2020 YEAR END CONDOMINIUM REPORT WASHINGTON, DC URBAN MARKETS
EagleBank is proud to sponsor the 2020 Year End Condominium Report from Urban Pace, our partner in Washington, DC Real Estate. EagleBank continues to be highly ranked among its peers for performance and growth. In 2020, we responded to the challenges of COVID-19 with characteristic agility, taking necessary measures to adapt quickly to changing market forces and help our customers through various challenges with creative solutions. EagleBank has an extensive track record working with builders and developers on local Commercial Real Estate projects, big and small. In conjunction with that achievement, EagleBank’s Residential Lending team offers competitive loan products and services, as well as longterm locks and other specialty loans that answer all buyers’ needs. Our comprehensive banking services offer the best options for all — from the builders and developers, the sales force, and the buyer. An EagleBank relationship brings value and efficiency to all development projects from the start of the project to final sale. We are proud to serve the Washington, DC area through our collective strength, resiliency, and dedication to our clients and community.
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TABLE OF CONTENTS EXECUTIVE SUMMARY 02 DMV MARKET OVERVIEW AMIDST COVID-19 04 PRIME URBAN CONDO MARKETS OVERVIEW 14 CAPITOL HILL 23 NAVY YARD 27 N oM a 31 SHAW 35 BETHESDA 39 ALEXANDRIA 43 TYSONS/MCLEAN 47 URBAN PACE 2021 OUTLOOK 50
EXECUTIVE SUMMARY Urban Pace is pleased to present the 2020 Year End Condominium Report for the urban markets in the Washington, DC region. 2020 was a year of unprecedented circumstances, so we examined the market from as many perspectives as possible. This report provides an overview of all activity in the DMV for condominiums, townhomes and single-family homes, followed by a more focused review of the most active new construction condominium submarkets in 2020. The first section of charts that follows covers the activity in the DMV region with separate focuses on Washington, DC, Maryland and Virginia. These charts detail volume and pricing data for all product types. To better understand the dynamic effects of COVID-19, our team used written contract data from Bright MLS to provide a year-over-year comparison of monthly trends. Additionally, we used an augmented data set at the end of this section to best capture the volume of contracts written for new construction condos. The second section of charts in this report follows our typical approach to the new construction condominium market in the DC area. This is a summary of data points for the most active urban submarkets in the region including Bethesda, the City of Alexandria, the Rosslyn-Ballston Corridor, Tysons/McLean, and the District of Columbia. As with previous reports, this section on prime submarkets uses settled sales data. Given the dynamic nature of the market in 2020, we also look at new construction sales data for contracts written in 2020, independent of their closing dates. The Class A rental market is addressed in this section as well. At the start of 2020, the DC area’s real estate market fundamentals were strong—demand exceeded supply, the unemployment rate was at 3.5%, and interest rates were at historic lows. These factors created a competitive sales environment in which home prices continued to rise and days on market steadily decreased. The first significant effects of the coronavirus were seen in March, following the first public announcements of business restrictions and social distancing guidelines. Buyers and sellers alike withdrew from the market, uncertain of the full effects of the virus on property values and the economy at large. Sales and listings dropped steadily until reaching about half of 2019 totals in April, though prices for the sales that did occur only dropped slightly, from the record levels of the beginning of the year back down in line with 2019 figures. After this initial hesitancy, buyers and sellers showed a renewed confidence in the market. Listings and sales began a consistent climb week after week until they surpassed 2019 averages in early summer. Strong activity continued for the rest of the year, with the majority of activity shifting to the summer months from the typically dynamic spring market in the region. Late summer was the peak of activity and the final months of the year saw an unprecedented number of transactions. At the close of 2020, the DC area’s residential real estate market had posted more sales and higher prices, on both a total and per-square-foot basis, than 2019. These strong sales figures were consistent across the various subsections of product types, submarkets, and densities in the DC metro area. Some analysts have noted increased sales activity in suburban areas and dropping rents in urban centers and interpreted this as an indication that consumers were becoming disenchanted with city living and shifting their preferences to the suburbs. However, our 2020 sales data firmly refutes this notion in Washington, DC. All product types (condominiums, townhomes, and single-family homes) had increased sale prices, price-per-square-foot valuations, and transactions in 2020. Our database of regional sales information shows that the District increased its residential sales volume by 7.5%, compared to 5.0% in Maryland and 5.1% in Virginia. Price increases were slightly greater in Maryland and Virginia, though DC’s smaller growth was limited by record high prices combined with a growing supply of newer resale product that is a viable alternative to new construction. With an especially resilient local economy driven by federal government jobs, a technology workforce that is growing with new employers like Amazon, and a supply pipeline that continues to lag behind demand, DC’s housing market fundamentals should remain strong for the foreseeable future.
