loading...

DC Area Rents Drop 3% As New Apartment Supply Rises

by UrbanTurf Staff

image
The Shay, a 245-unit apartment project planned in DC.

A report out today from Delta Associates analyzing the regional apartment market in the fourth quarter of 2013 reveals that rents for Class A apartments (large buildings built after 1991, with full amenity packages) in the DC area dropped 3 percent last year, a clear sign that the supply of new apartments is catching up to demand in the area.

Class A rents fell year-over-year by about a percentage point in upper NW DC and also dropped in the Rosslyn-Ballston Corridor (-2.4%) and Silver Spring (-6.8%) Rents did not fall everywhere, however. In DC proper, rents actually rose by 0.8 percent despite the large number of new apartments delivering, thanks to a continued high level of demand. In the NoMa/H Street sub-market, rents increased 3.9 percent.

image
Courtesy of Delta Associates. Click to enlarge.

Here is a quick snapshot of average rents for Class A apartments in DC area sub-markets, as defined by Delta:

  • Central: (Penn Quarter, Logan Circle, Dupont Circle, etc.) $2,822 a month
  • Upper Northwest: $2,648 a month
  • Columbia Heights/Shaw: $2,480 a month
  • NoMa/H Street: $2,295 a month
  • Alexandria: $1,955 a month
  • Rosslyn-Ballston: $2,337 a month
  • Tysons Corner: $1,746 a month
  • Bethesda: $2,580 a month

Note: The rents are an average of studios, one and two-bedroom rental rates at new buildings in the DC area.

There are a number of reasons that rents are now falling, but primarily it is due to high levels of new supply and a pipeline that now seems oversized compared with demand. For loyal UrbanTurf readers this should not come as surprise. In 2012, we reported that the delivery of new apartment projects (and resulting increase in vacancies) will put downward pressure on rents.

Definitions:

  • Class A apartments are typically large buildings built after 1991, with full amenity packages. Class B buildings are generally older buildings that have been renovated and/or have more limited amenity packages.

This article originally published at http://dc.urbanturf.com/articles/blog/dc_area_rents_drop_3_as_new_apartment_supply_rises/7979

9 Comments

  1. B C said at 10:41 pm on Thursday January 9, 2014:

    Can you also report on the trends in Delta’s Class B report? Thanks!

  1. h st ll said at 12:12 pm on Friday January 10, 2014:

    Interesting that H St/NOMA has seemingly been able to absorb all the new inventory and is now back to increases (after some recent decreases).

  1. J said at 1:47 pm on Friday January 10, 2014:

    I don’t see on the chart where it shows that DC area rents have decreased by 3%...It actually shows a 0.8% increase in rents in the District…can you explain?

  1. The Editors said at 1:52 pm on Friday January 10, 2014:

    J,

    That statistic is not included in the chart featured in the article, but the report does state that Class A DC area rents dropped by 3%.

    In DC proper (meaning just Washington, DC), rents rose by 0.8%.

    Hope that answers your question.

    The Editors

  1. The Editors said at 1:53 pm on Friday January 10, 2014:

    B C,

    Yes, we will be reporting on the Class B market next week.

    The Editors

  1. RL said at 4:07 pm on Friday January 10, 2014:

    The inventory of new, Class A apartments has just started to be delivered. Beginning later this year and into 2015, the bulk of the new rental units will be delivered and at that time, the market will likely see more significant rent decreases and concessions. The information in the Delta reports has never been real accurate when showing the supply/demand ratio for rental apartments. The fact is that DC has one of the largest pipelines of new apartments as compared to any other major metro area. Most of the institutional equity has vacated the DC Class A, multifamily development focus until this huge supply begins to show that it is being absorbed and occupied. Good for the renters. Bad for the investors of these new projects, at least for now. In time, DC will rebound from this over-supply and regain its top ranking as a great place to invest in Class A mulitifamily rental housing, but it will take a few years.

  1. mona said at 4:37 pm on Friday January 10, 2014:

    Were do private home rental and basement apartment rentals fall? Class A, B or do they get counted at all? Are the rents for these higher or lower?

  1. James said at 9:30 am on Saturday January 11, 2014:

    Tysons Corner is cheap cheap cheap!

  1. Mark Wellborn said at 5:28 pm on Sunday January 12, 2014:

    mona,

    Home rentals and basement apartments are not analyzed as part of the Delta reports.

    The Editors

Join the discussion

UrbanTurf now requires registration in order to post comments. Register here, or login below if you are already registered.

Click here if you forgot your password.



DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Ballston
Looking to Give People A Reason to Stay Past 6pm
Clarendon
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Rosslyn
Hitting Its Growth Spurt
Shirlington
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
Huntington
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
Parkfairfax
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »

Maryland

Profiles of 14 neighborhoods in suburban Maryland

Annapolis
Small-Town Living in the State Capital
Bethesda
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
Potomac
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
Wheaton
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Hyattsville
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Bloomingdale
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
Brightwood
DC’s Northern Neighborhood on the Cusp
Burleith
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
Crestwood
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Fort Totten
Five Years Could Make a Big Difference
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
Georgetown
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
Kalorama
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
Palisades
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Petworth
Getting a Vibrancy of Its Own
Shaw
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Takoma
Not To Be Confused With Takoma Park
Tenleytown
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

Brookland
New Development Could Shake Up Pastoral Peace
Deanwood
A Little Bit of Country Just Inside the District’s Borders
Eckington
Not to Be Confused With Bloomingdale
H Street
A Place To Party, and To Settle Down
Langdon
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
NoMa
Evolving from a Brand to a Neighborhood
Rosedale
Ripe for Investment Right About Now
Trinidad
The Difference 5 Years Makes
Woodridge
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 neighborhoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Hillcrest
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »

Upcoming Seminars ▾