WEBVTT - McEnearney's Howell on Urban Housing Shift Back to D.C. (Audio)

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<v Speaker 1>Business flash. You're listening to Taking Stock with Kathleen Hayes

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<v Speaker 1>and on Bloomberg Radio, Broadcasting live today at the Kimpton

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<v Speaker 1>Morrison House Hotel in Alexandria, Virginia, the Washington metro area

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<v Speaker 1>home of Bloomberg ninety one and one oh five point

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<v Speaker 1>seven fm h D two one of the big reports

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<v Speaker 1>the markets have had their eye on today and certainly

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<v Speaker 1>the three feed officials who are suggesting maybe rate hacks

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<v Speaker 1>are possible in June housing starts new home construction having

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<v Speaker 1>a nice game last month of six point six percent

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<v Speaker 1>nationally to nearly one point two million at an annual rate.

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<v Speaker 1>What is going on in the Washington D C. Area?

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<v Speaker 1>How about people who left to go to the suburbs

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<v Speaker 1>trying to rush their way back into the district. Joining

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<v Speaker 1>us now is David Howell. He's c i O, it's

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<v Speaker 1>Chief information officer at McNerney Associates, a leading Washington d C.

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<v Speaker 1>Metro real estate company. Thanks for joining us today, David.

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<v Speaker 1>Thanks appreciate the operating to be here. So what is

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<v Speaker 1>the big trend now? I when I first came to

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<v Speaker 1>the East coast about thirty years why can't believe it?

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<v Speaker 1>So long I started coming to Washington for work. I

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<v Speaker 1>was coming financial news in the fit. I remember what

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<v Speaker 1>the old district was like. It is so different now,

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<v Speaker 1>it really is, and and the trend has been with

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<v Speaker 1>real development and real boom in d C, and people

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<v Speaker 1>have been migrating more towards the district. There's been a

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<v Speaker 1>real huge development boom in d C, with huge development

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<v Speaker 1>towards apartments and condos um and particularly with orientation towards

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<v Speaker 1>apartments and condos without parking, without with any orientation towards

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<v Speaker 1>towards cars, which is a completely new development. David speak

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<v Speaker 1>about nightmare community, I'm wondering, what's the commune? Can it

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<v Speaker 1>be like tonight? How come long can people expect to

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<v Speaker 1>to stay in in traffic if let's say the whole

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<v Speaker 1>the city's in full swing. Well, and I think that's

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<v Speaker 1>part of what's driven the move towards the district people

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<v Speaker 1>that have been migrating from the outer suburbs. An hour

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<v Speaker 1>long community is not at all unusual, and particularly if

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<v Speaker 1>they're driving. And we've had some recent problems with Metro

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<v Speaker 1>in particular. Um and although they will get those problems fixed, UM,

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<v Speaker 1>it's washingt d C typically has the second longest commutes

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<v Speaker 1>in the country. UM And so forty five minute, hour long,

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<v Speaker 1>hour and a half commutes are not unusual. Well, you know,

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<v Speaker 1>we look earlier today to Mark Jinks. He's the city

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<v Speaker 1>manager for Harry and Alexandria, and he talked about I

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<v Speaker 1>asked him what was the biggest thing in his forty

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<v Speaker 1>years in managing, you know, urban development he's a city

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<v Speaker 1>manager here. Of course, the rail link for the Washington

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<v Speaker 1>C area. He said, it's made a big difference. Does

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<v Speaker 1>Washington d C need more of what you just described

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<v Speaker 1>dwellings that don't rely on cars and public transportation that

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<v Speaker 1>mose people around it does? And I think, UM, those

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<v Speaker 1>areas in the closer in suburbs and d C that

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<v Speaker 1>have planned well for transit have the one are the

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<v Speaker 1>ones that have really prospered. Alexandria City, Arlington have done

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<v Speaker 1>that extremely well. Some of the outer suburbs of Fairfax

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<v Speaker 1>County they're learning they have not that done that quite

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<v Speaker 1>as well. They have not done as dense planning around

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<v Speaker 1>the metro stops as Arlington and Alexandria have. The Maryland

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<v Speaker 1>suburbs have done that probably better than some of the

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<v Speaker 1>Virginia suburbs have. They're learning. UM. The silver line out

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<v Speaker 1>through some of the areas in Fairfax County they've learned

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<v Speaker 1>and they're doing that better UM and they're profiting from it.