02
2020 TAKEAWAYS
• Washington, DC was still in demand • Mortgage rates hovered at historic lows • COVID-19 accelerated real estate decisions • Condominium sales remained steady • Existing inventory was most desirable
03
DMV MARKET OVERVIEW AMIDST COVID-19
Like much of the real estate community, Urban Pace started 2020 with an optimistic outlook on the overall market in the Washington, DC region. Once the reality of COVID-19 hit the United States in mid-March, Urban Pace quickly shifted gears to a remote work environment for our staff and sales professionals in an abundance of caution for health and safety. In addition to implementing creative sales and marketing strategies on various virtual platforms, Urban Pace initially began tracking data on a weekly basis for all residential sales in the DMV including condos, townhomes and single-family homes to analyze how all these product types were being affected by the pandemic. We chose to focus on MLS statistics to provide a larger and more consistent sample size on contracts written rather than closed data for this section of the report. This helps provide a more accurate snapshot of activity in an ever-changing market. We track this data on a year-over-year basis in the following charts and graphs. 04
The work from home scenario became the norm for many, so there was a major focus on living environments and many people started to reevaluate their homes. There was a newfound need to juggle personal space, storage space, home offices, kids attending school remotely, etc. In the midst of this, interest rates hit historic lows in 2020 and dipped below 3% in July. They stayed in the high 2% range for the remainder of the year and closed out December at 2.66%. After the initial dip in sales activity in late March and April, the market slowly started to recover with a total of 5.8% more contracts written year-over-year. The typically strong spring market shifted into the summer months showing an increase in activity on all product types including year-over-year increases in July of 14.8% for condos, 18.4% for townhomes, and 16.7% for single-family homes.
At this point, many consumers were looking for their version of “more” whether that was more space inside with another bedroom or den, outside with a balcony or yard, or even a second home in another location for a safe getaway. The summer’s increased activity was due to some initial signs of recovery and many of the restrictions for restaurants and retail slowly lifting. This strong sales activity remained until there was a slight dip at the end of the summer, but in the fall, sales volumes increased again with pent-up demand across all product types. In November and December, there was a significant decrease in sales activity compared to the summer months, but these months in 2020 ended stronger than 2019 with 34.2% and 58.5% increases in condo sales alone in November and December.
Townhomes and single-family homes also saw monthly decreases from the summer, but this was caused by limited inventory available in the market for this home type after a wildly competitive summer. Strong competition drove average sales prices up 8% and 13% for townhomes and single-family homes in November and December.
Note: The following charts reflect data that was pulled for all sales based on contract dates in Bright MLS from the 2019 compared and 2020 for closed, pending and under contract listings. The charts referencing DC include sales from Washington, DC. The charts referencing MD include Montgomery and Prince George’s counties. The charts referencing VA include Arlington, Alexandria, Fairfax and Loudoun counties. Any charts referencing the DMV include all counties mentioned previously in DC, MD and VA.
05
DMV SALES VOLUME Year-over-year sales volume in the DMV increased by over 3,400 homes accounting for a 5.8% increase for the metro area. Specifically, by product type, condo sales increased by 6.7%, townhomes increased by 6.7% and single-family homes increased by 4.8%. On a monthly basis through 2020, January and February started off with higher year-over-year sales volume until the lockdowns began in March due to COVID-19. The pandemic caused a formidable scare for the regional housing market from March through June creating a muted spring market when compared to the typical season. Market anxiety began to fade in the month of July with increases in sales across all home types. August was the strongest month of sales with 6,470 contracts written, a tremendous increase of 1,672 contracts from the previous August which posted 4,798. Overall, it was a volatile year for home sales with the first initial decrease amidst pandemic fears, and then a delayed spring market leading to a boom in summer sales thanks to high buyer demand and low interest rates. DC/MD/VA - YOY SALES VOLUME - 2019 VS. 2020 7,400
SALES VOLUME
6,400 5,400
DMV AVERAGE SALES PRICE
4,400
The average sales price across the DMV followed a similar trend to sales volume with a 7.8% year-over-year increase, even with pandemic lockdowns negatively impacting pricing in March and April. Specifically by product type, condo average sales prices increased the most by 14%, townhomes increased by 7.1% and single-family homes increased by 9.7%. Average price points recovered faster than sales activity because interest rates decreased rapidly for almost an entire year. Townhomes and single-family homes achieved their highest average price in June reaching $581,779 and $790,907 respectively, with condos reaching their highest average price in February at $419,417. Townhome and single-family product pricing recovered faster than condos due to the strong demand for larger homes. A large amount of these listings had multiple offers and sold above original prices. This is not to say that condos and more urban settings were no longer desirable, they just experienced a slower recovery in average pricing. In December, a month where condo buyers are normally looking to find discounts, average prices soared to $419,000 which essentially matched prepandemic levels of February 2020 at $419,417 as stated previously.
