The Washington, D.C, housing market is saturated with ‘luxury’ homes, and realtors may need to redefine the phrase to catch up with current trends.
So far this year, in the nation’s capital, home sales of more than $1 million have made up around 18 percent of all home sales, a stark increase over years past, according to data from the D.C. Office of Revenue Analysis (ORA).
“It may be time to set the bar higher in terms of what constitutes luxury,” Steven Giachetti, a financial analyst at ORA, wrote on the agency’s blog. “This redefinition would also better align the DC market with other expensive housing markets in the nation where $1 million no longer carries the same cachet and exclusivity that it did ten years ago.”
In 2001, just three percent of homes in D.C. sold for seven figures. In 2005, the number was just under 10 percent, and in 2013, it shot up to more than 16 percent.
The new threshold of ‘luxury’ should be set at $1.5 or $2 million, according to Giachetti. Those homes made up just seven percent of all homes sold in 2015.
The data also shows that raising the limit to $2 million makes it easier to find more exclusive neighborhoods. While $1 million homes can be found throughout the city, almost 75 percent of the homes valued at $2 million or more are located in just six neighborhoods.
Georgetown, long-known as one of D.C.’s priciest and poshest areas, is home to 30 percent of the city’s $2 million homes.
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