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How the Class A Apartment Market Has Recovered in the DC Region
All signs point to a luxury apartment market in the DC area that has fully recovered from the pandemic.
Class A apartment rents in the region are now higher than before the pandemic started, according to a new report from Delta Associates on the third quarter market. This rebound is largely due to the record-high apartment absorption observed over the past year, to the tune of 16,367 units in the area. Rent recovery has been somewhat uneven, however.
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The Suburban Maryland submarket has average rents that are 104% of what they were in March 2020. Similarly, annual absorption increased by 159% year-over-year, compared to a 76% increase seen in Northern Virginia. Average rents in Northern Virginia during the third quarter were 102% of what they were in March 2020.
In DC, however, rents are still below (96.6%) what they were in early 2020. This is despite the fact that annual absorption citywide increased by 201% year-over-year, hitting a record high of more than 7,000 units absorbed.
The Capitol Hill/Capitol Riverfront/Southwest submarket led the metro area in absorption, with 3,690 units leased in the past year. Meanwhile, the NoMa/H Street submarket led the region in apartments delivered, with 2,027 units entering the market since late 2020. Both of these areas account for two-thirds of the city's 15,000-unit 36-month pipeline.
As for the region overall, there are 37,100 apartments in the 36-month pipeline, 4,500 fewer than were in the works a year ago. Nearly 15,000 units are slated to deliver over the next 12 months, 33% more than delivered in the year prior.
Here is a quick snapshot of average rents for high-rise Class A apartments in DC area sub-markets, as defined by Delta:
- Alexandria: $2,154 per month
- Bethesda: $2,762 per month
- Capitol Hill/Capitol Riverfront: $2,516 per month
- Central (Penn Quarter, Logan Circle, Dupont Circle, etc.): $2,938 per month
- Columbia Heights/Shaw: $2,577 per month
- Crystal City/Pentagon City: $2,450 per month
- Hyattsville/College Park: $1,967 per month
- NoMa/H Street: $2,353 per month
- Northeast: $2,161 per month
- Rosslyn-Ballston Corridor: $2,598 per month
- Silver Spring/Wheaton: $2,039 per month
- Upper Northwest: $2,942 per month
Note: The rents are an average of studios, one and two-bedroom rental rates at Class A high-rise 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.
See other articles related to: absorption rate, class a apartments, delta associates, pipeline
This article originally published at https://dc.urbanturf.com/articles/blog/how-class-a-apartment-market-has-recovered-in-the-dc-area/18869.
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