3,400 2,400 1,400 400
2019 JAN FEB MAR APR MAY JUN
2020
JUL AUG SEP OCT NOV DEC
MONTH SOLD
DC/MD/VA - YOY AVG SALE PRICING - 2019 VS. 2020
AVG SALES PRICE (000s)
$650 $625 $600 $575 $550 $525 $500
2019 JAN FEB MAR APR MAY JUN
JUL AUG SEP OCT NOV DEC
MONTH SOLD 06
2020
DC SALES VOLUME The narrative that buyers are leaving urban markets for the suburbs is disproven by the year-over-year increase in DC sales activity of 7.5%. This is positive news for the metro area real estate community since DC is the central economic hub for work professionals, government, and tourism/entertainment. Condo sales led the charge with a year-over-year increase of 12.6%, townhomes following with a 5.2% increase and single-family homes remaining neutral at a decrease of 0.2%. On a monthly basis, 2019 sales outperformed 2020 from March through May, but June flipped sales activity for the remainder of the year. The best month of sales occurred in August with a 27.1% increase in sales across all product types. DC - YOY SALES VOLUME 1,200
800 600 400 200 0
2019 JAN FEB MAR APR MAY JUN
2020
JUL AUG SEP OCT NOV DEC
MONTH SOLD
DC AVERAGE SALES PRICE Average sales price in DC increased by 6.2% from $723,918 to $768,659 year-over-year. Specifically by product type, condo prices increased 3%, townhomes by 8.8% and single family homes by 11.1%. In 2020, DC faced an initial price drop for all product types in March and April with a major rebound in June, eclipsing the $768,659 year-over-year average with an average of $825,000 for the month. The ongoing trend across the DMV was an increase in average sales prices paired with the decrease in interest rates this year, and DC followed this trend similarly. All product types experienced their highest average sales prices when interest rates were their lowest in Q4 2020. Condominiums reached their peak at $581,530 in October, townhomes at $935,503 in November and eventually single-family homes reached just over $1.38 million in December. DC - YOY AVG SALE PRICE $850
AVG SALES PRICE (000s)
SALES VOLUME
1,000
$800 $750 $700 $650 $600
2019 JAN FEB MAR APR MAY JUN
2020
JUL AUG SEP OCT NOV DEC
MONTH SOLD 07
MD AVERAGE SALES PRICE Average sales prices in Maryland increased by 7.1% from $461,076 to $493,750 year-over-year. Specifically by product type, condo prices decreased by 2.6%, townhomes increased by 5.3% and single-family homes increased by 9.4%. The Maryland condo market surrounding DC experienced more difficulty through the pandemic than DC and Virginia. This occurred because submarkets with heavy condo product like Bethesda, Silver Spring and Rockville have alternative townhome and single-family product with desirable sizes and price points to buyers. The luxury condo market especially struggled because luxury buyers can afford these residences and could pay similar prices for larger product. There was not as much need to be near a metro line or in an urban setting with the pandemic continuing through the entire year. Overall, Maryland had a strong recovery, but larger product type was in higher demand which accounted for higher gains in fee simple product versus condominiums. MD - YOY AVG SALE PRICE
AVG SALES PRICE (000s)
$550
MD SALES VOLUME Maryland experienced increased sales activity across all product types after the initial dip in volume from the pandemic. Condo sales increased year-over-year by 8.7%, townhomes by 6.9% and single-family homes by 3.3%. On a monthly basis, all product types followed similar trends with decreases in sales from March to June and a swift recovery in July until the end of the year. The month of October saw the largest number of contracts written with a total of 2,328 which was almost a 22% increase from the previous year. Sales activity did fall off swiftly in November and December posting on average a 20% decrease month-over-month from October highs. Overall, the Maryland counties surrounding DC performed well and showed a positive recovery from a poor spring market. MD - YOY SALES VOLUME 3,000
SALES VOLUME
2,500 2,000 1,500 1,000 500 0
2019 JAN FEB MAR APR MAY JUN
JUL AUG SEP OCT NOV DEC
MONTH SOLD 08
2020
$525 $500 $475 $450 $425 $400
2019 JAN FEB MAR APR MAY JUN
2020
JUL AUG SEP OCT NOV DEC
MONTH SOLD
VA AVERAGE SALES PRICE Virginia experienced a major boom in pricing this year even in the lockdown months. Virginia posted a total increase in average sales price of 8.6% from $600,625 to $652,515. Condos increased by 4.2%, townhomes by 7.3% and single-family homes by 9.4%. The majority of this Virginia metro area sample set is townhome and single-family home sales. However, condominium sales posted very strong numbers with year-over-year increases in price in every month of 2020 except for November and December. Average sales prices only dipped from February to March and began a substantial upward trend due to high demand and more buyers migrating to Virginia from more urban locations. Large residential sizing, desirable cities, and low inventory have all played major factors in the success that Virginia saw in 2020 amidst a global pandemic. VA - YOY AVG SALE PRICE
AVG SALES PRICE (000s)
$675
