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The President’s Residents?
Sam Hiersteiner | Photo: Courtesy Image | January 8, 2013
No one expects much real estate turnover during Obama’s second term—unless you include the blowing up of the neighborhoods themselves.
When Barack Obama won the presidency in 2008, DC’s real estate market started to pick up real speed, and it was not uncommon to hear people say that he and his army of hip, young staffers catalyzed the growth. The market is even hotter now, so the question remains: Does the president deserve credit for the success of the city’s real estate market?
“I don’t think presidents have much influence,” says Lindsay Dreyer, owner and head broker at City Chic Real Estate. She points to historically low interest rates, a strong local economy with low unemployment and consumer confidence as the factors she believes have driven the boom. “The DC market right now is very healthy,” she says. “We have 3.6 months of available inventory, and anything under six months suggests a seller’s market.”
Washington home prices have been on the rise since well before President Obama took office, too. They first peaked in 2005, before the recession, and hit their highest level ever ($457,500) in July 2012. The tangibles appear to show that the upward trend transcends the man currently in the Oval Office. But what about the intangibles?
“The president has been really connected to DC,” says Nate Guggenheim of Washington Fine Properties LLC, noting that he and the first lady often make high-profile visits to neighborhood and locally owned restaurants. “George W. Bush didn’t try to hide his disdain for the city, but the Obamas seem more invested, and that’s usually a compelling story for clients to hear,” Guggenheim explains.
Dreyer, Guggenheim and Michael Rankin, principal and managing partner of TTR Sotheby’s International Realty, agree that neighborhoods like H Street Northeast, Capitol Hill and Logan Circle are among the hottest in the city, and the Obamas have gone out repeatedly in all three areas. On H Street, President Obama hosted campaign contributors for lunch at Smith Commons in October, and he dined at Boundary Road over the summer. The Obamas have been all over Capitol Hill, from We, The Pizza to Ted’s Bulletin and Kenny’s BBQ Smokehouse. Near Logan, Taylor Gourmet, Ben’s Chili Bowl and Eatonville have all been touched by the White House as well. “The fact that the Obamas don’t just visit exclusive restaurants is evidence of the real connection they have with Washington,” says Guggenheim, who thinks their selection places a certain cachet on these locales.
In fact, the first family’s presence at the city’s establishments often gets those restaurants in the national news, which is as good for the tourist economy in a given neighborhood as it is for its home values. But, could President Obama be bad for the Washington real estate market in certain scenarios, as well? Perhaps.
As Dreyer notes, the end of the mortgage interest deduction, which has been talked about as a way to bring down the national debt, could impact buying decisions in Washington, particularly for people in upper income levels. The District is No. 9 on the list of areas where people take the greatest advantage of that deduction. Virginia is third, and Maryland is in first place.
Overall, though, experts believe the trend of growth will hold. “There used to be the old adage that Republicans live in McLean and Democrats live in the city, but that’s not the case now,” says Rankin. “All different types of people want to live in Washington, and I only see improvement in the market ahead of us.”