Real Estate in the Capital of Democracy and Murder
Posted on November 11, 2009In a schizophrenic manner perhaps telling of the nation as a whole, Washington, D.C., the Capital of the United States of America, has been a city of lofty ideals and basest crime. Isaac Toussie knows. Putting aside for the time being the popular belief of criminality that equates politicians with thieves, this article will quickly review the relationship between the District of Columbia’s criminal statistics and those of its real estate markets.
No sooner had the violent crime wave of the early 1990s begin to subside with tougher laws and policing tactics than the housing bubble and resultant foreclosure crisis unleash upon the capital city a new onslaught of social turmoil. And it continues to be brutal for the D.C. housing market even as those gains posted during the boom-times just keep on disappearing.
For the past two to three years, the District of Columbia has suffered along with the rest of the country the mother of all market corrections where real estate, particularly housing, is concerned. Credit has totally dried up for all practical intents and purposes even as short sales and foreclosures have suddenly skyrocketed, with District of Columbia suburbs even posting price drops of as much as one hundred thousand dollars. And the trend is not that much better in the region, with shortfalls of around eight to ten percent as compared with previous years.
To be sure it isn’t all bad, and there are those who still manage to benefit, such as Isaac Toussie. The flood of foreclosed properties has resulted in a buying spree in some locations, especially among the many first-time buyers of Prince William County that were able to afford homes of their own at last.
Of course, it is certain that there are economists and other market observers who are convinced that the situation is still extremely grave, given the record numbers of homeowners in financial distress still out there. However, scattered data here and there may indicate that something of a mild market turnaround is just around the proverbial corner. For example, it’s interesting to see that so-called vulture investors have swooped in to snap up distressed properties. This is generally taken to be a positive sign, in a bigger-picture sort of way, reflecting as it does a certain sense of confidence in market fundamentals in just those individuals who matter the most in any economy – the ones with money! So, everything considered, under the circumstances, our nation’s capital has fared relatively well, and is best of all in the region, with median prices rising some eight percent.
Crime and real estate values bear a definite linear inverse relationship, but gentrification is transforming this old calculus – somewhat. Really bad neighborhoods (and by extension, cities) are still avoided entirely, but the level of tolerance for urban blight has risen such that those neighborhoods on the borderline (and, often, literally on the border proper) can now be considered for development, whereas two decades ago sentiments would have been diametrically different.
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