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