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As 14th Street NW transitioned from what it was for many years to what it is becoming now, lower cost/density housing was changed irrevocably. Existing structures were upgraded in part to justify much higher rents/sale prices and to offer many of the housing amenities that market would require. New housing was built that included $300k-$600k one bedroom condos. It is not just the SUPPLY but the type of housing supplied that influences price. Dramatically increasing further the supply of expensive condos and apartments with lots of amenities will NEVER result in a substantial and sustained reduction in the price point or average rent in that neighborhood. The same thing is happening/happened in Capitol Hill, H Steet, etc. Housing prices are not than influenced by short or intermediate term changes in demand or supply on the margin. Prices are sticky. And as anyone who has owned real estate or lived in a "neighborhood in transition" will tell you, the momentum is almost always in a single direction. Price the prior neighborhood residents out and cater to the new, more affluent clients of the future. It never goes back.

by Tom M on Dec 19, 2012 1:53 pm • linkreport

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