High-end rental project planned for 7340 Wisconsin Avenue.
Despite predictions to the contrary, 2014 was a good year for Class A apartments in the DC region, according to a year-end report from real estate research firm Delta Associates released late Monday.
With an influx of new inventory hitting the market, developers had predicted slowdowns in rent growth in 2014. But instead, a growing population of millennials in the District ensured that overall, rent grew in the region by 1 percent. High-rise rent prices ticked down, but only slightly; low-rise rents rose enough to balance that out. The absorption of new units was “record-setting,” Delta said, with 11,237 Class A apartments absorbed during the year.
Vacancies among Class A rentals did increase to 5.6 percent thanks to the large amount of new inventory coming online; 14,286 units were delivered in 2014. An additional 32,131 units are currently under construction in the DC area.
Amid all that competition for pricey units, Delta did see one trend: A rise in demand at both extremes of the market.
“The marketplace is bifurcated,” Delta said. “There is a flight to both quality (high end Class A units) and value (Class B product or shared Class A units).”
More from Delta:
Demographic and housing trends will power a healthy apartment market over the next five years or more. Due to a confluence of factors, including the Millennial demographic bulge and the increased preference to rent rather than own following the national housing collapse, there is an extremely large cohort of renters expected to emerge that will increase in size for another decade.
Here is a quick snapshot of average rents for high-rise Class A apartments in DC area sub-markets, as defined by Delta:
Central (Penn Quarter, Logan Circle, Dupont Circle, etc.): $2,757 a month
Upper Northwest: $2,915 a month
Columbia Heights/Shaw: $2,676 a month
NoMa/H Street: $2,289 a month
Capitol Riverfront: $2,168 a month
Rosslyn-Ballston Corridor: $2,370 a month
South Arlington: $1,988 a month
Bethesda: $2,520 a month
Note: The rents are an average of studios, one and two-bedroom rental rates at new buildings in the DC area.
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/despite_predictions_dcs_class_a_apartment_market_still_going_strong/9371
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