RISMedia's Real Estate Magazine

JAN 2019

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

Issue link: http://remag.rismedia.com/i/1066259

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Page 77 of 118

RISMedia's REAL ESTATE January 2019 73 New York City has already seen a price increase of 1.7 percent, while the Washington, D.C., metro area saw a 3.2 percent increase. Additionally, single-family rents have increased 2.5 percent and 2.3 percent in the NYC and Washington, D.C., metro areas, respectively. As for inventory supply, NYC is at five months, while Washington, D.C., is at three, compared to the nationwide average of 3.5 months. In compari - son to the national median home price of $225,000, NYC has a me - dian price of $470,000, while the Washington, D.C., metro area has a $410,000 median price. While these markets are currently thriving, how far can growth go be - fore becoming a burden? A Look Into the Future For already high-priced markets, such as the D.C. metro and LIC, af - fordability could be stretched past its comfort zone in the near future. Ac - cording to Zillow's housing prediction for 2019, the 30-year fixed mortgage will be at 5.8 percent by year-end (at press time), and commutes will worsen as job creation continues to concentrate in urban areas—a pos - sibly unfounded move that expects a young workforce to reside in city en - vironments, instead of the suburbs in which they are largely flocking to. "The news stirred up fears of es - calating housing costs and concerns that the move would compound the already intense traffic issues," says Aleksandra Scepanovic, managing director of Ideal Properties Group, based in NYC, adding that others be - lieve Amazon's emergence will lead to beneficial growth in these areas. The biggest winners, according to Zillow? The cities that lost out on Amazon's headquarter picks. The HQ2 search helped grow awareness for the potential economic growth in these cities, bringing in more inves - tors and high-tech jobs that would normally be priced out from more traditional tech centers. The Overarching Necessity According to REALTOR® Magazine, the National Association of REAL - TORS® (NAR) research team predicts that the Washington, D.C., metro area will need an additional 1,200 single-family and 1,050 multifamily permits on average each year over the next 10 years in order to main - tain its job growth to permit ratio in the area. If there is not an increase in new-home construction, NAR says home prices would inevitably rise in order to meet the demand. With a shortage in inventory and skyrocketing home prices, those pondering home-buying may stick to renting to save, especially as mort - gage rates rise. Are there enough planned units to support a grow - ing population as Amazon calls for skilled workers for its headquarters? Experts predict the move could, in fact, spark a sorely needed boost to inventory. A RENTCafé report states that increases in apartment construction in LIC and Crystal City are very plausible. At the moment, there's a high occupancy rate of 98.2 percent in LIC, leaving little room for the incoming Amazon staff. There are, however, an estimated 15,400 units being built, and LIC is known for bouncing back—after all, the neighborhood added the most new apartments after the recession of any U.S. city, a booming 12,533 units. In Crystal City, the occupancy rate is slightly lower, at 94.7 percent— even below the national level of 95.2 percent—but only 2,100 units are ei - ther under construction or have been planned. Transportation in the D.C. metro area may, however, help allevi - ate the burden, as employees could easily access the $205,000 rental units throughout the metro using the area's transit systems. An Immediate Real Estate Reaction There's already been a shift in the LIC and Crystal City metro areas. Some zip codes have seen an in - stant reaction to the news. Redfin re- ports that agents have seen a spike in viewership of homes for sale in the Crystal City and Long Island City regions on Redfin.com. For the week ending Nov. 11, 2018, views of list - ings in Long Island City increased by 1,049 percent, compared to the same time period in 2017. For Crys - tal City listings, online views were up 217 percent year-over-year. "Traffic at open houses is up two, three, four times what it was prior to the announcement," says Wha - len. "Requests to view properties by appointments are up. The phones have been ringing steadily. Deals are getting done faster than before, often times with multiple offers at or above the asking price. Owners who have been thinking about sell - ing should get in touch with their brokers and consider listing sooner rather than later to take advantage of the frenzy of interest, and buyers should work with local experts who can help them navigate the different opportunities in new development and in the resale market. "This appears to be one of those rare opportunities that comes by once or twice in a lifetime," Whalen says. "Anyone thinking of buying or selling should get a plan in place without delay." RE Liz Dominguez is RISMedia's as- sociate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.

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