9.6 Months: New Condo Supply in DC Area Hits Record Low

by UrbanTurf Staff

9.6 Months: New Condo Supply in DC Area Hits Record Low: Figure 1
Courtesy of Delta Associates.

The inventory of new condos on the market in the DC area just keeps getting smaller.

Real estate research firm Delta Associates released its first quarter 2013 report on the DC metro area condo market on Tuesday, which revealed that the inventory of new condos in the region has reached a new record low. Readers may remember that in January, Delta reported that there was just a 12-month supply of new condos on the market; that level has now fallen to 9.6 months. Following are a few of the key findings from the report:

  • In the DC region, there are currently 2,849 new condo units under construction or being marketed. What that translates to is just 9.6 months of new condo inventory, based on the current sales pace. To give this number some historical perspective, last July inventory stood at 3,629 units. In 2007, there were nearly 20,000 new condos on the market.
  • Inventory varies by sub-market. From the report: “In most of the District and Prince George’s County, there is less than six months of inventory available, but in Loudoun/Prince William, there is 1.4 years of inventory.”

9.6 Months: New Condo Supply in DC Area Hits Record Low: Figure 2

  • A torrid sales pace at new projects and a relatively small number of units in the pipeline are the main reasons that inventory is so low. Projects that have been introduced to the market in the prior 12 months have sold at a pace of 8.3 units per month; in contrast, projects that have sold out since 2012 averaged 2.6 sales per month. (It is important to note when looking at this differential that the final units to sell in a project are usually the least desirable. Still, the increased sales pace is noteworthy.)

As for inventory coming on the market, here is what Delta’s Condominium Practice Director William Rich told UrbanTurf: “1,000 units are in the works that are expected to deliver or start selling by later this year or 2014, but many more are needed to help return the area to healthy supply levels, given the current sales pace.”

The rendering of the condo project pictured in the thumbnail image will be located at 11th and M Street NW. More details here.

This article originally published at https://dc.urbanturf.com/articles/blog/9.6_months_new_condo_supply_in_dc_area_hits_record_low/6873


  1. Jeffrey said at 8:44 pm on Tuesday April 2, 2013:
    Probably has something also to do with the fact that condos have become a very high risk proposition for developers. Between having to pay ordinary income tax on sales, posting a 10% bond for 2 years with DC + DC's 5% condo tax. Where is the incentive?! Keep on renting because rentals are considerably lower risk for less effort.
  1. Caleb said at 9:05 pm on Tuesday April 2, 2013:
    Well, this won't do much to help that bubble people keep waiting to burst in the district. @Jeffrey, I think developers know that there is a substantially low vacancy rate for rentals in this town and they can capitalize on charging high rates and fees for new fancy buildings with doormen and rooftop pools. Unfortunately, in the long run, due to the lack of available homes and condos for sale this will creating an environment where home ownership in Washington will be for the very wealthy and all else will rent for a lifetime. *see Manhattan, Boston and San Fransisco for cities who paved the way of this model.
  1. Juanita de Talmas said at 2:39 pm on Wednesday April 3, 2013:
    How many <i>existing</i> condo units are for sale?
  1. Mark Wellborn said at 3:27 pm on Wednesday April 3, 2013:
    Juanita, There are 672 existing new units and 1,710 active resale units on the market in the DC area right now, according to Delta Associates' William Rich. Mark Wellborn Editor
  1. Juanita de Talmas said at 4:07 pm on Wednesday April 3, 2013:
    They're telling me on GGW that that equals 1.7 months of supply. Pretty tight market. Thanks.
  1. bjk said at 6:04 pm on Wednesday April 3, 2013:
    How to reconcile that with this: http://online.wsj.com/article/SB10001424127887324392804578362722741053596.html This year alone, developers are expected to deliver more than 15,000 new apartment units in the greater metro area, with 11,000 more expected in 2014. That is well above the more than 6,000 units delivered, on average, each year during the prior decade, according to research firm Delta Associates. . . . While landlords managed a 1.9% increase in rent prices last year—down from 2010's 7.8% incline—this year could show the first drop since 2009, Delta reports. The vacancy rate for these high-end apartments could jump from the current 4.2% to 5.9% in 2014, according to Delta.
  1. bjk said at 6:11 pm on Wednesday April 3, 2013:
    I'll answer my own question. It looks like the supply is mostly rentals, not for sale units, suggesting that developers think rental offers a better return. Maybe some of those will switch to condo sales.
  1. Janson said at 6:17 pm on Wednesday April 3, 2013:
    BJK: Those numbers are for rentals and condos. The numbers in this article are for just condos. Clearly, renting out is disproportionately appealing to developers right now, though I have to imagine some substantial number of those will be converted if prices for condos continue to rise.
  1. ABD said at 7:37 pm on Wednesday April 3, 2013:
    BJK, thanks for the helpful statistic. I think a lot of the increase in sales pace has had to do with the abnormally high rental rates throughout the region over the past couple of years. High rents have lead to an increase in the number of first time home buyers. Developers have been building into the rental unit hole that Delta Associates predicted for 2013 since about 4Q2010. As supply of rentals increases and rents go down, yes, developers may switch their buildings to condos. And also, the math for renters who are currently shopping for a unit to buy due to rising rents, may change. Finally, as job growth expands in the rest of the country, we may see the DC real estate market cool down a bit. That's my theory at least.

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

Looking to Give People A Reason to Stay Past 6pm
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?
Hitting Its Growth Spurt
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
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
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 »


Profiles of 14 neighborhoods in suburban Maryland

Small-Town Living in the State Capital
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
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
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
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
DC’s Northern Neighborhood on the Cusp
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?
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
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
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
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
Getting a Vibrancy of Its Own
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Not To Be Confused With Takoma Park
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

New Development Could Shake Up Pastoral Peace
A Little Bit of Country Just Inside the District’s Borders
Not to Be Confused With Bloomingdale
Fort Totten
Five Years Could Make a Big Difference
H Street
A Place To Party, and To Settle Down
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
Evolving from a Brand to a Neighborhood
Ripe for Investment Right About Now
The Difference 5 Years Makes
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
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »