National real estate figures only recently have started to creep back up from the recession that began in 2008, but Washington’s high-end real estate market has been bullish for years, and local experts project that it will remain strong in 2013. Nineteen properties were contracted or sold for more than $4 million in the District in 2012 as of November, up about 22 percent since 2011, according to Metropolitan Regional Information Systems, which tracks real estate sales in the region. Properties contracted or sold for $1 million and above are up about 17 percent since last year.
That does not include sales that closed privately, as is common with the most exquisite properties, says Thomas Anderson, president of Washington Fine Properties (3201 New Mexico Ave. NW, Ste. 220, 202-944-5000). Last year, Anderson’s firm was involved in more than half of all real estate transactions including properties that sold for more than $3 million in Washington, DC. While Northern Virginia has had a few notable listings, fully renovated properties with prestigious addresses in Kalorama, Georgetown, Kent, Massachusetts Avenue Heights, and Wesley Heights make up the majority of luxury home sales, local experts say. Some sell in just days.
Several factors are contributing to this luxury home boom. Foremost, many buyers see the area’s stable real estate market as a safer way to protect their wealth than the stock market. “We maintained our values better than any other city [throughout the recession]. People are starting to see real estate bottom out,” explains Daryl Judy, an associate broker with Washington Fine Properties.
Second, a number of buyers hold full-time residency in another locale and see an upside to buying second homes or pied-à-terres in DC, as compared to Paris, London, New York, or Milan. “Some are taking money out of the European economy and investing it in a more stable US market. They want second, third, and fourth homes,” explains Jim Bell, co-founder of K Street’s Beasley Real Estate (2020 K St. NW, Ste 600, 202-957-2272). While many buyers in the $1-million-plus range pay in cash, others take advantage of low interest rates to leverage investments, says Nancy Shahin Itteilag, an associate broker at Long & Foster’s Foxhall office (3201 New Mexico Ave. NW, 202-363-1800).
Third, sellers are listing homes at more realistic prices, which is driving the market. (Homes priced at $4 million and above sold at about 94 percent of their list price in 2012, compared to 85 percent of list prices in 2011). And finally, the city’s infrastructure, nightlife, and cultural scene have markedly improved in the past decade, creating a nice vibe within the District’s borders, explains Bell. “Washington is growing exponentially every single day. The city is vastly different than it was five years ago, and people are drawn into the excitement.”