The new condo market remains resilient as low supply dampens sales in the DC region.
The latest quarterly report from Delta Associates shows a market experiencing slower sales and marginal price growth, as prices inched up 1.1 percent year-over-year regionwide. Despite listing prices nearly doubling in the National Landing area of northern Virginia, the new condo market has hewed to the narrative seen across the metro area, with prices rising by just 0.4 percent year-over-year in Arlington and Alexandria.
Price growth in the DC submarket was flat, with prices going up by 0.1 percent year-over-year solely off the back of the Capitol East submarket, where prices increased by 1.8 percent. Meanwhile, suburban Maryland had the strongest price growth (3.4 percent), with Prince George's County leading the way as prices there rose by 5.8 percent.
1,251 new condos sold in the region over the last year, 18.4 percent fewer than the 1,533 sold in the 12 months prior. DC accounted for 140 of the 364 units sold this past quarter, barely edging out northern Virginia (139 units sold). Nearly three out of 4 sales in DC were in the Capitol East submarket, where sales jumped from 35 sales in the first quarter to 101 in the second. Delta Associates expects the strong sales pace in this submarket to continue as additional units deliver, illustrating the overall dynamic of the market: thin inventory is determining when and where prospects are able to buy.
Lack of supply in Arlington and Alexandria led to just 12 new condo sales in the second quarter; Loudoun and Prince William counties led the northern Virginia market with 65 sales. It remains to be seen how low inventory will continue to impact the new condo market, and the shifting economic balance in the region will also determine how things develop.
"The region’s bread and butter—the federal government—continues to shrink, and while the region’s private sector will continue to expand with the arrival of Amazon’s HQ2, the growth with likely be uneven geographically," the report states. "We also anticipate more apartment and condo product will be built in Arlington and Alexandria due to Amazon HQ2. Of the anticipated demand for multifamily product, the split will favor apartments, but condos will make up a larger share than recent development trends would suggest due to the high average income of the Amazon HQ2 workforce."
This article originally published at https://dc.urbanturf.com/articles/blog/low-supply-continues-to-define-area-new-condo-market/15671.
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