VA SALES VOLUME Virginia experienced a similar increase and recovery to Maryland for sales volumes in 2020. Condo sales increased year-over-year by 1.9%, townhomes by 7.2% and single-family homes by 6.8%. On a monthly basis, all product types followed similar trends with decreases in sales from March to June and a speedy recovery in July. However, post-July, sales have decreased to close out the year. This occurred because demand was so high for housing in Virginia that price points skyrocketed. The difference between Virginia and DC/ Maryland is that Virginia offers more “suburban urban” communities that have access to cities and metro stations. These cities include Arlington, Alexandria, Tysons and even Fairfax to name a few. This combination of cities and larger sized product has made Virginia a desirable location and drove prices higher, and inventory lower. Lastly, post-pandemic Virginia has the fundamentals to continue higher sales activity into future years with more investment in National Landing in Arlington, as well as the soon to open Phase II of the Silver Line which will extend metro service all the way to Ashburn. VA - YOY SALES VOLUME
$650 $625 $600 $575 $550
2019 JAN FEB MAR APR MAY JUN
2020
JUL AUG SEP OCT NOV DEC
MONTH SOLD
3,500
SALES VOLUME
3,000 2,500 2,000 1,500 1,000 500 0
2019 JAN FEB MAR APR MAY JUN
2020
JUL AUG SEP OCT NOV DEC
MONTH SOLD 09
DMV REGIONAL STATISTICS There has been an increase in all counties for both sales volume and average sales price. The overall volume increased 5.8% for the entire region from 59,302 to 62,746 sales. The county with the largest increase is Alexandria at 12%, followed by Loudoun at 8.4% and then DC at 7.5% The average sales price per county also showed an uptick from $567,124 - $611,509 for a 7.8% increase for the region. Loudoun County increased the most at 9.8% with Alexandria being right behind it at 9.7% and Fairfax County rounding out the top three at 8.6%.
DMV SALES VOLUME BY PRODUCT TYPE These graph and stat boxes show the year-over-year percent change in sales volume for all DMV counties included in this study. It shows a major dip in March and April and begins to recover in May, until it skyrockets in the summer months due to low interest rates. The stat boxes show the total increase in sales volume by product type which is up in all categories.
2019 – 2020 PERCENTAGE CHANGE
Condo
YOY % CHANGE
50%
30%
6.7%
10%
Single Family Home
-10%
4.8%
-30%
Townhome/ Rowhome
-50%
CONDO JAN
FEB
MAR
APR
MAY
JUN
SFH JUL
TH/ROWHOME AUG
SEP
OCT
NOV
DEC
6.7%
DMV AVERAGE SALES PRICE BY PRODUCT TYPE These graph and stat boxes show average sales price. They show the same trend with major dips when lockdowns started in March and April, then a major recovery in price due to low interest rates. Condos still performed well even though there was a drastic dip in price over the last two months of 2020.
2019 – 2020 PERCENTAGE CHANGE
20%
Condo
3.3%
YOY % CHANGE
15% 10% 5% 0%
9.7%
-5%
Townhome/ Rowhome
-10% 10
Single Family Home
CONDO JAN
FEB
MAR
APR
MAY
JUN
SFH JUL
TH/ROWHOME AUG
SEP
OCT
NOV
DEC
7.2%
The DMV Metro experienced steady growth in sales volume and average sales price from 2019 to 2020. Overall, sales volume increased by 5.81% and average sales price increased 7.83% across all major DMV Metro counties. Alexandria led the region in both categories with increases of around 12% and 9.8% for sales volume and average sales price respectively.
20,000
TOTAL SALES VOLUME BY COUNTY 2019 2020
18,000 TOTAL SALES VOLUME
16,000 14,000
COUNTY
2019
2020
YOY
Alexandria
2,451
2,746
12.04%
Arlington
2,643
2,731
3.33%
8,956
9,626
7.48%
Fairfax
16,267
16,985
4.41%
Loudoun
6,836
7,410
8.40%
DC
12,000 10,000 8,000
Montgomery
12,155
12,899
6.12%
6,000
Prince George's
9,994
10,349
3.55%
4,000
TOTALS
59,302
62,746
5.81%
2019
2020
YOY
Alexandria
$597,347
$655,352
9.83%
Arlington
$719,948
$765,451
6.19%
2,000 0
ALEXANDRIA ARLINGTON
DC
FAIRFAX
LOUDOUN MONTGOMERY PRINCE GEORGE'S
AVERAGE SALES PRICE BY COUNTY 2019 2020
$800,000
AVERAGE SALES PRICE
$700,000 $600,000
COUNTY
DC
$723,918
$768,659
8.64%
$500,000
Fairfax
$603,780
$655,917
6.32%
$400,000
Loudoun
$548,160
$602,044
7.96%
Montgomery
$568,946
$604,160
9.71%
Prince George's
$329,880
$356,135
6.18%
TOTALS
$567,124
$611,509
7.83%
$300,000 $200,000 $100,000 $0
ALEXANDRIA ARLINGTON
DC
FAIRFAX
LOUDOUN MONTGOMERY PRINCE GEORGE'S
11
ACTIVE INVENTORY TOTALS BY COUNTY Amidst the pandemic, more urban areas like DC, Arlington and Alexandria saw an uptick in active inventory. This stems from smaller and efficiently sized housing units not selling as quickly as they did in previous years. Another reason inventory increased in 2020 is that newer product delivered that was not selling as rapidly as 2019 due to the pandemic naturally leading buyers to more suburban locations with larger-sized product. However, when people are buying in these three urban counties, sales prices are still up on average 7.4% in 2020, thus exemplifying the value that the urban real estate product holds and how lower interest rates are helping sellers achieve higher pricing. 2019/2020 YOY TOTALS YEAR
ALEXANDRIA
ARLINGTON
FAIRFAX
LOUDOUN
MONTGOMERY
PRINCE GEORGE’S
WASHINGTON, DC
TOTALS
2019 TOTALS
2,073
2,900
22,453
10,739
23,966
19,890
17,341
99,362
2020 TOTALS
2,779
4,093
17,413
6,705
15,779
11,671
18,330
76,770
34.06%
41.14%
-22.45%
-37.56%
-34.16%
-41.32%
5.70%
-22.74%
YoY Difference %
12
DMV SALES VERSUS AVERAGE INTEREST RATE Interest rates (30-year fixed rate) reached historic lows in 2020. They started the year at a peak of 3.72% and decreased steadily, dipping below 3% in July. Rates remained under 3% for the rest of the year and reached a low of 2.66% in December. These extraordinarily low rates powered the market’s robust activity and escalating prices, and we anticipate rates to remain stable and relatively flat in 2021.
