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$1,360 a Square Foot: What if DC Real Estate Went the Way of NYC?

by UrbanTurf Staff

$1,360 a Square Foot: What if DC Real Estate Went the Way of NYC?: Figure 1
Rendering of a new condo in Soho.

Recently released real estate statistics out of Manhattan for the first quarter of this year are downright astounding.

The average price per square foot of a home in New York’s central borough rose to $1,363 in the beginning of 2014, a 23.6 percent jump from 12 months earlier. There were 3,307 total sales in the first quarter alone, the highest total for a first quarter in seven years. The number of listing discounts dropped to 2.6 percent from 4.3 percent a year earlier.

$1,360 a Square Foot: What if DC Real Estate Went the Way of NYC?: Figure 2
Courtesy of Douglas Elliman and Miller Samuel.

The most eye-popping statistics, however, relate to the current average price for a home in Manhattan and how much that price has increased over the last year. The average home price stood at $1.773 million in early 2014, a 31 percent increase over 12 months earlier. The increase in median sales price during that period is only slightly less notable, rising 19 percent from $820,555 to $972,428.

To put that appreciation in perspective, if DC experienced those stratospheric increases, a $400,000 condo purchased last March would conceivably be worth $524,000 today. Even if you used the median price appreciation, that $400,000 condo would be worth $476,000 twelve months later.

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This article originally published at https://dc.urbanturf.com/articles/blog/1300_a_square_foot_what_if_dc_real_estate_went_the_way_of_nyc/8331

5 Comments

  1. James said at 10:50 am on Wednesday April 9, 2014:
    DC will never be a Manhattan, nothing close to it, because we don't attract that level of wealth. That said, there will be a day that a Logan Circle row house, for example, achieves Georgetown prices, and those price levels will eventually spread to areas such as Capitol Hill. Expect to see tiny row houses on the Senate side of Capitol Hill achieving $1.5M+ sale prices within the next decade. (You can buy them all day long at the moment for $750K, a screaming bargain.) What has kept prices from achieving that in the past is 1) the affordability gap, i.e., people don't earn enough; and 2) "sketchy" aspects to some parts of those neighborhoods (crime, unemployment, noise). Both of those factors are now being addressed. Stand by for appreciation. ;>)
  1. question said at 3:08 pm on Wednesday April 9, 2014:
    @James, question for you: you point out that DC doesn't attract NYC wealth, whether domestic or international (I mostly agree), yet you say that the affordability gap is being addressed. What do you mean it is being addressed? Why do you predict that people in DC will earn more and more? DC has a high median income because of all the govt jobs, but there is a ceiling on govt incomes. There isn't a lot of banking here or other work with unlimited income potential. Plus, DC's recent population growth is almost entirely made up of educated singles in their 20s-30s earning very modest incomes. Hence all the micro-unit plans. So I'm curious - what makes you think people will be able to afford more and more expensive real estate in DC, especially as interest rates rise?
  1. TStreet said at 3:24 pm on Wednesday April 9, 2014:
    James, the average income in DC is much higher than in NYC plus more and more international investors are choosing DC. The only real difference is that NYC has much taller buildings where a condo can command incredible views.
  1. Campy said at 4:55 pm on Wednesday April 9, 2014:
    New York City has 400,000 millionaires, DC has 632,000 residents. Just throwing that out there. There are many 6-figure incomes in DC but few 7 figures. There is a ceiling to the buying power of the GS-14 employee making 120k. Those people cannot afford "NYC" $/sqft.
  1. James said at 9:35 am on Thursday April 10, 2014:
    Not all DC residents are 20 to 30-something singles. Many are married, and many of those married peoples' spouses who create impressive W-2s as well. And, at Campy, two GS-14s can "afford" (or, at least borrow toward), a $1M plus property. Trees don't grow to the sky, but desirable property prices in DC do.

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