The housing market may be in a historic slump. But some areas in the nation's capital are booming, both out of eagerness for Barack Obama's presidency and anticipation that Washington D.C. -- as much as New York City -- is now a financial epicenter of the country.
Prospective buyers are plucking up houses from the D.C. market at rates that are surprising some of the oldest and most respected real estate agents in the city. To be sure, Washington is facing many of the same challenges that have emerged across the country. But there are several factors that have kept demand in certain parts of the city at high levels. Much of it is excitement about the incoming administration, which has made Washington a Democratic Mecca of sorts. A lot of it, however, is a need or desire to be near the money, which in this economic climate seems destined to come from Congress as much as Wall Street.
"The current economic crisis is an extremely important factor driving this market," said John Vardas, one of the cities major realtors, who works with TPR Sotheby's International Realty, Georgetown. "This is the major city in the world. And because of the current economic crisis people are going to find it a necessity to be here. They are going to have to be in the place where the major decisions are going to be made."
Indeed, with Congress set to inject trillion of dollars into the nation's economic system and with much of that process to be dictated by the White House, the financial industry is undergoing not just a philosophical shift, but a geographic one.
Noting that Washington was one of the top five cities that Forbes Magazine predicted would have a real estate market rebound, Vardas described the incoming clientele: "They feel Washington D.C. is a popular and important place. It is extremely international now. This is now a destination place for people who are celebrities, very high placed businessman and politicians because things are happening now in this town. There is a sophistication that has grown and augmented itself in the past ten or 15 years."
The trend actually precedes Obama's election, with a fair number of million-dollar homes being bought off the open market (according to city property records. But the president-elect has added to D.C.'s allure. In Georgetown, one of the city's priciest neighborhoods, houses are being purchased for massive sums. In October alone, ten properties were sold at prices ranging from $900,000 to $5.7 million, according to property records. In the Kalorama area (as upscale as Georgetown but not as chic), three properties sold for more than $2 million in September. An additional three went for more than $1.4 million.
All told, 34 houses were sold in Georgetown in September. An additional 42 have been purchased in another uber-political area of the city: Capitol Hill. Many of these are people relocating within D.C; but a healthy portion are migrants to the Capitol.