TOTAL DC/MD/VA SALES AND AVG INTEREST RATE -2020
6,500
4.00% 3.50%
6,000
3.00%
SALES VOLUME
2.50%
5,000
2.00% 1.50%
4,500
AVG INTEREST RATE
5,500
1.00% 4,000
0.50% 2020 - SALES VOLUME
3,500 JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
2020 - AVG INTEREST RATE SEP
OCT
NOV
0.00%
DEC
MONTH SOLD 13
PRIME URBAN CONDO MARKETS OVERVIEW The following section mirrors the methodology of our typical annual report, focusing on the urban cores with the most active markets for new construction condos. These “prime submarkets” consist of the District of Columbia, the cities Alexandria, Bethesda, and Silver Spring, and select relevant areas of Crystal City, Reston, Rockville, Tysons, McLean, and the Rosslyn-Ballston corridor. The data for this section includes settled sales only, which were gathered from Bright MLS, public records and proprietary sources. This differs from the previous section, which relied on contractual agreement data to compare fluctuations more precisely over time. Using settled sales means slightly less precise chronology—settlements early in the year may reflect sale agreements made in the previous year, and contracts written late in the year but not settled may be left out—but using settled sales ensures that our price data is confirmed and allows us to include sales that never had a verifiable date of contract. As the premier sales and marketing agency in Washington, DC, Urban Pace is directly involved in many of the area’s new construction condo sales. We augment this first-hand data through a variety of channels, including public tax records, multiple listing services, and regular interactions with agents at all new construction projects in the area. The findings from our data reveal strong demand and corresponding high prices for condos in these prime submarkets, despite a severe but temporary dip in activity in the spring. There were more settlements of both new construction condos and resale condos than the previous year, and per-unit and per-square-foot pricing was up for all property conditions. The strongest submarkets included Alexandria, which saw a massive spike in new luxury condo settlements after years of sparse deliveries; Tysons, which continues to grow with high pricing achieved at its newest developments; and NoMa, which figures to maintain its growing popularity as a residential neighborhood with numerous projects in the pipeline. The distribution of unit types among new construction settlements aligned with historic trends after an outlying year in which two-bedroom units settled at a greater rate than normal. The market for new construction condominiums started strongly in early 2020 and was set up for a record-breaking spring market before COVID-19 hit. There were over 20 condo buildings actively selling in the city at the beginning of the year, which ranged from boutique buildings like 11|Q and Seven|H to larger projects of over 100 units like Avidian, eNvy, and The Lexicon. Mortgage rates started the year in the mid to high 3.00% range, which was lower than 2019, and helped incentivize buyers to move forward. The market was on track to remain relatively steady with a slight increase in pricing and volume over 2019. After the mid-March COVID-19 spike and subsequent lockdowns, condo sales activity dropped far below 2019 numbers in April and remained low through most of spring. With so much uncertainty in the market, buyers became hesitant to move forward as there were still a lot of questions around the health implications of the coronavirus, the impact on the economy, and what that meant for job security. Even though interest rates continued to drop, there was a slow-down in sales activity until there was a little more optimism in the summer months.
