Home Prices: DC & the Region

By Art Rodgers

The recent release of the Case-Shiller Home Price Indices shows that housing prices in the Washington DC Metropolitan Statistical Area (MSA) increased by 9.2 percent over the past year. DC residents might be interested to know there is a similar index published by both Freddie Mac and the Federal Housing Finance Agency (FHFA) where you can compare the change in DC prices to the rest of the MSA. The chart below shows the change in the Freddie Mac Home Price Index (FMHPI) for both DC and the rest of the MSA since December 2000.

Source: Freddie Mac, Home Price Index 2014.

Source: Freddie Mac, Home Price Index 2014.

The chart shows a comparable rise in prices through mid-2006 after which prices across the region start to decline whereas the District’s prices simply stabilize, and then show a modest decline after 2007.

Fast forward to the past year where the MSA’s prices increased 7.9 percent (similar to the Case-Shiller 9.2 percent increase), but the District’s index increased 13.5 percent. Even more astounding, while the prices in the MSA over the past several months seem to have stabilized, increases in the District’s prices appear to be accelerating. The monthly year over year change at the end of 2013 for the District was 13.5 percent, significantly higher than the 9.6 percent change at the end of 2012.

There are some basic constraints to the FMHPI to be aware of:

  • It only includes single family homes of 1-4 units, but no condos.  The long run supply of single-family homes in DC is constrained compared to the rest of the region.
  • Unlike the Case-Shiller, which uses all sales, the FMHPI only uses Freddie Mac and Fannie Mae loan data, which have a lending limit of $625,000 on one unit properties.  So more expensive homes which may not be appreciating as fast are less likely to be included in the data.  This means that prices for all homes might be rising more slowly than the index would indicate; but
  • Like the Case-Shiller, the FMHPI is built using paired resales of the same properties over time.  It is therefore possible that a home bought 10 years ago and resold recently has appreciated so much as to make the buyer less likely or unable to use Freddie Mac or Fannie Mae loan products and therefore the resale may not be included.  This would mean home prices might be rising even faster.

Is it a bike? Is it a car? Neither? Both?

By Stephen Gyor

I was standing outside of my office the other day, and I spotted an odd, egg-shaped vehicle — it looked part bicycle, part Car2Go, and included solar panels on the roof. Quite strange!

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I did a bit of research and apparently this egg-shaped tricycle, called the ELF by its manufacturer, Organic Transit, can be powered by an electric engine when needed or by using pedals just like a bicycle. According to Organic Transit, “The spacious interior keeps you out of the elements and in view of other drivers. [You can] get power through the solar panels or simply charge the batteries by plugging into a socket. ” The ELF’s exterior also includes lights, signals, and a mirror.

According to Organic Transit, the top allowable speed using the electric motor only is 20 mph on a flat surface. ELF owners can travel faster by pedaling — some can get up to 30 mph — but the ELF is designed for use under 30 mph. The ELF is relatively lightweight (100 lbs.) and is made mostly of recycled plastic and aluminum.

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A vehicle like the ELF prompts a ton of questions. Could the ELF use bike lanes or car lanes or both? Should it be parked in bike spaces or car spaces? The ELF looks rather large to park in a bike space (not much smaller than the Car2Go parked nearby), and yet the one I saw was parked on the sidewalk.

So what do you think about the ELF? Is this type of hybrid human/solar powered vehicle the wave of the future?