2021 Washington D.C. Real Estate Market Investing Forecast

Note: Our market forecast includes data from Washington DC and data from the surrounding area including Arlington and Alexandria.

Why should you consider Washington, DC for real estate investing?

Washington, DC is perhaps best known as the nation’s capital, but it’s also a thriving city in itself. The city, formerly known as the District of Columbia, has an estimated 705,000 residents and is divided into 131 different neighborhoods.

Because Washington, DC is bordered by both Virginia and Maryland, its reach extends well beyond the city limits and offers investors numerous options no matter what your investment strategy is.

The state of the market

While the Washington, DC real estate market has undoubtedly seen some ups and downs during the Covid-19 crisis, it is worth noting that many of the indicators we examined predict a path to recovery. To give you an idea of ​​what we mean, we’ve highlighted three key trends for your review. See below for more information.

The shortage of storage rivals the rest of the nation

Right now, one of the biggest problems facing the real estate industry is a widespread shortage of inventory. Unfortunately, DC is no different in this regard. However, it is important to note that the city’s inventory is in line with the national average. Additionally, the number of multi-family housing permits issued has far exceeded projections, which is a good sign given that many more housing options are currently being built.

The vacancies are rented

In many other major cities in the country, the pandemic has led to an explosion in rental vacancies. The theory behind the surge is that tenants have left high cost of living areas now where they can work remotely. In Washington, DC, rental vacancies are down 0.4% year-over-year, which is good news for landlords.

Financial health indicators are above average

Finally, it should be noted that both the foreclosure rate and the crime rate in the country’s capital are below the national average, despite the huge financial burden that came with a pandemic. If so, it is likely that many of the increased safeguards put in place during the pandemic, including leniency measures, contributed to the low numbers.

Washington, DC, Residential Demand Indicators

All data and graphs are from Housing Tides by EnergyLogic.

Despite some setbacks from the pandemic, urban housing demand indicators show that Washington, DC is on the way to recovery.

Like countless other major cities, Washington, DC, has seen unemployment spike due to the coronavirus pandemic. Although unemployment peaked at 9.8% in April 2020, it should be noted that this figure is nowhere near the national average of 13.3%. Since then, with the city reopening, unemployment has fallen significantly. It is now only 6%.