14
While Urban Pace continued to see activity across all of our new construction projects and their various price points, physical tours of the properties decreased significantly when the government began discouraging face-to-face interactions. In response, we increased the use of our virtual platforms to boost marketing efforts and help maintain sales. Despite lower in-person traffic, Urban Pace still wrote contracts at a good pace which spoke to consumer confidence in the real estate market. We also had record high levels of web traffic over the spring and early summer months as prospects used the time to research properties and prepare for their purchase. The delay of the usual spring market resulted in pent-up demand seen in the summer and fall. Though the pandemic was still ongoing, the initial uncertainty of the spring subsided and consumers returned to the market, some ready to make real estate decisions they had already been considering prior to COVID-19, and others motivated by the new circumstances of the pandemic. If someone was looking for a larger condo with a den or balcony or to downsize to one level, this was even more top of mind after being stuck at home for several months. The most active months for condo settlements were July through October, a much later peak than in normal years. That period totaled 2,890 sales in our prime submarkets. Activity began to taper off in the fall, as it normally does, but September through December saw the greatest increase in activity over 2019, averaging 45% more settlements each month. DC, Maryland, and Virginia all designated construction as an essential industry when pandemic mitigation policies began, so projects under construction were able to move forward. However, other challenges stemming from the pandemic caused considerable delays in some cases. Health and safety protocols like temperature checks and COVID testing were put in place for most sites but that did not completely eliminate outbreaks. Sites that had positive tests often had to shut down temporarily and some projects used smallerthan-usual crews on site. The global reach of the pandemic affected supply chains as well. Appliances, lumber, and other essential materials saw shortages and delays that impacted construction progress. Additionally, many government agencies transitioned to a remote work environment which affected response times for inspections, certificates of occupancy, and other approvals. Typically, consumers are comfortable buying new construction condos between six months to a year before delivery depending on where they are in their lives. For most people this is a comfortable amount of time to get out of a lease, downsize, or sell their current home. During the pandemic, projects that were under construction and not delivering until 2021 left buyers more apprehensive. It was much harder to get them moving forward with an offer because of the economic challenges, job security concerns, mortgage rate projections, and the general uncertainty that came with the fall’s presidential election. Another challenge was the mortgage approval process for the buyers that needed conventional financing to purchase their new condo. With the economic downturn impacting many jobs, mortgage companies became much more stringent with their approval processes and incorporated additional levels of review prior to closing. Buyers had to submit the standard financial paperwork at the beginning of the process but also show proof of employment and financial stability midway and then again right before settlement. This added more time to the overall process and delayed closing dates for many buyers.
NEW CONSTRUCTION CONDO CONTRACTS In order to get a more complete picture of the new construction market, Urban Pace combined the contract data we sourced from multiple listing services with proprietary research on over 75 of the largest condo projects currently selling in the area. These totals are reflected below. The District shows 20% increase in new construction contracts, rising from 735 in 2019 to 882 in 2020. The surrounding areas of Maryland and Virginia decreased by 17%, from 604 to 499. We saw slower-than-expected sales paces for most projects that were selling pre-construction in 2020, and strong velocity at those projects that had inventory available for immediate delivery. NEW CONSTRUCTION CONDO CONTRACTS 2019
882
900 800
2020
735
700
604
600
499
500 400 300 200 100 0
DC
MD/VA
SALES VOLUME By the end of 2020, new construction condo sales were up 21% from previous year settled sales in 2019. A few large projects based on unit count delivered this year including eNvy, The Lexicon and Peninsula 88 to name a few. Strong volume in the new construction market came after interest rates began their downtrend in the summer, and excited buyers looking to capitalize on these record low rates while they had a chance. In a similar trend, condo resale product also performed well across the DMV with growth of 6%. SALES BY PROPERTY CONDITION - PRIME CONDO SUBMARKETS 2019
7,000 6,000
2020
5,923
5,605
5,000 4,000 3,000 2,000 1,000 0
1,162
964
NEW CONSTRUCTION
RESALE
15
AVERAGE CONDO SIZE (SF) The average size of condominiums in the DMV remained consistent in 2020 compared to the year prior. The highest increased in sizing occurred in units sold Maryland and Virginia, increasing by 7%. The COVID-19 pandemic could be one cause in this increase in average sizing for buyers in the metro area. AVG SIZE (SF) BY PROPERTY CONDITION - PRIME CONDO SUBMARKETS 1,600 1,405
1,400 1,200 1,000
1,007
1,507
2019
1,075
1,004 917
1,060
944
1,020 883
800
2020
1,034
875
600 400 200 -
DC
MD/VA NEW CONSTRUCTION
DC MD/VA RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
DC MD/VA NO RENOVATION (BEYOND 10 YEARS)
AVERAGE CONDO PRICE Condominium average prices grew slightly in 2020 across new construction and resales. New construction condominiums are still selling at a major premium compared to both renovated and non-renovated resale product. AVG PRICE BY PROPERTY CONDITION - PRIME CONDO SUBMARKETS $900,000 $800,000
$767,516
2019
$778,335
$700,000 $600,000 $479,146
$500,000
$498,699 $406,251
$400,000
$434,725
$300,000 $200,000 $100,000 $0
16
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS)
2020
AVERAGE CONDO PRICE PER SQUARE FOOT Price per square foot has increased year-over-year throughout all property conditions across the DMV. Specifically, new construction condominiums have almost eclipsed an average sale price of $700 per square foot and present on average about a $200 per square foot premium over any renovated resale product in the region. AVG PRICE PSF BY PROPERTY CONDITION - PRIME CONDO SUBMARKETS $800 $700
$686
2019
$698
$600 $484
$500
2020
$497 $423
$400
$457
$300 $200 $100 $0
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS)
17
2020 NEW CONSTRUCTION PRICING AVERAGE PSF BY PRIME SUBMARKETS Below is a list of submarkets with significant new construction sales activity ranked by average price per square foot for new construction projects. The top ten submarkets include eight in DC along with Alexandria and Bethesda. Alexandria tops the list due to strong prices in Old Town at Robinson Landing and Watermark. These luxury condos were the first new construction options in the Alexandria submarket in over five years and offered waterfront views in a pedestrian-friendly neighborhood. The pent-up demand and coveted features combined to drive prices over $1,000 per square foot. •
West End had the second-highest price per square foot based on nine sales at 2501 M and Westlight, but no other new projects delivered in 2020.
