The Washington metro area condominium market continues to encounter headwinds during the second 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 new condos is unchanged and resale condos is negative. Contract sales in the District were at the lowest single-quarter total since 2007 and sales activity in Suburban Maryland stalled. Northern Virginia maintained its market-leader status with most of the new condo development and sales activity and was the only substate area where sales increased from the first quarter. In addition, sales pace in the suburbs continues to outperform the District.
SECOND QUARTER 2023 HIGHLIGHTS
Sales:Metro-wide there were 233 new unit sales during the second quarter of 2023, which is down from the 379 new unit sales in the second quarter of 2022. Net sales over the past 12 months reached 1,069 units, which is down 40% from the prior 12-month period.
Prices:New sale prices remained unchanged over the 12-month period ending in June 2023metro-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 21% from 12 months prior while the total 36-month pipeline increased by 31% from a year ago. There are currently 19.9 months of inventory on the market, up 9.8 months from a year ago.
Starts:1,070 new condo units are expected to start construction in 2023, virtually unchanged from 2022.
Deliveries:1,534 new condo units are expected to deliver in 2023, down from 1,694 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.
