The DC area could be a renter’s market, at least for a spell, by later this year.
A report out Monday from Delta Associates analyzing the regional apartment market in the first quarter of 2012 states that, despite a strong first quarter for landlords, the delivery of new apartment projects and rising vacancies will put downward pressure on rents in the region by the end of the year.
As we reported in January, the rent increases that have made DC-area residents shudder in recent years began to slow down in late 2011 and that trend continued in the first quarter of 2012. Rents for Class A and B apartments rose 2.1 percent for the 12-month period ending in March, and Class A rents rose by just 2.3 percent, compared to an increase of 6.9 percent during the preceding 12 months.
The vacancy rate (3.8 percent) is unchanged from what was reported for the 4th quarter of 2011. This rate is the second lowest for any metro area in the country (behind only the Big Apple), and is “powered by the extremely tight Class B market at 2.2% vacant, made up of older more modestly priced units” according to the report. But that will change in the coming year.
Courtesy of Delta Associates.
Approximately 8,000 new apartment units are coming online in the DC area in the second and third quarter of 2012, far outpacing the absorption rate for this period. As a result, Delta Associates vice president Grant Montgomery told UrbanTurf that by the end of 2012, renters could start seeing their rents fall as a result.
“If by the end of 2012, you haven’t seen your rent decline, chances are you will by the end of 2013,” Montgomery said.
But take advantage of the drop in rents while you can. The demand for rentals will catch back up with supply in 2014 and 2015 and rents will start increasing again.
- Class A apartments are typically large buildings built after 1991, with full amenity packages. Class B buildings were generally built in the 1950s, 1960s and 1970s, with more limited amenity packages.
This article originally published at http://dc.urbanturf.com/articles/blog/dc_will_be_a_renters_market_by_late_2012/5365
Most Popular... This Week • Last 30 Days • Ever
A final look for the year at the DC neighborhoods where home values rose the most thi... read »
Here's what you need to know about reporting profit made from the sale of your home.... read »
The redevelopment will focus more heavily on renovations and eliminating moves off-si... read »
With two additional museums authorized as part of the Smithsonian system, a forthcomi... read »
Another hotel in the DC area will bite the dust to make way for the new development.... read »
UrbanTurf has compiled virtual looks at large new developments around the DC region.... read »
A Tysons development has the area's five tallest buildings on the boards.... read »
Homeowners will be able to expedite the ADU approval process with two options for one... read »
A rezoning may be in the works for the AutoZone site.... read »
The designs for both the streetscape and the park at Dave Thomas Circle are in their ... 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. Visit guides.urbanturf.com or start browsing below!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro