The district of Columbia is the nations capital, and as such it enjoys a strange status as a state. The state is home to the White House, the Washington monument, the Lincoln memorial and many other important and historic sites. As a small state, the state has an equally small housing market.
As is so often the case with small housing markets, there are many variables in the Washington DC market that are liable to fluctuate wildly. These variables are often far more stable in larger markets, which have the size and security to weather many of the storms that ruffle the feathers of smaller markets like Washington DC.
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The US census in 2002 showed that there was a total of 272,636 housing units in Washington DC. With just more than a quarter million housing units, the home ownership rate in the state was also surprisingly small. While the 2000 census showed a national average for home ownership rates to be 66.2%, the home ownership rate in Washington DC was only 40.8%. The median value of housing units in Washington DC may do something to explain the amazingly low home ownership rate, but it is almost certainly not the only explanation.
The 2000 census showed that the median value of an owner occupied housing unit in Washington DC was $157,200 as compared to the national average of $119,600. There are several other states in the union with median values well over that size which also have a much higher home ownership rate. It is more likely that the nature of the job market in Washington DC accounts for the high rate of renting in the state.
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The home ownership rate may be poised to climb, as the recent boom in housing nationwide saw a higher level of construction in Washington DC in the first quarter of this year than there has been in past years. This new market boom is also now cooling significantly, so market conditions will soon be prime for home buyers to make their move and purchase a house. Odds are however that Washington DC will remain a renter heavy market, despite the recent booms in both real estate and construction.
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