The Greater Capital Area Association of Realtors has
released the most recent market report for condominiums and cooperatives in DC
and it shows the market is very strong. (Click here for the report.) The
inventory is severely down, the contracts taken are way up.
The market for condos and co-ops has clearly shifted to a
seller’s market. The inventory of available condos and co-ops is down 33.1%
year over year (857 vs. 1,281) and demand is up with an increase in contracts
taken of 16.7% (1,452 vs. 1,244).
Supply Side
The drop in inventory is particularly striking when looking at historic trends. For the past seven years inventory of available condos and co-ops builds an average of 33.7% between December and May. From there it drops until September when it builds again for the autumn market. However, this year the increase has only been 13.5%. This indicates that there will be a continued shortage of available condos and co-ops throughout the summer.
The drop in inventory is particularly striking when looking at historic trends. For the past seven years inventory of available condos and co-ops builds an average of 33.7% between December and May. From there it drops until September when it builds again for the autumn market. However, this year the increase has only been 13.5%. This indicates that there will be a continued shortage of available condos and co-ops throughout the summer.
The only indication of a slowdown on the supply side is that
the inventory of new condos coming on the market increased by 3.4% year over
year in May (429 vs. 415).
Demand Side
The number of contracts accepted in May was up 6.9% year over year (324 vs. 303). Here again, this is a strong number, but it’s not as strong as the rest of the spring has been. Also, May is typically a stronger month for contracts than April is and this year contracts were down from April to May, which is an indication of a strong market, but not one that’s continuing to tighten dramatically.
The number of contracts accepted in May was up 6.9% year over year (324 vs. 303). Here again, this is a strong number, but it’s not as strong as the rest of the spring has been. Also, May is typically a stronger month for contracts than April is and this year contracts were down from April to May, which is an indication of a strong market, but not one that’s continuing to tighten dramatically.
Stand Out Performance
Out of the entire market for condos and co-ops in DC, the price bracket between $500,000-$600,000 has been the strongest. The number of available properties has dropped 39.3% year over year (71 vs. 117) and the number of contracts for these properties has jumped 44.9% year over year (171 vs. 118).
Out of the entire market for condos and co-ops in DC, the price bracket between $500,000-$600,000 has been the strongest. The number of available properties has dropped 39.3% year over year (71 vs. 117) and the number of contracts for these properties has jumped 44.9% year over year (171 vs. 118).
The Bottom Line
The market is clearly on the seller’s side. As a buyer it’s critical that you bring a strong offer and be prepared for multiple offers on a home. We’re still not seeing large price increases, but escalation clauses are de rigeur now. If you are a seller and you are not getting an offer within a week your home is either not being marketed correctly or is priced too high.
The market is clearly on the seller’s side. As a buyer it’s critical that you bring a strong offer and be prepared for multiple offers on a home. We’re still not seeing large price increases, but escalation clauses are de rigeur now. If you are a seller and you are not getting an offer within a week your home is either not being marketed correctly or is priced too high.
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