A new report by Delta Associates offers an optimistic outlook on the condominium market in Washington.
Prices for new condos in the Washington metro area rose for the first time since 2005 because of the lowest number of units in the pipeline in nine years and the highest sales volume since 2010, according to the Alexandria research firm’s mid-year condominium report. Other findings in the report include:
●For the first time since the third quarter of 2010, condo sales broke the 500-unit mark. There were 571 condo sales in the second quarter of 2012. That’s the highest total since 667 sales were recorded in the second quarter of 2010.
●Stale inventory now makes up a smaller portion of the total amount of units on the market. More than 65 percent of the units on the market have been for sale two years or less. That’s the highest ratio of newer inventory since 2007.
But that number varies greatly within the market. In Mideast D.C. — which Delta Associates defines as the Shaw, Columbia Heights, the 14th Street corridor, Adams Morgan, U Street corridor, Brookland and Eckington neighborhoods — there is less than six months of new inventory left to sell. In Loudoun and Prince William counties, there is 2.2 years of inventory.
●New unit prices increased by 2.2 percent in the 12-month period ending June 2012, the first year-over-year increase in prices since 2005. Condo resale prices increased 8.5 percent since last May.
The strongest sales in the District were in the Capital East market — which includes Capitol Hill, the H Street corridor, Southwest Waterfront, Capitol Riverfront neighborhoods and communities east of the Anacostia. There were 73 units sold in the second quarter. Loudoun and Prince William counties lead in sales in Virginia with 131 units sold. Montgomery County leads in sales in Maryland with 79 units sold.
●The average price per square foot for new condo sales during the 12-month period ending in June increased for the first time since 2005, rising 2.2 percent. The region’s highest prices per square foot for new condos were in Central D.C. at $700 per square foot. The lowest were in Loudoun and Prince William counties at $170 per square foot.
Delta Associates states that a shortage of new condos is developing in the Washington metro area. For all of 2012, officials estimate about 1,300 units will begin construction and an additional 900 units already underway will begin sales. According to the firm, banks are still not willing to finance large-scale condo projects without significant pre-sales.