Rendering of apartment building lobby at Monroe Street Market.
The ever-growing supply of new apartments in the DC area seems to finally be catching up with demand. After years of increasing, rents are now dropping in many parts of the region.
A Delta Associates report out Wednesday analyzing the regional market in the fourth quarter of 2012 states that rents for Class A apartments (large buildings built after 1991, with full amenity packages) in the region rose 1.9 percent during the prior year, compared to an increase of 2.4 percent in 2011. While still rising region-wide, the report reveals that rents in many sub-sections of the region are now falling, after showing double-digit annual gains last quarter.
For example, Class A rents in the NoMa/H Street area fell 4.7 percent, after reporting 14.1 percent gains in the prior quarter. And in the upper NW sub-market, rents dropped about 1 percent after rising 13.7 percent in the third quarter of 2012. Rents did not fall everywhere, however. Capitol Riverfront (3.9%) and the sub-market that includes Penn Quarter, Logan Circle and Dupont Circle (2.5%) showed rent increases.
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: $2,605 a month
- Columbia Heights/Shaw: $2,514 a month
- NoMa/H Street: $2,337 a month
- Capitol Riverfront: $2,212 a month
- Alexandria/Arlington: $1,840 a month
- Rockville/North Bethesda: $1,942 a month
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. Back in April, we reported that the delivery of new apartment projects (and resulting increase in vacancies) will put downward pressure on rents in the region by the end of the year. It appears that is just what has happened.
The report released today 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 https://dc.urbanturf.com/articles/blog/dc_apartment_rents_drop_as_new_supply_hits_market/6497.
Most Popular... This Week • Last 30 Days • Ever
Even though flipping is not as prevalent in the city as it used to be, there are sti... read »
The change would allow for an 80-acre portion of DC's 272-acre Armed Forces Retiremen... read »
The Capitol Hill home has been listed for sale that has a number of serious security ... read »
The listing will hit the market on Wednesday, according to the Washington Business Jo... read »
Today, UrbanTurf looks at what we think will be the metrics that will determine the d... read »
With interest rates reaching their highest levels in 22 years, it is critically impor... read »
The Church of the Epiphany has filed plans with the city to demolish the rear portion... read »
Just before the holiday, UrbanTurf is taking its semi-annual look at the neighborhood... read »
Plans have been filed with DC's Historic Preservation Office to convert the building ... read »
An application filed with DC this week signals the end is nigh for a McDonald's locat... read »
With this weekend's DC houseboat tour a day away, UrbanTurf thought it only fitting t... read »
President Obama travels to Denver this morning to sign the stimulus bill that has bee... read »
In this week's installment of Ask An Agent, a reader wonders if there is a rule for h... read »
As The Wharf prepares to begin construction, DC's houseboat community heads to its ne... read »
In this week's installment of Ask An Agent, a reader asks a fairly common question th... read »
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. Start browsing below!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro