There were some contradictory messages in local real estate news this past week. Citing a study by Private Mortgage Insurance (PMI), The Washington Examiner noted that the Washington area has a 77% chance of price declines in the next year. This may surprise anyone who has competed in multiple offers in some of the city’s hot neighborhoods and the report itself noted that the risk is declining as the market stabilizes. Their study covers the metropolitan region, where foreclosures in some counties are bringing down the averages, while other areas like the walkable neighborhoods show stability and strength–yet again, another sign that all real estate is local. You can read the article here.
From a different perspective, economic guru Stephen Fuller wrote in a commentary that Washington’s housing problem is that there isn’t enough to keep up with the projected demand. Conservative projections place job growth at 1.2 million over the next 20 years.
“To accommodate this growing workforce, the region will have to significantly expand its housing supply. That means building on average 35,000 new housing units annually for 20 years to meet the nearly 700,000 requirement by 2030. That’s more new housing than has ever been produced in the metropolitan area in any one year.”
Fuller suggests that the shortage will lead to price appreciation that will put housing out of reach for many and may deter business from the area. Fuller’s full commentary can be read here in the Washington Post.
