A Flat Year for New Condo Sales in DC Area Sets the Stage For a Resurgent 2018
The DC area housing market as well as the new condo market had an unpredictable 2017, with periods of flat prices and rising inventory, in the District especially. Now, a new report shows that the slow down in the condo market has set up 2018 to see a resurgence in activity.
A new Delta Associates report finds that regional new condo prices only inched up by 0.9 percent in 2017, as the net number of condo sales (1,333) dropped off by 24 percent compared to 2016. Consequently, inventory increased to hit a 12.8-month supply at the end of the year.
Condo sales in 2017 compared to 2016
This increased supply of new condos was particularly pronounced in the District, where inventory rose from 9.4 months in the fourth quarter of 2016 to 15.1 months in the fourth quarter of 2017. Among the city's submarkets, the range of supply is anywhere from 6.7 months in Mideast to 32 months' worth in Upper Northwest.
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Over the course of the year, 1,104 condos broke ground in the region, a notable drop from the 1,838 units started in 2016; the drop off is partially the result of several hundred units being delayed. Meanwhile, 1,912 units are projected to begin construction in the area this year, creating a 36-month pipeline of 4,090 units.
"After a brief lull in construction activity, we expect starts in 2018 to rebound along with sales activity," the report states. "Price growth should continue to be moderate in the first few quarters of 2018 before accelerating later in the year and 2019."
Sub-market definitions:
- Capitol East includes Capitol Hill, Capitol Riverfront, Hill East, NoMa, Southwest Waterfront, and everything east of the Anacostia River.
- Upper Northwest includes most neighborhoods west of Rock Creek Park.
- Mideast includes includes Brookland, 16th Street Heights, Petworth, Riggs Park, and Columbia Heights.
See other articles related to: delta associates, dc condo market, dc area condo market
This article originally published at https://dc.urbanturf.com/articles/blog/far-fewer-sales-of-new-condos-last-year-lead-to-high-levels-of-supply/13451
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