Despite high demand for housing and tight supply, prices in the DC condo market remained level in most of the metro’s submarkets in the first quarter of 2017. With stable prices, sales surged, particularly in the new development segment of the condo market, according to a recent market report by the research firm Delta Associates.
A total of 433 new development units were sold in the first quarter of 2017, up significantly from the 317 units sold in the same period last year. New development sales were up year-over-year in all three of DC’s sub-markets in the first quarter, with the largest increases recorded in the suburbs. Northern Virginia and Suburban Maryland recorded 49.5 percent and 30.5 percent gains, respectively. Meanwhile, the District recorded a 13.6 percent sales increase in the first quarter from last year.
Delta Associates forecasts that 1,700 to 2,100 new condo transactions will be recorded in 2017, which will top the three-year high of 1,685 recorded last year.
New condo prices remained flat in the 12-month period ending March 2017. The average effective price per square foot for new development condos rose 0.9 percent year-over-year during that period. The metro area’s rapidly growing Capitol East submarket recorded 10 percent price growth in the same period — the largest price growth recorded in all the metro area’s submarkets.
Comparatively, the average price per square foot in the DC metro’s priciest downtown area, Upper Northwest DC, was still far below that of Manhattan’s Downtown — $1,300 in DC compared to $2,811 in NYC.
Meanwhile, resale activity was down 1.8 percent from last year in the 12-month period ending February 2017, with 15,630 total units sold during that period. According to Delta Associates, resale transactions have averaged 14,690 units per year since 2013, a notable increase from the 11,615 units averaged annually during the period of 2009 through 2012.
The median resale condo prices rose 2.7 percent in February 2017 from the previous year.
Landlord incentives, as a percentage of asking price, rose to 1 percent in the first quarter of 2017 on average in the metro area, up from the 0.8 percent recorded last year.
“The Washington condominium market continued to grow in the first quarter of 2017, building on its already robust sales pace in 2016,” Delta Associates summarized in the report.
Additionally, price increases in the mid-single digits are anticipated by Delta Associates over the next 24 to 36 months, with some submarkets expected to record higher gains.