DC: Everyone Needs To Calm Down
Any market with a huge bump in multifamily supply would be in a tizzy, worried about short-term consequences, but experts at Bisnow's Mid-Year Multifamily Summit this week said DC's long-term forecast remains sunny. Freddie Mac's Rich Martinez (left, with Greystar's Doug Root and Chase Commercial Lending's Dudley Benoit) says encouraging job growth numbers in the DC region mean the large wave of supply coming online will likely be absorbed, even if takes a little longer than developers might hope. Young people moving to DC are much more inclined to rent, Rich says, since they don't want to be tied down to an area for too long (your boss could get impeached, recalled, or fired at any moment), and they've seen the harsh effect the recession had on home ownership.
Those job numbers, specifically: Over 850,000 are expected to flood the DC region over the next 20 years, says Cassidy Turley's Chris Doerr—here with MAC Realty Advisors' Bruce Levin. (Unfortunately, most of those will be a not-so-subtle attempt to stack the Supreme Court.) Here's a fact to blow your mind and allay oversupply fears. Since job numbers that big would require 575,000 new multifamily units over that 20 years, the region may actually be underbuilt (plot twist!), Chris says, since the DC area isn't building at that fast of a clip yet. Once the current build-up of supply delivers, Bruce says to expect equity to come back strong investing in DC deals.