Recent projections suggest an imminent and significant wave of growth for the DC metro area. An influx of 1.5 million people and the creation of 1.1 million jobs within the next three decades are expected. This heralds a wealth of promising opportunities for local and regional property investors, as it is likely to spur a dynamic real estate market.
Arlington County is expected to be one of the main beneficiaries of this anticipated growth. The Metropolitan Washington Council of Governments' data anticipates a remarkable inflow of 69,000 new residents by 2045. This translates into a population increase of nearly a third, elevating the total county population close to the 300,000 mark.
Furthermore, the county is projected to experience an even more substantial increase in the number of households, nearing 40% by 2045. This suggests the addition of over 38,000 new households to the existing 103,600 recorded in 2015. With this surge in population and households, the demand for living accommodations will inevitably rise. According to recent trends, it is reasonable to predict that a significant portion of these new arrivals will choose to rent, rather than buy their homes.
Even though the recent uptick in apartment construction has momentarily led to a leveling off of regional rents, the predicted demographic swell ensures that demand for both new and existing rental units will continue to rise in the years to come.
Analysts at Delta Associates, a firm specializing in regional housing trends, indicate that the average annual rent increase could surpass 4 percent in 2018. Additionally, they predict a stabilized vacancy rate of 3.4 percent in Northern Virginia by September 2018. This represents a significant decrease from the 4.1 percent vacancy rate observed in the third quarter of 2015.
In an interesting development, the COG’s report suggests a shift in the job market of the region. While the number of federal government jobs may decrease, substantial growth is expected in the comparatively high-paying professional and business services sector. The information sector is also tipped to experience notable growth.
Arlington County is poised to garner a significant share of this job growth, with nearly 70,000 new jobs predicted to be added. This equates to a 33 percent increase, infusing fresh vitality into the local economy.
The confluence of the expected population boom, job growth, and the ongoing residential development makes for an interesting scenario for both existing landlords and prospective investors. As the supply-demand dynamics of the market shift over the coming years, astute investors will need to adjust their strategies. This could involve reconsidering investment plans, contemplating renovations or upgrades to keep their properties competitive, and calibrating rental rates to match market conditions, thereby maximizing returns on their investments.
In conclusion, Arlington County appears to be on the cusp of a significant transformation, driven by forecasted population growth and new job opportunities. Investors who stay alert to these trends stand to make the most of this exciting and potentially lucrative chapter in the county's development.
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