Sara Hines, senior research analyst, residential, JLL Mid-Atlantic Research
WASHINGTON, DC—A new report issued by brokerage firm JLL contends that the combination of low inventory and intense demand will cause condominium sales volume and prices to hit new records this year.
The report notes that condo supply hit its lowest level of the decade, ending mid-2018 with 1.91 months of supply on the market.
“Not only is supply shrinking, but it is flying off the shelf at a much faster rate and in different locations than historically accustomed to,” says report author Sara Hines, senior research analyst, residential, JLL Mid-Atlantic Research. “In the past five years, the average days on market has decreased 42%, down to 38 days. With supply limited in core markets, developers have leaped to the east and first-time homebuyers have followed suit. Markets that have attracted the most demand have been Rhode Island Avenue, Eckington and Brookland.”
Those emerging neighborhoods have experienced an 87% increase in average sales price since 2012 compared to a 38% jump in core neighborhoods, Hines notes. A total of 62% of the condos under construction in the city are located east of the Capitol, with the Ballpark, traditionally an apartment market in recent years, projected to see some of the highest condo growth levels over the next few years.
In respect to condominium pricing in the DC market, Hines states that since 2012 condo pricing has increased 24% with large gains occurring in the $600,000 and over market. Annual condo sales between $600,000 to $999,000 have climbed 187% and sales above $1 million have increased 164%. More affordable price points below $600,000, however, grew by just 16% during that period.
Hines believes the seller's market will continue in DC and remains on track to exceed 2017 levels and record its strongest year in more than a decade.
“As demand outpaces supply, leverage will continue favor sellers, driving pricing upward in the city across nearly every neighborhood,” she states. “Prospective homebuyers will have the option of paying up, staying in rental apartments or expanding their geographic focus to more emerging areas to the southeast and northeast or outside of the District altogether.”
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
