Photo from Wikipedia
Guest post by Dan Metcalf
Less than two weeks from Election Day, do we have any idea what the aftermath of a rough campaign season will mean for our area?
It’s appropriate that we think of the election’s effects on what for many of us is our largest asset, our homes. Fear not: While this election season has provided some distraction from our local real estate market these last few weeks, Silver Spring’s sound upward real estate trajectory should continue for the following reasons:
1) Nobody leaves: A common perception is that our region benefits from election-related turnover of residents. And while certainly ours is a region on the move (the average Washington-area resident is likely to be in their home only four and a half years, compared to the national average of every seven and a half years), the reality is that for many, if not most, the nature of the work they do often keeps them in the region. This infrequency of moves contributes in part to the stability of our local market.
2) High rents versus low interest rates: While rents on either side of the D.C. line have been going up the last three to four years, this same period has been characterized by strikingly low interest rates. Couple this with the deductibility of mortgage interest and relatively consistent equity gains here, and purchasing a home in our area generally works out to be cheaper than renting in as little as two and a half yrs.
3) Low inventory: This is a little bit of a knuckleball: On the one hand, lower inventory has at times seemed to be part of a vicious circle: nothing to see means consumers don’t look, which means homes don’t sell, which means sellers don’t provide new inventory. Then it repeats.
On the other hand, structural features of our region (increasing rents, the experience of having to move to avoid higher and higher rent, relative job stability for individuals) have meant that real estate, which many think of as a highly seasonal market, has been less so (depending on weather) as we have clawed our way out of the loss of value wrought by the 2008 crisis and the Great Recession.
4) Both slopes of the bell curve: The amenities of an ever-denser and re-urbanized Silver Spring have appeal to both Boomers, who are finding their larger single-family homes less necessary, and Millennials (who now represent 32 percent of homebuyers, according to the National Association of Realtors,) for whom either renting in the amenity-festooned newer buildings or purchasing some of our more modestly built detached homes just makes sense.
5) A virtuous circle: A strong local housing market over time has tended to beget a favorable local market over time, so while a lot hangs in the balance, our neighborhoods appear poised, post-election, to benefit in the coming quarter from (we hope) a return to normalcy and even perhaps an early spring market in light of a climatically warmer winter season and the release of some pent-up demand and post-election-induced-nail-biting. What do you think? Let me know below in the comments.
A 2015 and 2016 Washingtonian Top Agent with Finn Family Group of Long & Foster, Dan grew up in the business of real estate in Takoma Park and Silver Spring and specializes in helping buyers and sellers in Silver Spring, Takoma Park and Takoma, D.C. If he’s not out showing and selling homes or hanging with his family, you’re likely to find him training at Crossfit Silver Spring or on the jiu jitsu mats at Capital MMA.