The Washington metro area condominium market continues to encounter headwinds during the fourth quarter of 2023. High mortgage rates and a lack of supply continue to take its toll as sales remain below average and price growth for new condos is negative. Contract sales in the District fell to their lowest level since 2007 in the fourth quarter. Northern Virginia maintained its market-leader status with most of the new sales, but activity remains well below previous quarters. Suburban Maryland had a rebound in new sales from the previous quarter, making the fourth quarter the second best of the year.
FOURTH QUARTER 2023 HIGHLIGHTS
Sales:Metro-wide there were 192 new unit sales during the fourth quarter of 2023, which is down from the 209 new unit sales in the fourth quarter of 2022. Net sales in 2023 reached 949 units, which is down 35% from 2022.
Prices:New sale prices decreasedin 2023by 0.4% metro-wide.
Concessions: Average concession rates (as a percentage of asking price) are at 1.2% as of the fourth quarter of 2023, up 10 basis points from a year prior.
Pipeline:The number of available units actively marketing increased by 6% from a year prior while the total 36-month pipeline increased by less than 1% from a year ago. There are currently 18.9 months of inventory on the market, up 4.7 months from a year ago.
Starts:1,308new condo units are expected to start construction in 2024, up over 500 units from 2023.
Deliveries:964 new condo units are expected to deliver in 2024, down from 1,494 in 2023.
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.