Just wanted to give you the inside track on the effect on our local housing due to the new administration. Some of you may remember that in January, I shared a prediction that some areas of Washington, D.C. would benefit greatly from the influx of young professionals coming to work for President Obama’s team. It had been reported that the “best and the brightest” would turn from finance jobs in New York and make Washington, D.C. their homes as they joined the junior ranks of the new administration. Local residents and real estate agents braced for what was sure to be a sharp increase in the sales of condos in the areas that most appeal to this segment of the population.
But it didn’t happen.
If what we expected in Washington, D.C. was an immediate impact — i.e., quick buying decisions — from these new transplants, it just didn’t happen. January and February sales were very slow, and prices continued to decline each month. Beginning in March, we have seen an increase in the number of sales, but prices are still on a downward trend. Washington, D.C. is also facing an increased volume of foreclosed properties and some suggest that this phenomenon is nowhere near its end. Banks may even be holding back on listing foreclosed properties, fearing that this market will only yield rock bottom prices. So, when the market does begin to show slight improvement, there is some expectation that the inventory could increase due to the release of these foreclosed homes.
So has the Obama Administration had an impact on the sale of housing in the Washington, D.C. area?
I’d argue that the answer is clearly “no.” And I’d argue that this is not unique to this administration, but is true of most of the administrations that have come and gone over the past generation.
In the “old” days, a change in administration would bring a lot of turnover as Members of Congress moved into the D.C. area with their families in tow. Now, however, most of these Congressmen and Senators do not establish residences in D.C. and don’t bring their families with them. Instead, they commute back to their home states. This change occurred over the years and was probably mostly due to the dramatic increase in the cost of living (especially housing costs) in the Washington, D.C. area. Our government officials simply are not paid enough to afford to maintain two homes.
The Style section of the Washington Post does report sitings of upper level officials at newly purchased homes in Georgetown. So, I guess one could argue that some areas of the city have benefited from a change in administration. But I would argue that these purchases are few and far between and that the majority of those new to government work in D.C. have chosen to rent.
The fact that housing prices have declined since they began their jobs, opening the possibility of a future home purchase at a lower price, only gives credence to those who term them the “best and the brightest.”