Housing market strengthens for smart growth: dramatic new data from the DC area
The housing market is trending ever more dramatically toward smart growth. A look at recent home sales data in the Washington, DC metro area shows how.
In particular, the May 2010 issue of Washingtonian magazine focuses heavily on the region's real estate. It contains a list of the 100 “golden zip codes” in the greater DC area that command the highest prices in home sales, indicating which have gone up or down recently in median sales price and by how much. (Unfortunately, the database appears only in the magazine's print edition.) I separated out a subset comprising two groups: those where median prices declined 25 percent or more during the last three years, and those where prices have gone up by any amount in the same three years.
I then indicated these areas on a Google Earth image of the region, marking the zip codes with 25% or more declines with red arrows, those showing increases with green house symbols. For orientatation, the area shaded in blue in the center of the map is the central city of Washington, DC. The area in dark blue along the right (eastern) edge of the map is the Chesapeake Bay. The blue river running south from DC is the Potomac. You can see the outline of the city of Baltimore in the northeast corner of the map.
The results display dramatically, as you can see. Basically, the only parts of the database that gained in value were in the central city of Washington and the close-in suburbs of Arlington, Alexandria, Bethesda, and Silver Spring, all nonsprawling and served by Metro rail transit. The one semi-outlier to the west of the city that showed a gain is Tysons Corner, Virginia, whose market has likely been influenced by a highly publicized urban makeover oriented around stations on a new Metro line, now under construction. It gained in value by 0.1 percent. The far western reaches of the region, which have experienced the most new sprawl development in the last decade, have suffered the most declines.
That close-in locations are favored by the market is not news, of course. On a per-square-foot basis, central locations are traditionally more prized by homebuyers. What is news is the movement in the market that is making the relative desirability of central locations, and the relative decline of the value of sprawl, much more pronounced.
We’ve seen similar evidence of market changes all across the country, but in this area it really could not be more clear that the market is moving strongly toward the same locations that the environment favors. Those who continue to believe in sprawl locations are destined to keep losing money.
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