Real Estate Investing in the DC Metro Area

Posted in Blog Posts on January 6th, 2012 by capitalhm

The Washington DC Metro area has benefited from a constant inflow of people pursuing careers in government, politics, and the military. It’s also home to a large number of law firms, technology companies and many other industries. Here are the top three reason why real estate investors like the DC Metro market.

1. The housing market has stabilized: Like any other real estate market in the US, the DC area experienced a bubble. No doc, no money down, interest only loans drove up valuations to unsustainable levels. It took a number of years for the market to correct. While it is tough to predict home prices in the future, there is a strong case to be made that the DC Metro area has bottomed out. Home prices have stabilized. In certain markets we are even seeing slight price increases again.








2. Interest rates are at historical lows: We have to go back more than 30 years to find similar rates. Today, investors are able to lock in long term financing. In the past they have chosen short term vehicles to lower the monthly carrying costs. In the current market this is not necessary. In fact, the rates are so attractive that we see an increased utilization of 15 year fixed loans. Those come at a slightly higher monthly cost but do allow investors to pay down the mortgage quicker – a great way to accelerate cash-flow.








3. The transient nature of the DC area: According to Prof. Stephen Fuller of George Mason University, the DC Metro area will add one million net jobs over the next twenty years. In addition it needs 1.8 million replacement workers for retirees and other people vacating jobs. 45 % of those new workers will rent. Already today, many people moving into the area plan to stay only for a few years and choose to rent. Also, tighter mortgage lending requirements are making it tougher to qualify to buy a home, pushing more people into the rental market. So, well-qualified tenants are plentiful, as long as the home is in a location with good access to transportation, jobs and infrastructure.

In summary, this area remains attractive for people to live in and pursue a professional career. Home prices have come down. Many people choose to rent rather than buy because of their personal circumstances. Our mission is to bring together real estate investors interested in long term returns with professionals who need access to housing.

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