The average price per square foot of floor space in new single-family housing in the United States decreased after the great financial crisis, followed by several years of stagnation. Since 2012, the price has continuously risen, hitting 168 U.S. dollars per square foot in 2022. In 2024, the average sales price of a new home exceeded 500,000 U.S. dollars. Development of house sales in the U.S. One of the reasons for rising property prices is the gradual growth of house sales between 2011 and 2020. This period was marked by the gradual recovery following the subprime mortgage crisis and a growing housing sentiment. Another significant factor for the housing demand was the growing number of new household formations each year. Despite this trend, housing transactions plummeted in 2021, amid soaring prices and borrowing costs. In 2021, the average construction cost for single-family housing rose by nearly 12 percent year-on-year, and in 2022, the increase was even higher, at close to 17 percent. Financing a house purchase Mortgage interest rates in the U.S. rose dramatically in 2022 and remained elevated until 2024. In 2020, a homebuyer could lock in a 30-year fixed interest rate of under three percent, whereas in 2024, the average rate for the same mortgage type was more than twice higher. That has led to a decline in homebuyer sentiment, and an increasing share of the population pessimistic about buying a home in the current market.

Washington DC was the most expensive major city for office space, among those being considered for Amazon’s second headquarters, in the United States in 2017. Tenants paid, on average, 595 U.S. dollars per square foot for office space in that city, compared with 550 U.S. dollars and 486 U.S. dollars per square foot in Boston and Austin respectively.   Why is Washington DC so expensive? The GDP of the Washington metro area has steadily risen since 2001, which indicates that the economy is growing. This is not surprising, because it is the capital of the United States and, consequently, its political epicenter. All three branches of government, nearly 200 foreign embassies and several international organizations - such as the IMF, the World Bank and the National Geographic Society - are located there, which also means that it’s the logical place for lobbying firms and many financial services companies to operate from.

Further growth expected in Washington DC The future of the office real estate market in Washington DC looks promising, due to its political importance and strong economy. Office rents are forecast to grow by almost six percent by 2021, which is impressive given how high they already are. However, vacancy rates are also set to rise in the area, which means that more available office units will be unoccupied.