When Mr. FAF and I were looking to buy a house, we did a lot of research on the Washington DC metro area. We were young and wanted to locate to a big city where the job opportunities are.
DC is THE place to go for many young professionals starting out and climbing up their career ladder.
We had four criteria in mind:
1) Within our price range (below $400k)
2) Have at least 2 bedrooms with a relatively low HOA fee (below $400)
3) Within a 15-20 minute walk from the metro
4) In a relatively safe neighborhood
If you’re familiar with the DC real estate market, you know it’s not easy to find a place that meets criteria 2-4 given our budget.
We navigated the market along the DC Metro lines and found some shocking socioeconomic facts about the real estate in the DC metro area (Washington DC, Maryland, and Virginia – DMV).
1) The housing prices in the DC metro area are among the highest in the nation.
Washington DC ranks 26th among the most expensive cities in the world, according to the Economist Intelligence Unit’s (EIU) recent “Worldwide Cost of Living” report.
In 2016, the median housing price in the area is $384,300 – almost double the national median home value of $232,200.
Below is the median sales prices by jurisdiction in 2016:
Source: The Washington Post
Housing prices in Falls Church City and Arlington (Virginia) top the list, followed by those in the District of Colombia. These are the cities with high-income household and are close to downtown Washington DC.
Sales prices are lower in Anne Arundel and Frederick counties (Maryland) but are still higher than the national median housing price of $232,200.
2) Houses are more expensive along the northeast and southeast.
Basically, if you draw a vertically line to divide the map into two, the left half(Left) is more pricey than the right half (Right).
The reason is that households in these areas have higher incomes. According to a 2013 Metro map that shows income inequality in DC:
Red line: — Left: $72,889 – $147,630
— Right: $49,854 – $97,211
Blue line: — Left: $72,876 – $115,138
— Right: $35,459 – $104,035
Yellow line: — Left: $94,251 – $115,138
— Right: $52,176 – $85,059
Orange line: — Left: $71,061 – $133,003
— Right: $35,459 – $104,035
Green light: — Left: $31,735 – $80,949
Whenever we found a house that met our criteria, Mr. FAF and I would look them up on SpotCrime to check the safety of the neighborhood.
One time, out of curiosity and desperation, I looked up houses along the blue line on the southeast and saw multiple shootings in that area.
Mr. FAF and I decided to focus only on the left half of the map and found some great deals.
3) The closer a property is to downtown DC, the more expensive it tends to get.
Although we fancied the idea of living in DC proper, we had to expand our search to outside of the city to find better deals.
If you work in DC and live further out, you can have a long and expensive commute.
If you drive, you can get stuck in traffic driving into the city and have to pay $100-$300/month for parking. Public transit in DC is also expensive and can easily cost you $200 a month.
Many of us fancy living in the capital city of the most powerful country in the world.
4) The closer a house is to the Metro line or bus lines, the price tends go to up.
DC has the nation’s best public transit system, and many DC residents ride it every day. People tend to prefer living near the metro stations to avoid driving altogether.
You can look up houses and condos for sale or for rent within 1 mile from a particular metro station on LiveNearMetro.
5) Condo near downtown DC could be much cheaper than townhouses and single-family houses, but they come with extremely high condo fees.
Many condos can be as cheap as $150,000 to $200,000. But don’t be fooled by the prices. Such low prices are compensated by sometimes ridiculously high homeowners’ association (HOA) fees.
It’s not rare to see HOA fees in the $1,200 – $1,800 range or even higher. For many, that could very well be their monthly mortgage. Imagine you still have to pay that fee on top of your mortgage payment and forever after.
6) The geographic distribution of race and ethnicity
— The Chinese community is large in Shady Grove (near the end of the red line – northeast).
— There’s a high number of Vietnamese and Korean Americans in Falls Church (orange line).
— There’s a large Hispanic population in Twinbrook (3rd last stop on the red line – northeast) and Glenmont (last stop on the red line – northwest).
— White Americas are concentrated in the northwest and southwest of the metro map while African Americans are concentrated in the northeast and south east.
As you can see in the income figures (Fact #1), there’s a correlation between race and income or race and housing prices.
I know buying a house can be an exciting yet overwhelming adventure. But don’t forget to do your own research on the housing market you’re interested in.
The realtor may help you navigate through the system, but no one else will be as vested in your house purchase as you are.