If you’re in the market for a newly constructed high-end condominium or townhouse, numerous developments are cropping up in the District, Bethesda and Arlington to cater to your needs.
If you’re interested in a condo or townhouse that’s on the opposite end of the price spectrum, your best bet is outside the Beltway in an older building that’s some distance from a Metro station.
If you’re looking for a mid-priced condo or townhouse in Northern Virginia, expect to encounter tight inventory. You’ll probably have a much harder time than people looking for low- or high-priced units, which are in greater supply.
A recent survey by the Demand Institute, “The Housing Satisfaction Gap: What People Want, but Don’t Have,” shows that 71 percent of respondents across the United States prefer single-family houses.
But in the Washington region, townhouses and condos are attractive to a variety of buyers. Some prefer these home styles because they require less maintenance, while others are drawn to them because they can be more affordable. Townhouses and condos are priced from the $100,000s to more than $1 million — depending on the location, size and condition of the property.
Justin Ames, a real estate agent with Condo 1 in Arlington, says the number of first-time buyers was extremely low last year, but he anticipates that there will be more of them this spring, which could make the condo and townhouse markets more competitive, particularly in the lower price ranges.
“By the end of 2014, the condo market in Northern Virginia was a little flat, so sellers weren’t always receiving 10 offers unless their property was in perfect condition,” Ames says. “The market varies by neighborhood, but the new low down payment programs from Fannie Mae and Freddie Mac, plus the fact that some lenders are realizing that they overreacted to the housing crisis, mean that more first-time buyers should be able to find financing.”
The townhouse market in the region had an absorption rate of 34 percent in 2014, says David Howell, executive vice president and chief information officer at McEnearney Associates in McLean. Absorption rate refers to how quickly homes are selling in a specific area. Absorption rates above 20 percent usually indicate that supply is tight and that properties sell rapidly, giving sellers more control over the market.
“Absorption rates were highest for the handful of single-family homes priced under $300,000, but the real meat of the market in Northern Virginia, the price ranges with highest volume, are townhouses priced from $300,000 to $500,000 and single-family homes from $500,000 to $750,000,” Howell says.
In the District, Bethesda and Arlington, says Tom Anderson, president of Washington Fine Properties in the District, the condo market is “on fire.”
“People are willing to pay more money now for less space as long as a place is in good condition and is convenient,” Anderson says. “People want to walk places, and they want a turn-key, easy lifestyle so they can travel. It’s part of the instant gratification lifestyle in America.”
Anderson says that the high-end condo market has exploded in the past few years and that developers cannot keep up with demand, which is driving prices and sales volume higher.
“The high-end condo market is now the fastest-pushing market in the region, and I think it goes hand-in-hand with the vitality, growth and transformation of D.C. into an ‘it’ city,” Anderson says.
Although expensive condos dot the District and its close-in suburbs, there still are townhouses and condos available for first-time buyers.
“The most sales in Northern Virginia for condos and townhouses in 2014, especially condos, were in the under-$400,000 price range,” says Nina Chen Landes, an associate sales agent with Avery-Hess Realtors in Tysons Corner.
Ames says first-time buyers can find good deals on condos outside the Beltway or not within walking distance of a Metro station.
“You can find condos priced at $250,000 or $300,000 in Northern Virginia, but they tend to be older buildings, which are not likely to appreciate a lot in value and could have higher maintenance costs,” Ames says. “They can be a great value for a first-time buyer who wants to build equity by owning rather than renting for a few years, but if someone is looking for faster price appreciation it’s better to go with a newer building.”
In Prince George’s County, Michael Vaughn, an agent with Long & Foster Real Estate in Mitchellville, Md., says that competition is high among buyers looking for condos and townhouses in the $100,000 to $250,000 range.
“The sweet spot is to find a townhome or condo that costs the same or less than renting a similar place,” Vaughn says. “Buyers can find homes in this price range just east of the Beltway in Bowie and Upper Marlboro.”
Vaughn says buyers can find larger, more luxurious townhouses in Prince George’s if they can jump to the next price range, $250,000 to $425,000.
“There are fewer buyers in that price range, compared to the less-expensive homes, but enough that buyers should be ready for competition,” Vaughn says. “Some of the newer townhouses in planned communities like Beechtree, Oak Creek and Perrywood are especially popular with buyers.”
In the District, rowhouses are considered single-family homes since owners are not part of a homeowner’s association. In early February, there were approximately 200 condos and co-ops listed for sale in the city, mostly one-bedroom units, according to Rockville-based multiple-listing service MRIS.
Buyers looking for D.C. condos in the $400,000-to-$600,000 range face a tighter market, with only 124 listed for sale in February.
Ames says townhouses and condos in that range tend to sell very quickly, and draw multiple offers.
“If you’re looking in that price range, especially close to the city or a Metro station, you need to do your research so you know where you want to live and get a pre-approval from a lender because you should be ready to make an offer quickly if you see something you want,” Ames says.
Landes says there are fewer townhouses and condos for sale in Northern Virginia in the mid-range prices, compared with those that are priced higher or lower, which means that competition can be stiff.
In Prince George’s County, the market for townhouses and condos priced between $400,000 and $600,000 is equally tight, with 38 listings in early February, according to MRIS. In Montgomery County, there were 119 listings in this price range, while in the District there were 125.
Anderson says that in 2013 there were 21 condos sold in the region priced above $1 million; in 2014 there were 146 sold in that price range. Most of those expensive condos were in Bethesda, the District and Arlington.
“Inventory is so low that right now there are only 25 condos above $1 million being marketed in the city,” Anderson says. “Just as an example of the demand that’s out there, seven new condos at 1055 High in Georgetown were sold last year within a week, all with multiple offers and all priced over $2 million.”
Anderson says 32 condos priced above $2 million were sold in the District in 2014, but only 10 condos are on the market now in that price range.
“Condos in the $600,000-to-$1.5 million range are usually in a prime location near a Metro station and in excellent condition,” Ames says. “This market isn’t as competitive in Northern Virginia as the mid-range market because there are fewer buyers looking in that price range. However, Tysons Corner is an exception because now that Metro is there and the area is being redeveloped, prices have jumped up and more buyers are looking there.”
Howell says that the absorption rate for high-end condos in Northern Virginia — those priced between $750,000 and $1 million — was 23 percent in 2014, which is considered a sellers’ market.
“Townhouses in close-in locations in Arlington and Rosslyn sell for above $600,000 and sell quickly, especially if they’re in excellent condition,” Landes says.
Whether buyers or sellers will have the upper hand this spring in the townhouse and condo market depends more than ever on location and price range.
Michele Lerner is a freelance writer.