Mid-Year Report from Urban Pace also says region is introducing more first time buyer options
Sales of new construction condominium projects in the area’s urban markets were 30 percent higher in the first half of 2019 compared to the same time period last year, with 856 units sold over six months this year versus the 660 units sold during the first half of last year. According to the Mid-Year Condo Report from Urban Pace, an increased inventory of large-scale projects at the start of this year met with a positive market response and provided more options for first time homebuyers. Urban Pace is currently tracking a number of condo projects with more than 100 units in their 24 month pipeline and predicts that this is a trend that will continue over the next twelve months.
“After a major focus on multifamily development over the last several years, the market for new construction condos in the Washington region is strong and we expect it to get stronger. Especially in the most popular submarkets like the Capitol Riverfront, sales success and pricing of larger condo projects are combining to bolster developer confidence,” said Clint Mann, President of Urban Pace.
In the Capitol Riverfront, sales of new condos with prices ranging from the high $600s to low $800s per square foot averaged 8.3 sales per month in the first half of 2019, compared to the regional average of 2.9 per month. Jair Lynch Real Estate Partners’ eNvy condominium community, at more than $800 per square foot, outperformed the market with an average of 11 sales per month.
The increased activity in the condo market is providing a variety of options at more affordable price points. The report reveals that a disproportionate amount of luxury product that delivered in late 2018 and early 2019 has skewed available inventory toward larger units—45 percent of the settled units in the first six months of this year were two-bedroom units. But most condo transactions which had not yet settled during the same timeframe were for one-bedroom + den units and smaller in buildings still under construction.
Other key findings from the Mid-Year Condo Report include:
- Generating more options for first time homebuyers, the Washington region saw increased development in more transitional submarkets where new construction product was previously limited. This has led to higher quality affordable product at lower prices per square foot.
- The premium for new construction sales over comparable resales continues to grow. New construction sales in Petworth commanded a premium of 15 percent over resales built or renovated in the last 10 years, 22 percent in NoMa and 24 percent in the Capitol Riverfront. The Rosslyn-Ballston Corridor saw a 22 percent new construction premium in the first half. And in submarkets that previously saw no new construction for 10 years, new condos are commanding even higher premiums over resales–70 percent in Alexandria and 90 percent in Bethesda.
- Eight out of the top ten best performing condo submarkets in the region on a price per square foot basis were in Washington. The Woodley Park submarket with JBG Smith’s Wardman Tower project leads the region with new construction pricing at $1,235 per square foot. The Southwest Waterfront, fueled by The Wharf, was the third highest priced submarket.
- Pricing per square foot for new construction declined slightly in the first half of 2019 due to the record number of luxury settlements during the same time last year, and a resulting reduction in luxury inventory.
The Urban Pace Mid-Year Condo Report provides an in-depth look at the condominium market throughout the region. This report provides a thorough look at the market as we have pulled together and analyzed data from a variety of sources including tax records, Bright MLS, UPvelocity™ and other proprietary research sources.