•
Dupont Circle rounded out the top three with 16 sales at 1745N.
•
Buzzard Point had two penthouse sales at Peninsula 88 and Navy Yard was bustling with both Avidian and eNvy selling throughout all of 2020. ALEXANDRIA
$1,232
WEST END
$1,136
DUPONT CIRCLE
$945
BUZZARD POINT
$924
NAVY YARD
$823
SHAW
$810
BETHESDA
$807
LOGAN CIRCLE
$805
CAPITOL HILL
$740
U STREET CORRIDOR
$737
TYSONS/MCLEAN
$736
NOMA
$690
ADAMS MORGAN
$686
LEDROIT PARK
$625
MOUNT PLEASANT
$603
COLUMBIA HEIGHTS
$577
TRUXTON CIRCLE
$570
H STREET CORRIDOR
$569
BRIGHTWOOD PARK
$569
16TH STREET HEIGHTS
$554
PARK VIEW
$546
PETWORTH
$526
BROOKLAND
$524
ECKINGTON
$498
TAKOMA
$489
CARVER/LANGSTON
$487
ROCKVILLE
$472
SILVER SPRING
$469
IVY CITY
$451
TRINIDAD
$444
RESTON
18
MARYLAND
$392
EAST OF ANACOSTIA RIVER $0
WASHINGTON, DC VIRGINIA
$331 $200
$400
$600
$800
$1,000
$1,200
$1,400
NEW CONSTRUCTION SALES BY UNIT TYPE 2019 3BR 8.0% 2BR+DEN 9.6%
2020 3BR 11.9%
STUDIO 1.7% 1BR 25.3%
2BR+DEN 5.0%
STUDIO 0.7% 1BR 31.4%
1BR+DEN 6.3% 2BR 49.0%
2BR 44.9%
1BR+DEN 6.2%
The charts above compare unit types as a percentage of all new construction condos sold in the prime submarkets in 2019 and 2020. Most significantly, the share of one-bedroom units increased 5.8 percentage points and there was a corresponding decrease of 4.2 percentage points in the share of two-bedrooms. This change returns the distribution of unit types closer to historic trends. Three-bedroom units and two-bedroom units with dens are somewhat interchangeable to many buyers and their combined share of sales changed negligibly from 17.6% to 16.9%.
19
CLASS A RENTAL MARKET SUMMARY The rental market in the Washington, DC region also had a good start to 2020. There were many Class A apartments in the lease-up phase as the year began and the pipeline was strong for other new properties coming to market between 2020 – 2022. Some of the most active submarkets in the city for new rental buildings included Navy Yard and NoMa. The well-educated demographic of Washington, DC professionals with high paying jobs had supported this rental pipeline and higher rental rates prior to the COVID-19 outbreak. Additionally, with home prices rising and demand increasing, there were also new barriers to homeownership that kept some individuals renting longer. Once the pandemic hit and lockdowns went into place, there was a great deal of concern about the rental delinquencies hitting the market in the spring. As unemployment increased during this time landlords started bracing for the worst. The impact was not nearly as bad as anticipated with landlords reporting payments around 90% from April and into the summer months. This was likely supported by unemployment benefits from the Coronavirus Aid, Relief and Economic Security Act that passed in March and went through July. Some renters decided with the uncertainty in the market that paying top rents no longer made sense and decided it was more cost effective to move home with their family or to more affordable options outside of the downtown area of the city. Another part of the rental pool that left Class A apartments included recent graduates and college students looking for apartments in the city to be near their campus. With most colleges and universities shifting to remote learning, the usually strong demand from this portion of the market was missing in 2020.
