The Washington metro area condominium market continues to encounter headwinds during the third quarter of 2023. Economic insecurity due to high mortgage rates is taking its toll as sales remain below average and price growth for new condos is negative. Contract sales in the District were at the lowest single-quarter total last quarter since 2007, but slightly increased in the third quarter, and sales activity in Suburban Maryland stalled. Northern Virginia maintained its market-leader status with most of the new condo development and sales activity but was the only substate area where sales decreased from the second quarter. Still, sales pace in the suburbs continues to outperform the District.
third QUARTER 2023 HIGHLIGHTS
Sales:Metro-wide there were 224 new unit sales during the third quarter of 2023, which is down from the 327 new unit sales in the third quarter of 2022. Net sales over the past 12 months reached 962 units, which is down 43% from the prior 12-month period.
Prices:New sale prices decreased over the 12-month period ending in September 2023by 0.3% metro-wide.
Concessions: Average concession rates (as a percentage of asking price) are at 1.1% as of the third quarter of 2023, up 30 basis points from a year prior.
Pipeline:The number of available units actively marketing increased by 24% from 12 months prior while the total 36-month pipeline increased by 9% from a year ago. There are currently 22.0 months of inventory on the market, up 9.6 months from a year ago.
Starts:938 new condo units are expected to start construction in 2023, down over 150 units from 2022.
Deliveries:1,549 new condo units are expected to deliver in 2023, down from 1,658 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.