Falling Rents in Washington D.C. a Product of Satiated Demand
If you build it, they will come down. They, of course, being exorbitant rental figures in the nation’s capital.
The District of Columbia sports the third highest rent in the United States yet prices have begun to fall as a real estate construction boom injects supply into a seller’s market. Brian Warmoth over at Streetwise notes that Washingtonians could be on their way to spending just a ton of money of rent, down from spending a whole ton of money on rent:
“But rent has actually been falling recently, and a new report shows that from November 2013 to November 2014, rent for two-bedroom apartments in the District fell 2.6 percent – more than in every major U.S. city except Fayetteville, N.C.
That drop took the average monthly rent for a two-bedroom unit in the District to $2,760, while the average rent for a one-bedroom unit also fell to reach $1,760, according to the analysis from the the online rental site Apartment List.”
So what’s put DC in the same sentence as Fayetteville, North Carolina? It’s not the barbecue (trust me); it’s a matter of supply and demand.
“The answer probably boils down to simple supply and demand. A recent report from Real Estate Business Intelligence showed a 35 percent year-over-year increase in available D.C. rental units, with townhouses, detached homes and midrise apartments all seeing significant inventory increases.”
Washington has experienced a massive population surge over the past 5-7 years. Part of it has to with the fact that the recession didn’t hit the area that hard; the job market in particular stayed strong. Thousands of new residents continue to move to the area each month. Demand had outpaced supply.
Check out the full article (linked below) to learn more about DC’s fascinating population and real-estate trends.
Read more at Streetwise
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