The Washington metro area condominium market continues to encounter headwinds during the first quarter of 2023. Economic insecurity due to high inflation and mortgage rates, along with fear of a recession are taking its toll as sales remain below average and price growth for both new and resale condos are negative. Contract sales in the District were at the lowest single-quarter total since the housing crisis in 2008, while Suburban Maryland rebounded after a dismal Q4. Northern Virginia maintained its market-leader status with most of the new condo development and sales activity, despite a slight decrease from the fourth quarter. Metro-wide average prices were down marginally compared to a year prior. In addition, sales pace in the suburbs has been outperforming the District, with the gap between the two areas increasing this quarter after some tightening in 2022.
FIRST QUARTER 2023 HIGHLIGHTS
Sales:Metro-wide there were 296 new unit sales during the first quarter of 2023, which is down from the 509 new unit sales in the first quarter of 2022. Net sales over the past 12 months reached 1,211 units, which is down by almost a third from the prior 12-month period.
Prices:New sale prices decreased over the 12-month period ending in March 2023 by 1.2% metro-wide.
Concessions: Average concession rates (as a percentage of asking price) are at 1.0% as of the first quarter of 2023, up 30 basis points from a year prior.
Pipeline:The number of available units actively marketing increased by 29% from 12 months prior while the total 36-month pipeline increased by a 25% from a year ago. There are currently 19.1 months of inventory on the market, up 9.6 months from a year ago.
Starts:1,250 new condo units are expected to start construction in 2023, up from 768 in 2022.
Deliveries:1,578 new condo units are expected to deliver in 2023, down from 1,674 in 2022.
Delta Associates, the research affiliate of Transwestern, is a firm of experienced professionals which has been providing consulting and subscription data services to the commercial real estate industry for over 40years.
