DC Area Condo Deliveries to Quadruple in 2015, Report Says

• January 7th 2015

by Lark Turner

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2015 could be the year of the condo in the DC area, according to a year-end report from real estate research firm Delta Associates.

Condominium deliveries are projected to quadruple in 2015, with 2,751 units scheduled to come online. Last year just 693 units were delivered. Construction on more than 1,600 units across 30 projects began last year.

The report also stated that effective prices per square foot for new condos are going up. Prices rose 8.8 percent in the DC area in 2014. They went up most dramatically in Loudoun and Prince William Counties, where effective price per square foot jumped to 17.6 percent. That figure was 10.8 percent in Arlington/Alexandria and 5.7 percent in DC.

Coming into 2015, Delta expects a stronger buyer market for condos accompanying continuing demand. The firm also predicts “price increases to be in the high single digits over the next 24 to 36 months, with price spikes in select submarkets.” Better jobs and easier access to mortgages could help fuel already-high demand in the condo market.

From Delta Associates:

The supply of new condos has increased for the past three quarters after almost eight straight years of decline, but a shortage still exists in the market. Despite recent activity, conversions are not likely to play a significant role in this cycle as they did in the last, especially in suburban jurisdictions. Unlike the previous cycle when many apartment projects converted to condos or “switched” midway through construction to become condos in order to satisfy demand, this time around the inventory of apartment product is ill-suited to conversion because of location or project scale – most sponsors and financial markets do not have the appetite to work through such large and therefore long sell-out programs.

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 http://dc.urbanturf.production.logicbrush.com/articles/blog/dc-area_condo_deliveries_to_quadruple_in_2015_report_says/9376.