While President-elect Donald Trump and his team come to grips with the mammoth task of filling 4,000-plus jobs as he prepares to take over the White House in January, they are not the only ones who have been busy.
Washington, D.C.’s real estate brokers’ phones have been ringing as the first crop of Mr. Trump’s hires, which tend to be the top dogs in the administration, search for new digs— namely luxury rentals—in the national’s capital.
“Cabinet-level people are not paupers. We would not expect them to want entry-level homes,” David Howell, the executive vice president and chief information officer at McEnearney Associates, a brokerage that deals in the area, told Mansion Global.
Indeed, Sotheby’s International Realty, has already had a number of people call to set up viewings for a $6,950 per month duplex penthouse in a converted red brick building in Georgetown’s East Village. Another nearby $6,000-a-month penthouse, meanwhile, was leased the day after the election by an unidentified member of Mr. Trump’s future administration.
In particular, Tad Stewart of Sotheby’s said he’s received several inquiries from new hires who are opting to rent for the first six to 12 months so they can get a feel for the neighborhoods, especially wealthier clients.
At two of the city’s new amenity-filled large luxury rental buildings—The Hepburn in Kalorama (prices range from $2,610 for a studio to $14,500 per month for a three-bedroom apartment) and The Woodley in Woodley Park (prices range from $3,021 to $12,000 per month)—it’s the same story.
Salley Widmayer, who represents both, said: “Since the election, interest, showings and leasings continue to be strong at both properties.”
The bottom end of the city’s rental market is also expected to be impacted, as a flood of young staffers with small budgets hit the city.
Steve Centrella, a broker for Redfin in D.C., said: “That is something we’re going to see a bigger change in because a vast majority of these positions tend to be lower-level staffers and single individuals who are tied more into the rental market and may only be here for a few years, so don’t want to tie in a purchase.”
However, while the there has been a lot of inquiries in the city’s luxury rental market and some in the sales, the majority of brokers who spoke to Mansion Global are not expecting a sea change in the sales market.
“It’s not that it won’t affect it. It just won’t have that much of an impact. We’re expecting an uptick in sales, but not a huge number,” Mr. Howell said. “Part of the reason for that is it will be spread out over time as all these appointments won’t happen overnight. The Cabinet will happen fast, but everything else will take between 12 and 18 months.”
“There’s also a reasonable assumption that many of the people probably already live here,” Mr. Howell said. “We’re not anticipating an onslaught with thousands of people coming to town.”
Even if hypothetically all of Mr. Trump’s cabinet members, a large majority of whom will likely have healthy bank accounts, bought a $1 million-plus home, it wouldn’t make a huge difference to overall activity in that price bracket as there have been already been thousands of sales worth at least $1 million in the D.C. metro area in the year to date, according to Mr. Howell.
“Any purchase is nice but it’s unlikely to result in a huge shot in the arm,” he said.
Mr. Stewart agreed, telling Mansion Global that while people tend to think there will be a huge turnover, “it’s more of a trickle.” “It’s not as big as many people think because some people will stay, while a lot of the new administration will filter in over several months,” he said.
Their comments chime with National Association of Realtors analysis of the D.C. metro housing market, which also includes parts of Virginia and Maryland, during six elections between 1998 and 2015, which showed that the impact on the housing market was minimal.
During an election year, home sales rose by an average of 12%, while sales were up 10% in both the previous and succeeding years. Median home prices, meanwhile, grew 3% in the previous year of the elections, 7% in the election years and went back to 5% growth one year after the elections.
CLICK HERE TO READ MORE OF OUR ELECTION COVERAGE:
Follow Mansion Global:Facebook | Twitter | Instagram | LinkedIn | Messenger
Write to us: firstname.lastname@example.org