Immediately after the presidential election, Andrew Stauch, who works in product innovation for the area multiple listing service MRIS, noted that if there was an effect that would be felt by a Donald Trump victory on the DC area housing market, it would be at the high end.
As the new president is sworn in today, the “Trump Effect” is already coming into sharper focus.
“While it has been traditionally true that incoming administrations have little or no effect on the DC area luxury market, that is not the case with the new administration,” Tom Anderson, president of Washington Fine Properties, tells UrbanTurf. “Since the election, contract activity is almost double this year versus the same time last year in the $2M and $3M+ price ranges.”
Mark Lowham, CEO and managing partner of TTR Sotheby’s International Realty, echoed these thoughts.
“We have witnessed a noticeable uptick in sales following the election,” Lowham said, noting that 68 homes in the region listed for $2 million and higher have sold or been placed under contract since November 1. “In addition, several private sales are underway for homes valued in the top end of the upper brackets.”
The most notable transactions associated with the Trump administration include Commerce secretary nominee Wilbur Ross purchasing a $12 million, seven-bedroom house last month in Massachusetts Avenue Heights, and First Daughter Ivanka Trump renting a $5.5 million, six-bedroom home in Kalorama. And movement on the market hasn’t stopped there.
The living room in Ivanka Trump’s new Kalorama home.
Patrick Chauvin of Compass shared with UrbanTurf that at least four Cabinet nominees have made real estate purchases thus far. Two of those sales occurred off-market; three of the sales are still waiting to close.
“A lot of people who are in big positions are also looking to rent, and the rental market’s very limited,” Chauvin says. “I’ve had more people in the new administration call looking to rent, but there’s nothing left.”
While most of the interest has been geared toward the city, particularly neighborhoods like Kalorama, West End, Massachusetts Avenue Heights and Georgetown, the suburbs have begun to see increased interest in the higher price ranges as well. “Showings in Alexandria, McLean and Bethesda in the upper brackets have picked up considerably in the past two weeks,” notes Lowham. “Washington area prices are being well received, particularly for individuals moving from New York City.”
One cannot discount the fact that this administration’s nominees would create the wealthiest cabinet in presidential history — fifty times greater than that of most-recent Republican president George W. Bush. “We have witnessed a handful of sales in excess of $10 million which is remarkable for such a short period of time,” says Lowham. “This is notably higher than we witnessed during the Bush, Clinton or Obama transitions.”
Steve Rattner’s Kalorama home.
The activity on the upper end of the market is not limited to Trump buyers, as DC residents associated with the Obama administration are now looking to sell. Steve Rattner, dubbed the Car Czar in 2009 after being tapped by President Obama to lead the effort to revitalize and restructure the automobile industry, recently listed his five-bedroom Kalorama home for $7.9 million. And Daniel Zelikow, who served as de facto landlord for Obama Treasury secretary Tim Geithner, listed his Kalorama home for $6.1 million last week.
While there haven’t yet been any examples of houses exchanging hands directly from Obama associates to Trump associates, the DC area offers enough high-priced luxury housing stock that this may not be necessary. Especially as homeowners who have nothing to do with the administrative shift are taking advantage of the newfound demand.
“We are encouraging our clients who contemplated listing in the spring to move forward now,” Mark Lowham said. “The short-term impact of the incoming administration is just the beginning of what we believe are strong market fundamentals for the the year ahead.”