Abdo said high-end demand is so strong for the Rosslyn area that his Gaslight Square is the “only project underwritten [by its lenders] exclusively as a condo project” rather than as one that could be switched to apartments if needed. The confidence was justified, he said: At a private opening party in late February, “we had 165 RSVPs, 150 in attendance on a freezing cold February day, and we sold $12 million worth of condos — about seven of the 10 penthouses in the first building.” The average price was $1.3 million.
Prices have varied greatly by location. Across the Washington area new condo prices declined 1.7 percent in the 12 months ending March 31, Delta Associates said. They were up 3.6 percent in the popular central-D.C. market , defined as Dupont and Logan circles, the West End, Chinatown, Mount Vernon Square and Mount Vernon Triangle.
But prices fell 8.3 percent in Prince George’s County, mainly because of price cuts at National Harbor. Price reductions at the Turnberry Tower luxury condo in Arlington helped pull down prices 4.4 percent in the Arlington/Alexandria market, Delta said.
For resale condos, prices in the Washington area have fallen 8.7 percent since February 2010, Delta said. Although prices rose in the District, Arlington and Loudoun, foreclosures have dragged them down 8.5 percent in Northern Virginia and 26.2 percent in the Maryland suburbs.
Michael Darby, principal and co-founder of Monument Realty, cautions against too much optimism. The District “condo market is still slow,” he said. “People are pretty nervous about buying because of the down payment needed, and there’s just not as many people buying as there once was, and no speculators looking to get [fast] appreciation” in resales.
Darby predicts that it “may be a year or so for the market to pick up” and for “rents to get to the point where people get uncomfortable [paying so much] and want to be owners instead.” He notes, though, that for a $300,000 unit, the down payment required by many lenders is steep — $60,000, “and not that many people renting have $60,000 sitting around.”
Agents and developers are watching closely to see what Miami-based condo converter Crescent Heights does with the Palatine apartment tower in Arlington that it bought at a foreclosure auction in March 2010 for $118 million. Monument Realty built the 216-unit property in 2008 to be condos but converted it to rentals midway through selling when the market collapsed.
Still, condo sellers never know who might be interested in buying. Frank Rizzo, who was working with Murphy to sell his one-bedroom condo in Foggy Bottom, found an unexpected buyer this year when he told his tenant that he would need to show the unit. Instead of opening it for showings, she decided to buy it — for cash. The deal closed March 4. “It was virtually effortless,” Rizzo said.
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