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WASHINGTON, DC—The peak building period typically starts in May. But as the cost of construction materials continues its sharp ascent, the Washington market is bracing for an impact. That's especially true as signs emerge that certain segments are already starting to slow.

Already the DC condo market is showing signs, if not of distress, then of declining growth, as prices have been flat since August 2005. "If you look at same store pricing, you can see that we are experiencing the same [condo] prices now as we did last summer," says Greg Leisch, chief executive of Delta Associates, a national consulting firm in Alexandria, VA.

Over the next six to 18 months, he says, there is a good chance prices are likely to decline. Leisch says the decline--if it happens--will be modest. Other Washington-area market observers, he points out, predict a far harsher drop of 20%. Rising construction costs, though, will have little to do with any decline, which he attributes to market supply and demand dynamics.