The Washington DC real estate market is renowned for its real estate success and profitability. This has been true for the DC housing market in 2019 and throughout the 2010s as a whole. In a short amount of time, however, a new decade will be upon us. What is the Washington DC real estate market 2020 forecast expected to be? Should you consider investing in Washington DC rental property this coming year? Read this blog to find out!
Related: 10 Best Places to Invest in Real Estate in 2020
Washington DC Real Estate Market: Mashvisor’s Investment Data
The best way to understand the real estate trends of the Washington DC housing market is to understand the market’s real estate investment data. This begs the question: Where can you find data on the DC housing market? The answer is…right here with Mashvisor! Mashvisor’s investment property calculator analyzes all rental markets across the US. If you’re interested in learning more about Mashvisor’s calculator, CLICK HERE! For now, take a look at the data on the Washington DC real estate market.
Pricing
- Median Property Price: $685,723
- Price per Square Foot: $499
- Price-to-Rent Ratio: 21
Traditional Investing
- Rental Income: $2,705
- Cap Rate / Cash on Cash Return: 1.9%
What About Airbnb in the Washington DC Real Estate Market?
Mashvisor can actually provide investors with data on the Airbnb rental markets in cities across the US as well. So why is there no mention of the data on Airbnb Washington DC above? The reason is that non-owner occupied rentals are forbidden to be used as Airbnb short-term rentals in DC. Investors are not allowed to use second and third homes for Airbnb renting. This is due to Airbnb regulations that have been implemented by the D.C. Council earlier this month. Instead, Airbnb Washington DC hosts are only allowed to rent out portions of a primary residence, such as a room, basement, or carriage house.
Related: Renting Out a Property vs. Renting Out a Room on Airbnb
Aside from the owner-occupancy requirement, there are a number of Washington DC Airbnb laws hosts should know about. For starters, hosts need a business license to operate Airbnb short-term rentals and must follow zoning conditions. There are two taxes, of a total of 14.5%, that hosts must pay as well. For more details on Washington DC Airbnb laws, check out the Airbnb Help Page.
Washington DC Real Estate Market Trends
Now that you know that Airbnb will be illegal for real estate investors in 2020, let’s explore a few more Washington DC real estate market trends. The four most important trends for the market in 2020 are profitability, relatively affordable locations, economic success, and high demand.
Rental Income Profitability
The ultimate goal of investing in real estate is to earn rental income. Fortunately for Washington DC real estate investors, there is plenty of income to go around in the DC housing market. As seen from Mashvisor’s data, the average rental income of Washington DC investment properties is $2,705. What’s most exciting is that this figure is merely an average. Using the right tools (like Mashvisor’s Rental Property Finder), investors can find a Washington DC real estate investment that will generate even more rental income.
Relatively Affordable Neighborhoods
It is clear from Mashvisor’s data that Washington DC house prices are fairly expensive. The median property price in the Washington DC real estate market is $685,723, which is more than double the national median of $325,200. While the DC housing market is pricey, there are a number of relatively affordable neighborhoods in the area. All of the 5 top-performing, up and coming neighborhoods in DC (listed below) have a median property price that is near or less than the US median. Affordable Washington DC houses for sale do exist, it is simply a matter of finding them. Of course, Mashvisor is here to help you find these properties.
Strong Economy
Washington DC real estate also benefits from the city’s top-tier economy. According to Business Insider, the nation’s capital has the best economy in the US. The DC metro area has the second-highest median household income, at over $91,000, in the nation. Washington DC’s economy is very diversified, with professional, business service, federal government, and tourism being among the most prominent sectors. DC’s economy has a positive outlook for the next year, which will undoubtedly benefit the Washington DC housing market forecast 2020 as well.
High Demand
Overall, the Washington DC real estate market will continue to experience high demand in 2020. The market was ranked highly for overall real estate prospects and homebuilding prospects by the PwC’s Emerging Trends in Real Estate report. About 61 percent of DC’s residents reside in rental properties, which further generates more demand from Washington DC real estate investors. As the 22nd most populous city in the US, DC is expecting a positive population growth rate in 2020. This is in part because it is the 5th best city for young professionals and is considered one of the best cities to live in.
On the buyer’s market/seller’s market spectrum, DC is a warm seller’s market, according to Zillow, though it has cooled down in recent months. Multifamily Washington DC investment properties, which comprise over 62 percent of properties, are popular in the rental market.
Best Neighborhoods in Washington DC
Now that we’ve discussed the Washington DC real estate market trends for 2020, we’ll talk about where to invest in the market. According to Mashvisor, the best neighborhoods in Washington DC are Swampoodle, Fort Dupont, Catholic University, Congress Heights, and Skyland.
Swampoodle
Pricing
- Median Property Price: $259,500
- Price-to-Rent Ratio: 6
Traditional Investing
- Rental Income: $3,938
- Cap Rate / Cash on Cash Return: 10.7%
Fort Dupont
Pricing
- Median Property Price: $203,390
- Price-to-Rent Ratio: 11
Traditional Investing
- Rental Income: $1,564
- Cap Rate / Cash on Cash Return: 4.3%
Catholic University
Pricing
- Median Property Price: $324,950
- Price-to-Rent Ratio: 12
Traditional Investing
- Rental Income: $2,260
- Cap Rate / Cash on Cash Return: 3.7%
Congress Heights
Pricing
- Median Property Price: $346,233
- Price-to-Rent Ratio: 13
Traditional Investing
- Rental Income: $2,220
- Cap Rate / Cash on Cash Return: 3.6%
Skyland
Pricing
- Median Property Price: $259,000
- Price-to-Rent Ratio: 14
Traditional Investing
- Rental Income: $1,519
- Cap Rate / Cash on Cash Return: 3.5%
The nation’s capital will be at the forefront of profitable real estate investing in 2020. Despite its high price tags, Washington DC real estate investors can easily find affordable properties with Mashvisor. To get access to our real estate investment tools to start finding cheap properties in the Washington DC real estate market, sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.
Related: The Best Real Estate Investment Calculator of 2020