The number of new condos sold in the D.C. area fell more than 50 percent over the past year, but prices for those condos held steady in part because of a dwindling inventory of units for sale, according to data from local real estate research and consulting firm Delta Associates.
Between September 2006 and September of this year, 4,337 new condo units were sold in the area. From September 2005 to September 2006, 9,486 were units sold, Delta Associates’ numbers show.
The average price for a new condo in the metro area, however, has remained virtually unchanged since last year, rising 2 percent in the District and dropping 2.5 percent in the suburbs for a combined drop of 0.3 percent.
“The number of new condos actively marketing has come down dramatically in the last 12 months, and that’s why prices for new condos are not down — they’re holding steady,” said Greg Leisch, CEO of Delta Associates.
This time last year, there were almost 25,000 new condos on the market and another 25,000 units planned for development. Today, roughly 19,000 new condos are available for sale, and 16,000 are planned.
Leisch said that 120 D.C.-area condo projects, comprising more than 20,000 units, have been canceled over the past 15 months as developers elect to turn many planned condos into rental units instead.
“Certainly in the single-family home market, you see a lot of concessions and price reductions,” said John McClain of the George Mason Center for Regional Analysis. “We’re probably going to need to see that in the condo market before it’s going to start to [improve].”
Condo resales are slow this year as well, dropping to about 1,400 sales a month from the 2006 rate of 1,500 a month, though resale prices have actually jumped by more than 4 percent in the metro area, according to Leisch.
“The evidence is the traffic is back — the credit crunch seems to be having much more of an impact on the single-family home market,” Leisch said. “Condos are a less costly alternative. Those who buy tend not to have a house to sell, so you don’t have the double whammy.”
