New Condo Sales Shoot Up in DC As Inventory Rises

• July 8th 2014

by UrbanTurf Staff

Buyers on the hunt for a new condo in the region will have more to choose from in the coming year, but those looking in DC proper will likely need to move quickly.

A report out Monday from real estate research firm Delta Associates showed that the number of unsold units in projects currently marketing or under construction (and not yet marketing) stood at 2,935 at mid-year, and that this supply is likely “to rise further over the next six months, as switches and conversions reappear in the market.” Of the 3,032 units that will begin sales within the next three years, approximately one-third fall in the Capitol East sub-market in DC.

While new condo sales area-wide were fairly sluggish in the second quarter, sales volume rose in DC, skyrocketing in certain parts of the city. Sales increased 26 percent in DC proper, rising 96 percent in the Mideast DC sub-market and a whopping 150 percent in the upper NW sub-market. Sales in the suburbs, however, were down “due to a lack of supply,” the report stated, dropping 53 percent in Arlington/Alexandria and 39 percent in Montgomery County.

As for the inventory of new condo product, it varies greatly depending on sub-market. For example, in upper NW DC, there is less than one month supply at the current sales pace, according to the report. However, in Arlington/Alexandria, there is about a 22-month supply, and in Prince George’s County there is almost 168 months of inventory at the current sales pace.

From the report:

The supply-demand balance in the metro area will continue to favor the developer, with too little new condo unit supply and rising prices – most notably in Northern Virginia and less so in the District.

Following are a few more findings from the report:

• The average effective price per square foot for new condo sales in the region rose by 12 percent between June 2013 and June 2014. In Central and Upper NW DC, prices per square foot are averaging $860 to $895.

• The average size of a new project is increasing for the first time in eight years.

• 1,578 units in 29 projects started construction in 2013, the highest total in about eight years.

Sub-market definitions:

• Capitol East includes Capitol Hill, Capitol Riverfront, Hill East, NoMa, Southwest Waterfront, and everything east of the Anacostia River.

• Mideast DC includes Shaw, U Street, Adams Morgan, Columbia Heights, Petworth, Bloomgindale, Takoma, and Brookland.

• Upper NW DC includes the neighborhoods west of Rock Creek Park, including Georgetown, Glover Park, Woodley Park, Tenleytown.

• Central DC includes West End, Dupont Circle, Logan Circle, East End, Mt. Vernon Square/Triangle.

This article originally published at https://dc.urbanturf.com/articles/blog/sales_of_new_condos_shoot_up_in_dc_as_inventory_eases/8704.