More Real Estate Market Data

December 14, 2005

I found this article published by David Howell, managing broker of the McLean office of McEnearney Associates, Inc. The snippet below is commentary about a presentation by Dr. Stephen Fuller, a noted professor of public policy and head of the George Mason University Center for Regional analysis, to the Northern Virginia Association of Realtors® Economic Summit in September.

We have often quoted Dr. Stephen Fuller of George Mason University, a true visionary about the DC economy. At the recent Northern Virginia Association of REALTORS® Economic Summit, Dr. Fuller focused on this area's incredible job growth as one of the major reasons to remain optimistic about the long-term health of our real estate market. As an example, the DC metropolitan area has created 287,000 net new jobs in the last five years - half of which were created in Northern Virginia. In just the last year, 84,500 new jobs have been created. And here's the real impact of those new jobs on housing: the jobs created 53,000 new households, but builders are only capable of building about 28,000 new housing units - homes, townhomes, condos and rental apartments - per year. Because of the shortage of affordable housing close-in, many of those new households have headed up and out - to the ex-urbs. Dr. Fuller projects a continued and growing shortage of housing units, and that long-term shortage will continue to mean good news for sellers. As long as we continue to see strong job growth, fueled first and foremost by the engine of federal spending (Northern Virginia gets half of every federal dollar spent in the region), we will continue to have a healthy real estate market.

Over the last 27 years, the average annual price appreciation in this region has been 6.9%. Both we and Dr. Fuller expect to see appreciation rates closer to that long-term average - perhaps 7% - 12% per year for the next decade.

Read the full article here. Also, download the Fuller presentation here (PDF file 840KB, for those that like the numbers before bedtime).

Dr. Fuller presents the numbers that back up the statements I made recently about the future of the Northern Virginia market driven by job growth and housing shortages.

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