Washington DC market cooling for larger homes

Our recent addition of Zestimates in the District of Columbia has allowed us to add the Washington DC metro area (Washington-Baltimore DC-MD-VA-WV) to our latest set of quarterly reports. With over 2.6 million homes and Zestimates, Washington, DC is the fourth largest metropolitan area in the nation. Let’s dive down into the quarterly report and see how the markets have fared recently and over the past five and ten years.

A graphical view of Washington DC Metro area
Market Performance	Regional Popularity	Expensive Neighborhoods

During the housing boom, the Washington, DC Metro area was one of the highest-appreciating large markets in the nation. With an annualized appreciation of 16% over the past five years, the housing market has provided a return similar to the Fidelity Low-Priced Stock mutual fund. Condos in the area have appreciated at an even greater rate than homes at 18% annualized over the past 5 years. But just like the stock market, past performance does not indicate current and future performance. During the past year, the market has cooled. While single family residences have dropped 4.1%, condos have taken a larger year-over-year hit with a drop of 5.6%.

Looking at the breakdown by home size and home type, we see some interesting trends. Larger houses and condos have cooled down much faster than their smaller counterparts. For single family residences, small homes are actually up slightly (0.7%), while large homes are down 6.6% year over year.

Performance of more localized areas was mixed. For the most part, the less expensive places fared better than the more expensive places. Specifically, cities in Maryland were up year-over-year: Baltimore (6.6%), Capitol Heights (3.0%), Lusby (3.0%) and Waldorf (1.0%). Some of the cities that have seen year-over-year declines include Virginia cities of Burke (-7.3%), Alexandria (-8.2%) and Fairfax (-7.1%).

At Zillow, we measure the popularity of a regional market in page views. We call this measure the Zillow Interest Index or ZII. Our particular method of calculation is number of visits during the quarter divided by number of homes for a particular region. It’s most interesting to look at the changes in popularity to see what places are hot or cold. ZIP Codes showing increased popularity include Broomes Island (20615), Washington (20004, 20005, 20036) and Belcamp (21017). Considering we’ve just added Zestimates in Washington, DC, it’s not too surprising to see the increase in popularity. On the down side, Upperville is not quite living up to its name as it dropped almost 200 spots. Bryantown (20617) and Hume (22639) also showed big quarter over quarter drops in popularity.