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Booming real estate pumps up Washington, D.C.'s revenue
April 30, 2013 / 8:01 PM / 5 years ago

Booming real estate pumps up Washington, D.C.'s revenue

WASHINGTON, April 30 (Reuters) - A booming real estate market helped push up the revenues of Washington, D.C., in March, with total tax collections rising 31.5 percent from a year earlier to $985.6 million, the city’s chief financial officer said on Tuesday.

The housing sector has been picking up across the country, but it is especially strong in the nation’s capital. The CFO’s office found total home sales in March were 11.1 percent more than a year earlier and the total value of all sales rose 15.7 percent from March 2012 to $328.5 million.

Still, as the federal government embarks on months of automatic spending cuts known as sequestration, many in Washington are watching for signs the local economy will stall or the city’s revenues will fall.

Real property taxes made up more than two-thirds of the district’s total collections, rising 53.6 percent from March 2012 to $677.8 million last month.

Individual income taxes also saw a large increase, of 24.7 percent to $72.1 million, as did corporate income taxes, which were up 17.9 percent over the year at $81.8 million.

General sales taxes were the major drag in March, falling 14.4 percent from March 2012 to $76.9 million, according to the CFO’s monthly economic and revenue trends report.

The average price of a single family home was $666,011 in March, 1.3 percent higher than the year before. Condominiums fetched $433,633 on average, 3.5 percent more than in March 2012.

For the last 12 months, Washington’s total tax collections were $6.221 billion. That was nearly a billion more than the $5.342 billion peak the district reached in September 2008, before the recession dragged on the city’s revenue.

The 2007-09 recession was mild for the district, which does not belong to any state, largely because it is the seat of the U.S. government, a steady employer.

There are now some signs government agencies or contractors could be moving out after government’s sequestration spending cuts kicked in March 1.

For the quarter that ended in March, the vacancy rate for local commercial office space ticked up slightly to 9.6 percent, the CFO’s office found.

Nonetheless, occupied office space reached a record high in the quarter, of 122.57 million square feet.

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