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Fall Market Predictions: More Choices, More Concessions For Renters

by UrbanTurf Staff

As fall approaches, there are a number of questions floating around about the DC area housing market. Will the tight inventory in the for-sale market continue? Will the slew of new apartments entering the rental market push rents down? Will the effects of sequestration become more noticeable?

With these questions in mind, each day this week UrbanTurf will be hearing the predictions and trends that local industry professionals believe will play out in the fall market. In today’s prediction, the founder of Delta Associates explains why renters will find more choices and possibly more deals in the coming months.


Fall Market Predictions: More Choices, More Concessions For Renters: Figure 1

Renters Will Have More Choices, Buildings Will Offer More Concessions

By Gregory H. Leisch, CRE — Founder and Chief Executive, Delta Associates

The commercial real estate cycle will continue to move in favor of the renter this fall, as the development industry delivers an outsized number of apartment projects/units to the market. While this will not result in rents declining as much as tenants may have hoped, there will be many more choices on the market, which could result in the return of concessions or specials on new leases.

Fall Market Predictions: More Choices, More Concessions For Renters: Figure 2

While rents are down 0.8% metro-wide since last year, an increase in the number of actively marketing new projects is what will benefit the area renter this fall. For example, metro-wide in 2011 there were 23 new projects actively marketing. Today there are 52 and by the end of the year there will be 60 projects actively marketing new units.

The abundance of new choices could mean more concessions as well. While still low, concessions at Class A apartment projects in the region increased slightly to 2.4% of face rent in the middle of 2013 versus 1.9% a year earlier. This trend could continue as the new projects hit the market in the coming months.


See below for more fall predictions.

See other articles related to: dclofts

This article originally published at https://dc.urbanturf.com/articles/blog/fall_market_predictions_more_choices_more_concessions_for_renters/7518

4 Comments

  1. charlie said at 7:36 pm on Thursday September 5, 2013:
    My GF, who lives in class D housing got a rent increase this summer. And how are "concessions" being reported. So much for the build more buildings we get cheaper rent. Turns out landlord don't mind sitting on vacant apartments for a few months.
  1. (former) Logan Lady said at 7:53 pm on Thursday September 5, 2013:
    I just moved into an older apt. building in Arlington and got a rent concession. The rent for my 1BR is about 75 dollars less per month than what it should be.
  1. Zesty said at 8:21 pm on Thursday September 5, 2013:
    @Charlie, Class D, is it a situation of income restricted housing trying to go market-rate? Like this: http://www.popville.com/2013/08/from-the-forum-heritage-at-shaw-station/
  1. JD said at 11:54 pm on Thursday September 5, 2013:
    Would like to get the author's thoughts on how this will impact the for sale market. Usually, declining rents reduces pressure/demand in the sale market and contributes to declines in sale prices. Do you expect this to happen in DC? Delta Associates predicted the 2013 supply crunch we're currently experiencing back in late 2010. Impressive work by your firm.

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