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Rents Drop in DC For First Time Since 2009

by UrbanTurf Staff

Rents Drop in DC For First Time Since 2009: Figure 1
Rendering of apartment building lobby at Monroe Street Market.

A report out last week analyzing the regional apartment market in the second quarter of 2013 reveals that rents for Class A apartments (large buildings built after 1991, with full amenity packages) in the DC area dropped on an annual basis for the first time since 2009, a clear sign that the supply of new apartments is catching up to demand.

Class A rents fell year-over-year by about a percentage point in the NoMa/H Street area, upper NW and the sub-market that includes Penn Quarter, Logan Circle and Dupont Circle, but the rents drops were more pronounced in Northern Virginia where rents fell almost 5 percent. Rents did not fall everywhere, however. In the Shaw and Columbia Heights sub-market, rents increased 5 percent; in Bethesda, they rose 3.8 percent.

Rents Drop in DC For First Time Since 2009: Figure 2
Courtesy of Delta Associates. Click to enlarge.

Here is a quick snapshot of average rents for Class A apartments in DC area sub-markets, as defined by Delta:

  • Central: (Penn Quarter, Logan Circle, Dupont Circle, etc.) $2,759 a month
  • Upper Northwest: $2,651 a month
  • Columbia Heights/Shaw: $2,623 a month
  • NoMa/H Street: $2,295 a month
  • Capitol Riverfront: $2,253 a month
  • Alexandria/Arlington: $1,973 a month
  • Rockville/North Bethesda: $1,855 a month

There are a number of reasons that rents are now falling, but primarily it is due to high levels of new supply and a pipeline that now seems oversized compared with demand. For loyal UrbanTurf readers this should not come as surprise. A little over a year ago, we reported that the delivery of new apartment projects (and resulting increase in vacancies) will put downward pressure on rents.

Definitions:

  • 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: renting in dc, dc apartments

This article originally published at http://dc.urbanturf.com/articles/blog/rents_drop_in_dc_first_time_since_2009/7285

11 Comments

  1. David said at 1:56 am on Tuesday July 9, 2013:
    Are the average rents above for one-bedrooms, two-bedrooms, or a mix of the two?
  1. The Editors said at 3:04 am on Tuesday July 9, 2013:
    David, It is an average of studios, one and two-bedroom apartments in new rentals in the DC area. The Editors
  1. HappyRicardian said at 2:04 pm on Tuesday July 9, 2013:
    When will the "supply and demand does not apply to DC real estate" crowd shut up? This has been expected by some of us, who know that supply does effect price. Lets keep the supply going.
  1. tim said at 3:19 pm on Tuesday July 9, 2013:
    DC's new construction seems too heavily tiled toward out of the way, ammenity low neighborhoods like NoMa and Capitol Riverfront. Those neighborhoods don't really give off the city at your doorstep feel. Personally, I would like to see more housing added in the active core (Foggy Bottom, West End, Penn Quarter, Dupont, Logan,etc).
  1. HappyRicardian said at 3:42 pm on Tuesday July 9, 2013:
    Tim There are lots of amenities in NoMa and Navy Yard, and more are being added all the time. As for the established neighborhoods you mention, there simply aren't that many lots suitable for development in those places, and when new buildings are built there, they are very expensive as a result.
  1. Nat said at 11:49 am on Wednesday July 10, 2013:
    I can believe this in theory... But not a single person I know in dc actually had their rent go down this year, with the exception of one who seriously downsized.
  1. Doug said at 1:57 pm on Wednesday July 10, 2013:
    I agree with Nat, the study is all good and well, but who among us actually believes that our buildings would reduce rent or keep it the same when the lease is up? I fully expect the building management to raise my rent in September.
  1. Trespasser said at 5:24 pm on Wednesday July 10, 2013:
    I agree with Nat. I will eat my left foot if someone shows proof of their rent staying the same or going down upon lease renewal.
  1. Alex said at 9:56 pm on Wednesday July 10, 2013:
    I can attest that my rent actually stayed the same. I have a 1-bedroom at Archstone (now Avalon) First & M in NoMa. I just resigned last week. Base rent of $2,222. Of course I'll also be dealing with the construction outside my window on 1st St NE for at least the next year.
  1. Rhetor Marcus said at 9:48 am on Thursday July 11, 2013:
    I don´t think that the writer intended to suggest that managers were lowering rents for existing renters, but rather for new renters and these affect average rents. Someone signing a lease now on an apartment identical to yours might get a lower rent than you did last year. However, the trend will make it less likely that your rent will rise.
  1. C said at 1:36 pm on Thursday July 11, 2013:
    Exactly to what Rhetor Marcus said. It's not that LL will drop or lower your rent; they are just likely not to increase it. LL would lower rents if everyone started moving out in favor of an apartment equal to or better than current apartment for less money. It would depend on how good a deal new apartment dwelling is to make the hassle of moving worth it. It sounds like in central nw/downtown DC that the change is 1% or under, which hardly makes it worth talking about, unless it is the start of a downward trend.

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