A year ago, news came that the DC area apartment market would swing from favoring the landlord to favoring the renter by the end of 2012. It now appears that projection is coming true, if just a little bit late.
A report out Wednesday from Delta Associates analyzing the regional apartment market in the first quarter of 2013 states that rents for Class A apartments in the city are up just 0.6 percent versus last year, and have dropped in sub-markets including NoMa/H Street (-1.4 percent) and Upper NW (-2.1 percent). To give these percentages some real meaning, Class A apartments in the NoMa/H Street sub-market now rent for $2,325 a month on average compared to $2,358 last year; in upper NW, apartments rent for $2,513 currently versus $2,567 in the first quarter of 2012. (The rents are a weighted average of all the units in the city.)
Courtesy of Delta Associates.
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.): $2,780 a month
- Upper Northwest: $2,513 a month
- Columbia Heights/Shaw: $2,558 a month
- NoMa/H Street: $2,325 a month
- Capitol Riverfront: $2,280 a month
- Rosslyn-Ballston Corridor: $2,324 a month
- Alexandria: $1,889 a month
- Bethesda: $2,579 a month
So why is this happening now? It basically boils down to a supply of new apartments and a pipeline that now seems oversized compared with demand. 16,300 apartment units will deliver in the DC area between Q2 2013 and Q1 2014 and another approximately 11,000 units will come online between Q2 2014 and Q1 2015. To put that number in perspective, normally 5,500 new apartment units are needed to satisfy demand in a given year.
The report released this week looked at Class A apartment projects. Next week, UrbanTurf will take a closer look at the state of the Class B market.
- 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/apartment_rents_fall_in_noma_h_street_and_upper_nw/6880
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