The fourth quarter of 2020 brought a continued shift in new condo sales activity away from the District and towards the suburbs. Despite the shift, sales in the fourth quarter were the strongest they have been all year and activity in 2020 was up 3% from 2019. By substate area, sales in Suburban Maryland and Northern Virginia are up from 2019 by 23% and 14%, respectively, while in the District, activity is down 25%. Prices are up metro-wide, although performance is uneven by submarket and substate area. Meanwhile, the number of available units in the metro area increased from last quarter and is now at its highest level since 2011.
FOURTH QUARTER 2020 HIGHLIGHTS
Sales: Metro-wide there were 468 new unit sales during the fourth quarter of 2020, which is 60% more than the number of units sold during the third quarter. Net sales in 2020 reached 1,652 units, which is up 3% from 2019.
Prices: New sale prices increased in 2020 by 2.4% metro-wide.
Concessions: Average concession rates (as a percentage of asking price) are at 0.3% as of the fourth quarter of 2020, down 40 basis points from a year prior.
Pipeline: Unsold units in projects currently marketing or under construction (and not yet marketing) number 3,407 units as of December 2020, significantly lower than a year ago.Currently, the submarkets with the largest available inventory are Capitol East DC (774 units), Fairfax/Falls Church (687 units), and Loudoun/Prince William (552 units).
Starts: A total of 940 units are expected to start construction in 2021, which isbelow the 1,165 units that broke ground in 2020. Starts will be evenly spread out between the District and Northern Virginia with 400 units each, followed by Suburban Maryland with the remaining 100 units.
Deliveries: We expect the number of condo deliveries in 2021 to decrease from 2020 (when 1,969 units delivered) to 1,365 units (excluding potential condo switches).
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 35years.
