Condo Report | First Quarter 2017

FIRST QUARTER 2017

CONDO REPORT

A Co m p r e h e ns ive A n al ysi s of the Re si d e n ti al Re al Estate M ar ke t in th e Washi n g ton M e tr opol i tan Ar e a

1201 NASH ST 205 ARLINGTON, VA | $649,500

REGIONAL CONDOMINIUM MARKET OVERVIEW Although the Washington condo market continues to be supply-constrained, the introduction of larger condo projects in the past several months contributed to the best first quarter annual sales performance since 2013.

A total of 131 new condominium contract sales occurred in the District during the first quarter of 2017 and 618 for the 12 months ending in March 2017 – an increase of 13.6% from the previous year. Capitol Hill/ Riverfront/ SW, Columbia Heights/ Shaw, and Central DC submarkets led the District in sales activity in the last 12 months. In the close-in suburbs of Northern Virginia, Arlington and Alexandria both had negative net sales throughout the first quarter. However, Alexandria had 60 sales in the past year, followed by Arlington with 28 sales. No new condo projects have been available to purchase in Tysons over the past few years, but there are projects about to start selling and in the development pipeline. In Bethesda, there were 15 contract sales in the first quarter and 58 sales for the year.

Average effective prices of new condominiums in the District remained the same for the 12 months ending in March 2017 with an average price of $725/SF in the first quarter of 2017. Prices increased or remained the same in all but one District submarket – Central prices decreased by 3.0%. Meanwhile, prices in Arlington and Alexandria did not change over the year, while prices in Bethesda rose by 7.5%.

A total of 1,131 units are currently marketing or under construction in the District, led by Capitol Hill/ Riverfront/ SW and NoMa/ H Street submarkets. Nearly half of the units in the District’s 36-month development pipeline are located in the Capitol Hill/ Riverfront/ SW submarket. There are currently 294 units actively marketing or under construction in the close-in suburban submarkets in Northern Virginia and 117 units in Bethesda. Over the next 36 months, 413 units are planned in Northern Virginia and 90 units in Bethesda.

Condominium resale activity in Northern Virginia and Bethesda increased over the past year, while it fell in the District by 0.8%. The average days on the market averaged 35 days in the District during the first quarter. Market conditions were tightest in Northeast at an average of 25 days while the average condo took 53 days to sell in Upper Northwest. Average days on the market ranged in the close-in suburbs from 42 days in Alexandria to 64 days in Tysons.

A shortage of new condo units persists in the market. Conversions are not likely to play a significant role in this cycle as they did in the last, especially in suburban jurisdictions. Unlike the previous cycle when many apartment projects converted to condos or “switched” midway through construction to become condos to meet demand, the inventory of apartment product this time around is ill-suited for conversion because of location or project scale – most sponsors and capital sources do not have the appetite to work through such large and extended sell-out programs. It will take longer to replenish the condo supply in this cycle since it takes more time for new construction or older building renovation/ conversion compared to newer building conversions or pipeline “switches”.

M A R K E T S P O T L I G H T : A R L I N G TO N Arlington is one of Northern Virginia’s primary submarkets for new development. With close proximity to the District, Arlington offers various transport amenities including plenty of Metro stations as well as Ronald Reagan Washington National Airport. Arlington also serves as a prime location for many businesses and it will soon become home to Nestlé’s U.S. corporate headquarters in Rosslyn – previously located in California. Arlington’s central location, access to transit, and growing retail sector continue to attract an influx of new residents and businesses.

$649 AVERAGE PRICE PER SQUARE FOOT - NEW CONDO UNIT SALES, ARLINGTON

Major condominium developments coming to Arlington include an 87-unit development planned at 2000 Clarendon Boulevard. This high-rise project by Bush Construction is expected to have retail and underground parking. In addition, a four-story mixed-use development along Columbia Pike in South Arlington by Pillars Development Group is under development. This 38,000-square-foot project is slated to include 78 residential units, ground-floor retail, and underground parking as well.

Currently, 142 market-rate condominium units are under construction in the Arlington submarket. Another 161 units are estimated to deliver in this submarket over the next 36 months. Prices averaged $649/SF in the Arlington submarket in the first quarter of 2017 – well-above Northern Virginia’s average of $438/SF. The condo resale market in Arlington remains robust. In March 2017, the median sold price was $366,900, and the number of Active listings increased to 242. The number of closed sales increased 36.2% as compared to March, 2016.

Listings are requiring slightly longer to sell, with average days on market increasing to 57 versus a 5-year average of 46 days.

With our newest brokerage located at 2300 Clarendon Boulevard in the heart of Arlington, TTR Sotheby’s International Realty is well positioned to advise our clients regarding the sale or purchase of a condominium or coop in Arlington, as well as across the Washington metropolitan area. For more information on our current offerings in Arlington and worldwide, we invite you to visit us at ttrsir.com.

Best personal regards, Mark C. Lowham CEO and Managing Partner

CONDOMINIUM RESALE VOLUME # of Units

1,400

1,200

1,000

800

600

400

200

0

Columbia Heights/ Shaw Upper NW

DISTRICT OF COLUMBIA

Central

12 Months Ending March 2017 MRIS, Delta Associates, April 2017

NOMA/H St Cap Hill/Riv/SW Upper GA Ave NE DC River East

DC Arlington

SUBMARKETS

Alexandria

12 Months Ending March 2017 MRIS, Delta Associates, April 2017

Bethesda Tysons Corner

# of Units

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

OU R OFFICES GEORGETOWN BROKERAGE 1206 30th Street NW Washington, DC 20007 DOWNTOWN BROKERAGE 1515 14th Street NW Washington, DC 20005

1506 14th Street NW Washington, DC 20005 ttrsir.com

McLEAN BROKERAGE 6723 Whittier Avenue McLean, VA 22101 ALEXANDRIA BROKERAGE 400 S Washington Street Alexandria, VA 22314 ARLINGTON BROKERAGE 2300 Clarendon Blvd Arlington, VA CHEVY CHASE BROKERAGE 5454 Wisconsin Avenue Chevy Chase, MD ANNAPOLIS BROKERAGE 209 Main Street Annapolis, MD

F E AT U R E D U N I T S

3303 Water St NW 3H Georgetown $2,895,000 Ritzert Weiss Partners +1 202 333 1212

1881 Nash St TS01 Arlington $6,999,999 Sherif Abdalla +1 703 624 5555 Ron Mangas Jr. +1 703 298 2564

5600 Wisconsin Ave Chevy Chase $3,495,000 Marc Fleisher +1 202 438 4880

2125 14th St NW 806 U Street Corridor $1,575,000 Joseph Poduslo +1 202 487 6225 Jeff Lockard +1 202 246 4433

This material is based upon information that we consider reliable, but because it has been supplied by third parties, we cannot represent that it is accurate or complete, and it should not be relied upon as such. This offering is subject to errors, omissions, changes, including price, or withdrawal without notice. ©2017 Sotheby’s International Realty Affiliates LLC. All Rights Reserved. Sotheby’s International Realty® is a licensed trademark to Sotheby’s International Realty Affiliates LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each Office Is Independently Owned And Operated. SIR1