David Charron, president and CEO of Rockville-based multiple-listing service MRIS, writes an occasional column about the Washington-area real estate market.
A few months ago, our subsidiary RealEstate Business Intelligence (RBI) provided data for a Washington Post article about the rise in popularity of condos and townhouses throughout the D.C. area. With the help of RBI, we took a closer look at the numbers to find out where the “hot” condo/townhouse markets are in D.C.
Since there is no singular definition for what makes a neighborhood popular, we looked at a few data points: the number of new listings, the length of time homes are on the market before they sell, and whether the properties sell for more than the original listing price. After crunching all the numbers, it quickly became clear that three distinct D.C. neighborhoods dominate the playing field.
Of the three popular neighborhoods, Dupont Circle/Adams Morgan (Zip code 20009) has the most condos, co-ops and townhouses on the market, with 112 homes added in March, a 7.7 percent increase since last year.
But it is Columbia Heights that showed the biggest percentage jump, with the total number of condos, co-ops and townhouses nearly double what it was a year ago, 41 compared to 21.
Over in Capitol Hill there are two different Zip codes to look at, each one with slightly different trends. The patch of Capitol Hill south of East Capitol Street saw new listings increase year-over-year in March by 9.5 percent, but the northern half of the neighborhood saw a decrease from 90 new listings down to 60, a 33 percent decrease. (Note: we compared numbers for March only since that is the month when inventory tends to peak for the region as a whole.)
This northern section of Capitol Hill keeps beating its own records as it grows in popularity, particularly when you compare the condo/co-op submarket to the other categories. Five years ago, condos and co-ops generally had the highest number of average days on the market, but lately they have become the fastest type of home to sell — going from a high of 194 days on market in April of 2009 to only 11 days in April 2014. Townhouses have gone from selling in an average of 81 days to 24 over the same time period and fully detached houses from 165 days to 55.
When it comes to the original listing price, these three neighborhoods have the highest chance of homes selling for more than their initial price compared to anywhere else in the District for co-ops, condos and townhouses. We call this the ratio of original list price to sold price, and if the ratio goes more than 100 percent then it means buyers are paying more than the asking price, a sure sign bidding wars are taking place.
Columbia Heights/Mount Pleasant rises to the top as one of the most competitive places for buyers who want attached homes since that neighborhood’s ratio peaked at 107.4 percent in June of 2012 and has been more than 100 percent almost every month since then.
Even though it took Capitol Hill (north) until February of 2013 to cross the 100 percent mark, it has largely stayed above or just slightly below that level ever since then with a peak of 105.5 percent in September 2013.
Dupont comes in third since it took until April of 2013 for it to surpass 100 percent and has had a few extra dips below the others.
Condos, co-ops and townhouses have steadily grown in desirability in recent years, but these three D.C. neighborhoods pulled away from the pack early and have stayed in the lead. Given how limited the inventory is already for 2014, they are unlikely to become an easier place to buy in, but will probably increase in competitiveness as the year unfolds.
Previously from David Charron: