrete.  Even with a protective barrier the concrete gets cold and or heats up depending on season and can affect the wood. Yes I know you are supposed to leave a gap for expansion but even with the gap I have still seen laminates start to push up. Laminate and water don’t mix well. So that constant cleaning with a mop, or those wet boots from outside effect the laminate floor over time. Areas by the sink in the kitchen get the worst of it.

A great alternative is Porcelain. Porcelain flooring lasts for a long time and can withstand large weights (even cars). With new colors/styles that allow the tile to look like wood it is a strong alternative that can last longer than wood with no need to re finish.  Be on the lookout for some great deals on porcelain wood like flooring typically on sale at lumber liquidators.

Install will set you back a bit more than wood, however you only do it once if done correctly. No need for refinishing or sanding ever.

Baths:

There are so many styles and options here. For your average rental my advice would be to paint in a light but warm shade. Heavy dark reds, or greens make the bath feel dated. Light grays or deep whites work well. Some accent tile around the vanity helps lift the modern feel. New vanities that have a modern look are great.  Frameless showers are great however I have had issues with some that leak. Be careful who installs them for you. Make sure to have a specialist install the doors. Home depot has many of them to choose from. Replace that old showerhead with something new and large.

Simple : Clean : Functional

Part of my business has evolved into the re-design of property for both sales and rentals. Taking older properties that need work and creating that balance between budget, ROI on rent/sale, and design to bring the property up to 2018 standards.

One of the larger problems with condos/homes built in the 80’s and 90’s in DC is that they cant hold weight to properties that are just being built presently. They don’t look the same and many features of the property are older. The days of just throwing some paint up after a tenancy are over. With the new millennial generation coming forth and generations behind them the modern look is what is needed to keep up to new construction. Remember this is your investment property. Just like a car that needs to be detailed your invest property needs to be detailed to the point where it shows better than the competition. Many owners wonder why they are not getting the same price points as 2-3 years ago and many of those reasons come down to the way the condo looks.

For more information please contact:
Barry Lieberman

www.bclmgt.com

barry@bclmgt.com

Presidential Election & How it will effect Washington DC's Rental Business

This fall I am finding landlords perplexed with their financial situation. Owners don’t really know what to do with their property? Do they sell or continue renting. As everyone’s financial situation is different I still encourage owners to be positive and that DC is a great “bubble” for real estate. We seem to rise above other cities in the nation especially in pricing. This is probably due to the fact that DC is a very transient city. Most leases average 14-16 months with very little worry about finding a new tenant.  There is always a demand for property but the supply levels vary per season. This summer I found myself working with a number of New York City tenants moving to DC. After working with them they do feel there is more value in Washington, DC in terms of square footage, but pricing not all that different if your coming from a trendy New York City neighborhood.

The fall rental market is typically the last push of the year for landlords to secure a tenant for the winter. It is typically made up of properties that have yet to sell during the spring and summer market. History tells me that a property owner is now frustrated either at their current agent, past agent, or just the fact the property is still sitting on the market for sale. Owners may have been reaching for a price that for now is unattainable. They discover a new idea to “get through” the winter. Renting. This is a great entry point for my services to guide your property through the steps of renting in DC.

With election being weeks away some owners I have spoken with are holding off to see who wins this battle for the White House. Personally I don’t believe it will make a huge difference in the short term for rentals, but we will see. The rental market has slowed from the summer months as it usually does. The weather plays the biggest role in the next weeks to come. If the weather stays mild the market will extend into the beginning of December. If DC gets hit early with cold temps and snow there is definitely a retraction of tenants looking to move. Typically most tenants are settled now and hibernating for the winter. My experience is that customers tend to be transferred early fall for their jobs and become new clients, and or tenants during the fall season.

Plan of Action: Most clients I speak with now are working with me to set themselves up for the early spring market. We are going over TOPA strategies as some have tenants in the property along with renovations for the property to increase rental income. Placing your best foot forward in the spring will allow the property to be seen first, and create a better rental price. Yes it’s not even the end of fall 2016 and I am already setting up clients for the spring of 2017.  Part of my business is the lead time to get set up for marketing. Strategy and moving through a process creates successful returns on investment.

BCL Properties LLC looks forward to a successful winter for all landlords in Washington, DC and as always if your looking for a change in management, or new to rentals in DC we are always happy to help.