Limited Condo Supply Drives Prices Up
Rendering of the 71-unit Cheval condo project currently under construction in Bethesda, MD
Image Credit: McWilliams Ballard
As the Washington area new-condo market continues to be very supply-constrained, a strong spring selling season resulted in the best quarterly performance since the first quarter of 2013. In the second quarter of 2016 there were 589 sales, bringing sales over the last twelve months up to 1,629.
The limited supply has had a positive effect on pricing. The average price per square foot in the metro area increased by 4.7% over the last twelve months. Northern Virginia led the way with prices increasing by 7.1%. The District also showed positive growth of 2.7% while the prices in Maryland decreased by 5.4%.
Looking ahead, the shortage of new condo units will continue as the multifamily pipeline consists of mostly rental units. We expect only a slight increase in the number of deliveries of condo buildings for the remainder of 2016. Because of this, sales will increase slightly and prices should increase as well over the next 24 to 36 months.
Company