Though condo sales have fallen somewhat in Washington, DC during the past year, they haven’t shown signs of a significant decline. In fact, the latest report from commercial real estate research company, Delta Associates. is showing that the market is still strong overall. And, most interestingly for real estate investors, certain DC neighborhoods are showing promise and profitability, especially in the Capitol East submarket. So let’s take a look at the facts and figures in order to properly understand what can be expected in the DC condo market in the near future.
DC Condos: Earlier in 2018
It was reported earlier that, in the second quarter of 2018, slightly fewer new condo units had sold (414) then the first quarter (432). Even though that was the case, the market was moving forward and a decent clip, and sales prices were up 1.1 percent throughout the region.
At the time, it was Northern Virginia leading the region with 207 sales. But, even then, the Capitol East submarket was experiencing enviable sales — 56 percent of all second-quarter new condo sales in Washington, DC proper were taking place in Capitol East, which is comprised of Capitol Hill, Capitol Riverfront, Hill East, NoMa, Southwest Waterfront and everything east of the Anacostia River. In total, 70 new units were sold in this area during the second quarter.
At the time, a Delta Associates report stated “The region’s condo market is projected to be in balance over the next 36 months.” It went on to clarify, “however, market conditions vary significantly between submarkets.” This turned out to be an accurate foresight.
DC Condos: 2018 Third Quarter
Now that the third quarter is behind us, new reports show that the Washington, DC condo market is still holding firm. While sales of new condo units dropped by 78 from the previous quarter, it was DC proper with the strongest sales: 134 units were sold within its borders.
And, as it was in the previous quarter, the submarket of Capitol East was where the condo market really shined, taking in 64 percent of new condo sales in the district with a total of 86. It should also be noted that the price growth for new condos in the area were stronger than any other submarket area in the DC metro area — prices are rising 4.3 percent year-over-year.
The other DC submarkets tended to show a flat or negative growth price, with an average of 1.1 percent increase across the city. Northern Virginia also saw prices for new condos rise by 3.3 percent. Addressing the decrease of units under construction or marketing, Delta Associates stated “the 36-month pipeline increased from 5,778 units (before attrition) to 6,170 over the past year.” They went on to say that they “expect more of the same in terms of moderate sales growth for the period ahead, although some tightening in some submarkets could lead to more robust price growth.”
Why is the Condo Market in Capitol East Doing so Well?
So what is it about Capitol East that has caused its condo market to do so well while the surrounding areas are only staying relatively even with their previous condo sales? In short, each of the neighborhoods within its borders has a lot to offer residents.
Residents of Capitol Hill, for example, are enamored with the area’ 19th century rowhouses, not to mention a fantastic restaurant scene and a bustling nightlife. And its location doesn’t hurt, either; in this neighborhood, you’ll find the U.S. Capitol, the Supreme Court and the Library of Congress.
Then there’s Capitol Riverfront. Located along the Anacostia River and immediately south of the U.S. Capitol, this vibrant neighborhood has a lot going for it. It’s the home of the MLB’s Washington Nationals, as well as the U.S. Navy museum. It’s also a great place for people who enjoy the outdoors, with kayaking, a free outdoor concert series and a seasonal ice rink in Canal Park.
Hill East is one of DC’s lesser known neighborhoods, but not for long. To the east of Capitol Hill (hence its name), this area boasts the Hill East Waterfront, a major renovation project comprised of 67 acres between the eastern side of Capitol Hill and the western shore of the Anacostia. This mixed-use community provides the neighborhood with tree-lined streets, recreational trails and accessible waterfront parklands.
It’s no surprise that NoMa is doing so well. This up-and-coming neighborhood is packed with trendy restaurants and is home to Union Market, a specialty food hall and grocery that is the heart of DC’s foodie scene. This neighborhood is also where you’ll find a variety of creative business such as an Angelika movie theater and the Dolcezza Gelato & Coffee Factory and Masseria.
Filling out the Capitol East area is Southwest Waterfront, a great place for exploring the local arts scene — not to mention grabbing a fantastic meal. It is also has easy access to Washington DC’s famed monuments and memorials. Residents and visitors are also flocking to The Wharf, a new waterfront dining and entertainment district packed with fun things to do.
DC Condos: A Steady Investment with Major Potential
For real estate investors looking to get into condos, the overall take is that the condo market in Washington, DC continues to be strong. Most areas are seeing slight growth, but when you look to the Capitol East area of town, that where big things are happening. So get out there, do your homework, and find the right investment for you.