The supply of new condos either actively marketing or for sale in the DC region is currently at its lowest level in a decade, according to a new report. Perhaps consequently, the sales volume for new product in the third quarter fell to a two-year low.
The report, from real estate research firm Delta Associates, posits that the drop in sales volume could either be due to buyer reluctance as a result of higher mortgage rates and the effects of sequestration, or rather just that the supply of new inventory is so low that it is curtailing sales activity.
Following are a few of the key findings from the report:
- In the DC region, there are currently 2,223 new condo units under construction or being marketed, down from 2,849 in the first quarter of the year. What that translates to is just 9.6 months of new condo inventory, based on the current sales pace. To give this number some historical perspective, last July inventory stood at 3,629 units. In 2007, there were nearly 20,000 new condos on the market.
- Inventory varies depending on the sub-market. For example, in most sections of DC proper and portions of Fairfax, Falls Church and Prince George’s County, there is less than six months of inventory (and far less in certain neighborhoods). However, in Arlington/Alexandra, there is close to 1.4 years of supply.
- There were 413 sales in the DC area in the third quarter, down 23 percent from the third quarter of 2012 and the lowest quarterly total since the fourth quarter of 2011.
- New condo prices in DC have risen 10 percent in the past year. In suburban Maryland, prices have risen 2.9 percent and in Northern Virginia, 2.5 percent.
- 1,944 units are schedule to start construction or switch to condos this year. Delta Associates has identified 15 Class A 80-150-unit apartment projects that are under construction (a total of 1,703 units) that could convert to condos.
The rendering of the condo project pictured in the thumbnail image is 2337 Champlain Street.
This article originally published at http://dc.urbanturf.com/articles/blog/new_condo_supply_remains_at_lowest_level_in_a_decade/7657
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