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WASHINGTON, DC-The District's usually stalwart low multifamily vacancy rate--an enviable 2% or so--may find itself on the rise thanks to the ending of a robust run in the condo market, predicts Matthew A. Texler, VP of Meridian Capital Group's Bethesda, MD office. This being DC, however, it may well be that the worse case scenario--a vacancy rate of 5% or 6%--does not materialize. "DC has always been very strong with jobs and other demographics," he tells GlobeSt.com.

"What we are hoping is that the local reports that are projecting sustained job growth and a continued population influx into the DC metro area should have a mitigating affect on a downturn in this sector." The impetus of the coming crunch are the 3,000 or so new units expected to deliver in the DC area in the mid term, he says. "Just driving up Massachusetts Avenue, you can see how many new condos have been under development, that started in 2004 or 2005." Few, if any of these, had any sales requirements--only completion requirements--attached to the debt. At the same time, of course, there is the credit crunch that has affected almost every city including tier one municipalities like the District.

"On a macro level you can see how the situation may develop: there is an enormous supply of condo units done by developers, many of which were first time projects," he says. "Some of these firms have deep pockets and should be able to weather the storm--they can write a check to keep debt service going--but others will be heading to foreclosure."