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Last Updated on Tuesday, 20 December 2011 21:35
 
INVESTING IN DC Print E-mail

Recently a client was asking me about investing in DC real estate. With rates so low, our job market so strong, professionals continuing to move into the city, and rental inventory sharply down, there has never been a better time to own rental housing in DC. 

In my estimation, the key to being a "onesey-twosey" landlord in this town (like me, a person who rents property on the side; not as his/her main vocation) is to rent properties that attract reliable tenants. This job market seems to yield many applicants that have good credit and are so concerned about preserving it, that this is a relatively problem-free way to go.

The essential condition that must exist in order to sustain that rental market is that the job market has to be solid.  Well, ours is arguably the best.

Here are some articles which speak to our current job market, our incredibly strong job market forecasts through year 2030, and also news on the total lack of rental housing supply right now in DC.  One of the articles actually says that we will have a housing shortage by year 2030 in DC if we do not produce more housing units every year, for the next 20 years, than we have ever produced in any single year in our history.   

Last Updated on Wednesday, 22 December 2010 15:21
 
CAN DC WEATHER THE STORM? Print E-mail

street sceneTODAY, A RELATIVELY INEXPERIENCED REAL ESTATE INVESTOR ASKED ME WHETHER WE SHOULD CONTINUE TO INVEST IN DC REAL ESTATE. HERE'S MY RESPONSE:
 
DC is well positioned to get through this rough patch but of course I do not know how rough this storm will become nor precisely how much foul weather our local economy can withstand.
 

With DC real estate, the issue is that DC is exceptional. 

 

That is, it has one of the very best-insulated regional economies.  That’s a fact.  The question is - Just how well insulated is it?  Can it weather this storm?  And just how bad will things become?  Will we suffer a national economic depression, which is a severe economic downturn that lasts several years?

Note that the bullish Forbes.com article (declaring it the world’s number 1 place to invest in real estate) focuses on the strength of our regional economy, which for me boils down to our job market.  (go to:  http://www.forbes.com/2009/01/21/investment-obama-realestate-forbeslife-cx_mw_0121realestate.html ).  If there is only one thing that indicates the real estate market, then it is the job market.  Assuming no more than, say, three years of negative GDP growth, and provided that negative growth never exceeds, say, -2-3%, I like our odds of weathering the current financial storm.  Indicators seem to show that even if our national economy remains financially wobbly, DC will be at the epicenter of efforts to fix the economy and therefore DC is financially where you want to be. 

The just-released Washington Post article below seems optimistic about how DC will weather the storm…and it echoes some of the same ideas in the Forbes.com article, focusing on anticipated local job creation.

Last Updated on Wednesday, 22 December 2010 15:22
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WE ARE NUMBER 1! Print E-mail

washington monumentAre we REALLY number 1? 

Is now the time to buy real estate? 

Is Washington DC real estate a safer investment?  

Do investors know something that the rest of us don’t?

 
Despite all the bad news we read every day regarding the real estate market, here, in the DC Metro area, there are rays of sunshine that can be seen between the real estate clouds.  In certain local zip codes, we are being pleasantly surprised by news of decreasing inventory of unsold homes, signs of price stability and the sense that our market is much more stable than many others.
 
Although our overall metro area has seen nearly a 20% decline, in the city itself, values are holding more steadily.  In the city, the main ideas seem to be that volume is way down, but value is holding pretty steady in many locations.  Among single family homes, volume dropped precipitously – City wide, in 2008, we saw over a 22% decline in the number of transactions closed.  However, 2008 Q3 data showed that half of the 22 zip codes in the District of Columbia, median sales prices for single family homes were actually up.  Through this period, the average sales price for a home in the city had declined, from $568,200 to $546,200.  (I hope to get info out on Q4 when it becomes available shortly).  Most people agree that, compared to many other U.S. cities, this is not that bad.
 
Are experienced real estate investors able to see something that the rest of us don’t? 

Last Updated on Monday, 16 February 2009 16:57
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HAS OUR REAL ESTATE MARKET REACHED THE BOTTOM? Print E-mail

dollar houseAs a real estate investor and professional, I'm often asked this question.  My clients and friends ask. My colleagues and I ask each other.  And I ask myself, again and again.


I can't know the answer with certainty but am working to identify sources that may provide clarity -- certain fundamentals, economic data and information on our collective optimism/pessimism regarding our local real estate markets.  Based on what I am seeing, learning and experiencing in the DC real estate market, I sense we may be at or near the bottom.

So I have been working on a strategy as an investor to guide me and my clients here in DC. 

In this context, the paragraphs below reflect my current stream of consciousness.  Perhaps I will find the time to organize them a little more coherently.  Perhaps I will not. 

For now, I hope you find this information helpful and that you make good real estate investment decisions.  If want to commiserate or would like help with such decisions, please contact me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 202-253-6177.

First, as in politics, all real estate is local. My local market (the Metro Washington DC Area) is impacted by its local economy and your local real estate market is impacted by its local economy (Think about the difference a healthy local job market makes on local demand for rental, re-sale and new construction). 

This first fundamental actually permeates every other real estate investing fundamental, if you ask me.  As we say, Location, Location, Location - which is about the region, the town or city within that region, the neighborhood within that town or city, the block within that neighborhood and the lot within that block.

Second, a downturn in real estate impacts different markets (and locations) in different ways. 

Last Updated on Monday, 16 February 2009 16:57
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