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<v Speaker 1>UM and So those closer in suburbs that did that

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<v Speaker 1>well in the beginning, they've done very well. UM. The

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<v Speaker 1>ones that are doing it now, they're going to prosper

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<v Speaker 1>in the long term. And the revitalization that you see,

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<v Speaker 1>let's say in a place like Alexandria, can you comment

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<v Speaker 1>on that, you bet? Again, those those areas that are

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<v Speaker 1>around the metro stops that that allowed for dense um

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<v Speaker 1>development in the very beginning, they've done very well. The

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<v Speaker 1>ones that UM Vienna in Fairfax County immediately comes to mind,

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<v Speaker 1>where they had single family houses and broader townhouse communities

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<v Speaker 1>rather than town centers and more dense development. UM. They're

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<v Speaker 1>having to rethink their planning. Now. Where would you like

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<v Speaker 1>to see a new metro stop. That's a great question

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<v Speaker 1>because frankly, those new met pro stops are really hard

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<v Speaker 1>to come by now because the land is so hard

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<v Speaker 1>to to purchase now, is so expensive to do UM.

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<v Speaker 1>I think, frankly, those new metro stops probably aren't going

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<v Speaker 1>to happen now. What's really going to happen now is

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<v Speaker 1>they simply have to rethink the zoning and the planning

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<v Speaker 1>around where those metro stops are now. So speaking of things,

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<v Speaker 1>getting more expensive, not going to new associates, your real

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<v Speaker 1>estate company. Prices go up, commissions get higher. Business must

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<v Speaker 1>to be really good. But what does it mean for

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<v Speaker 1>the potential home buyer and the potential home seller in

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<v Speaker 1>this area? You know, Ultimately markets seek balance over time,

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<v Speaker 1>and where we've seen this explosive growth in d C

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<v Speaker 1>um as compared to the suburbs ten years ago, in

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<v Speaker 1>the last boom, it was the suburbs that were booming

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<v Speaker 1>that it will seek balance over time. Um As prices

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<v Speaker 1>have gone up in d C. Ultimately, it's going to

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<v Speaker 1>reach a point where prices have come to a point

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<v Speaker 1>where people will start to move back more to the suburbs.

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<v Speaker 1>Not the suburbs are dead now. Is just a little

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<v Speaker 1>bit more affordable in the suburbs, and it will get

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<v Speaker 1>people will come back to the suburbs. New York City,

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<v Speaker 1>Coastal California. A lot of foreign he has come in

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<v Speaker 1>and help boost those prices. Is that happen in washing

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<v Speaker 1>d C. I don't think it's happened in DC as

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<v Speaker 1>much as it has in San Francisco. In l A

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<v Speaker 1>and New York we've seen some of that, but just

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<v Speaker 1>not as much as it has in those other big cities.

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<v Speaker 1>Tell me about the issues that your customers are most

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<v Speaker 1>concerned about in an interest rate environment with low as

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<v Speaker 1>interest rates are now. Obviously rates are not the issue.

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<v Speaker 1>Down payment is the biggest issue for most of our folks.

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<v Speaker 1>Um And and not that that's an enormous issue, but

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<v Speaker 1>down payment is the bigger issue than payments. Well, David Hall,

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<v Speaker 1>we thank you so much for joining us today. Thanks

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<v Speaker 1>for the opportunity, appreciate being here. I was just gonna ask,

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<v Speaker 1>I want to. I just wanted to if there's one

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<v Speaker 1>thing that you could describe now and say it's going

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<v Speaker 1>to be different you come back in a year from

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<v Speaker 1>now or so on, what is the what do you

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<v Speaker 1>think is gonna be the biggest change here? I think

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<v Speaker 1>the biggest change here is going to be jobs, because

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<v Speaker 1>our biggest challenge here has been with the sequestration and

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<v Speaker 1>the cutbacks and defense spending UM that really arecipitated the

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<v Speaker 1>downturn in our market here. That's eventually going to get better.

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<v Speaker 1>So I think our market here is going to be

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<v Speaker 1>better a year from now than it is now. Um

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<v Speaker 1>And frankly, Northern Virginia market was impacted more to the

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<v Speaker 1>negative than most of our market because of the cutback

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<v Speaker 1>and defense spending. Contractors here are learning how to to

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<v Speaker 1>to adjust for that. So I think our market is

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<v Speaker 1>gonna be better a year from now than it is now.

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<v Speaker 1>Very interesting. Thank you very much, Thank you appreciated David Howell.

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<v Speaker 1>He is the chief information officer and executive vice president

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<v Speaker 1>of McInnerny Associates. They're based in Washington, d C. Thank

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<v Speaker 1>you very much. We are broadcasting live from the Kempton

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<v Speaker 1>Morrison House Hotel and alex Hendria, Virginia. This is Bloomberg Radio.

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