Population growth is the #1 driver of housing demand and influences home price increases or decreases.
The factor is also used to justify building new housing based on population growth projections.
The Center for Regional Analysis at George Mason University released a report last fall which shows the DC metro had zero population growth from domestic migration during the 1987-2007 study period.
The study is based on the IRS County-to-County Migration file dataset.
Population outflows canceled out moves-in from other US cities to DC metro.
The 1.6 million population ‘87-’07 increase is solely attributable to international migration to the Washington DC region.
Other findings in the report by Lisa A. Sturtevant Phd and Yu Jin Jung:
- DC is a transient area compared with other major US cities.
- In the 20th century through the 1980s, domestic inflows built population totals in DC.
- Until the mid 2000s, Washington DC housing was a bargain compared with other major US metros.
- DC metro began losing about 5-10,000 people/year starting in 2005 due to domestic outflows. (fig. 1)
- New York City metro is by far the leader in sending households to DC metro, leading the domestic population inflows for 22 years.
- US Census population totals show federal and local policies have slowed international migration to DC starting in 2008.
As demand for housing returns to rentals (DC has always had this characteristic), developers will turn to building more apartment rentals.
Community services based on tax revenues from property owners will bear the added weight of subsidizing transient rental populations.
International populations are much more comfortable with medium density housing (row townhouses and mid rise (4-5 floors) condos) as the US is the only nation where single family detached housing is considered the norm.
As housing prices have returned to early 2000s levels, DC area housing continues the bargain it once was with prices routinely in the $200s K for resales.
Abundance of luxury housing pushes some neighborhoods to the low $300s K–favorably comparable to every major US city, especially with continuing high DC wages.
Slowing international migration points to outer county growth slowdown as Loudoun and Prince William counties have not been successful at creating jobs.
Job growth is the #2 factor in increasing housing demand and prices.