20
Many renters that leased early in the year were drawn to the newer apartment buildings in the city that included shared amenity spaces and were close to local bars, restaurants, and retail in the neighborhood. Most landlords closed their apartment’s amenity spaces to residents due to COVID-19 protocols for a portion of the year and some even did so for all of 2020. The restaurant and retail scenes were limited at best as most restaurants remained open for take-out only until things slowly started opening for outdoor dining and limited indoor seating during the summer. Later in the year things scaled back again as it got colder and COVID-19 cases surged around the holidays. All of these challenges led many landlords to reduce rents and offer concessions starting in the spring, while also making aggressive offers to keep existing tenants. Some offered upgrades to larger units within their building at the same rates and others offered incentives such as Pelotons, televisions, and furniture packages to attract new renters. Concessions increased in the summer. Up to two months free became a standard offer, with some buildings offering even more. COVID’s biggest impact in the residential market for our region in 2020 was on the rental market. Washington, DC suffered one of its bleakest years on record. The leasing challenges got progressively worse throughout the year and the fourth quarter brought concessions to their highest levels, and rents continued to plummet. The city showed the sharpest decline, but the overall region saw rents decline by over 10% with absorption rates also at an all-time low for the region.
21
CAPITOL HILL
SUBMARKET STATISTICS 2020
RECAP New construction settlements increased in Capitol Hill in 2020 as Bonéval entered the market, joining Penn11, the last units at Stone Hill, and a collection of townhome conversions. Penn11 sold its most expensive units in 2019, with numerous seven-figure prices that averaged over $1,000 per square foot. That left 2020’s average per-unit and per-square-foot prices just short of 2019’s mark, though the established character of the neighborhood still ensures a relatively high baseline price for all product types. Capitol Hill’s vacancy rate in multifamily rentals showed an alarming climb to 47.4%, but this high rate is due to three new buildings delivering 610 new units in 2020. For the three stabilized Class A projects in Capitol Hill, vacancy averages 13.4%. Rents decreased by 10%, though it’s difficult to say how much of that was due to pandemic effects and how much was due to the spike in supply.
NEW CONSTRUCTION SETTLED SALES 2019
2020
% CHANGE
46
65
41%
Number of Settled Sales
966
997
3%
$754,626
$737,610
-2%
Avg Price PSF
$781
$740
-5%
Avg Condo Fee PSF
$0.56
$0.62
11%
Avg Size SF Avg Price
SALES VOLUME
PRICE PER SQUARE FOOT
120
$900 100
100
105
$800
$781
$740
$700
80
66
65 60
46
$604
$600
$601 $534
$500 $400
43
40
$300 $200
20
$100
0
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS) 2019
$0
NEW CONSTRUCTION
$754,626 $737,610
$700,000
$480,273
$500,000
$525,993
NO RENOVATION (BEYOND 10 YEARS)
2020
2BR+DEN 4.6%
$600,000
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
2020 NEW CONSTRUCTION SALES BY UNIT TYPE
AVERAGE SALES PRICE $800,000
3BR 3.1%
1BR 23.1%
$481,355 $487,757
$400,000 $300,000 $200,000 2BR 44.6%
$100,000 $0
24
$568
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS)
1BR+DEN 24.6%
SELECT CONDO PROJECT SNAPSHOTS Boneval Community Three Development Delivered, Actively Selling Total Units - 40 Units Sold - 37 Pace - 2/Month Average Size - 878 SF Projected Sellout - Mid $800s PSF
Penn 11 Perseus Realty, Westbrook Partners & Javelin 19 Delivered, Actively Selling Total Units - 34 Units Sold - 33 Pace - 2/Month Average Size - 1,034 SF Projected Sellout - Low $900s PSF
NEW CONSTRUCTION PIPELINE & SUBMARKET MAP Boneval
Watkins Alley
417 9th St SE
Penn 11
Active
RECENTLY DELIVERED CLASS A RENTAL PROJECTS
Pipeline
Recently Sold
Blackbird Apartments The Rushmore
RENTAL ANALYSIS – CLASS A BUILDINGS RENTAL CHART Period 2016 2017 2018 2019 2020 2021 EST FORECAST
Inventory Bldgs 1 1 2 5 -
Inventory Units 139 139 284 894 894
VACANCY AND OCCUPANCY CHART Period Vacancy Percent 2016 2017 43.3% 2018 0.2% 2019 32.9% 2020 47.4% 2021 EST FORECAST 37.2%
Inventory Avg SF 669 669 787 802 -
Effective Rent Per Unit $2,801 $2,844 $2,927 $2,935 $2,625 $2,478
Vacancy % Growth/Yr (43.1%) 32.8% 14.4% (10.1%)
Effective Rent PSF $3.49 $3.54 $3.65 $3.66 $3.27 $3.09 Occupancy Percent 56.7% 99.8% 67.1% 52.6% 62.8%
Effective Rent % Growth/Yr 1.2% 1.5% 2.9% 0.3% (10.6%) (5.6%)
Effective Rent Concessions % 1.9% 1.8% 0.2% 1.5% 6.2% 8.3%
Occupancy % Growth/Yr 43.1% (32.8%) (14.4%) 10.1%
UP OUTLOOK WHAT’S NEXT… Capitol Hill continues to be one of the most desirable submarkets in Washington, DC. The charming treelined streets, proximity to government jobs, and various retail sections make this location attractive to both first-time homebuyers and empty nesters. The majority of product that was previously built in Capitol Hill targeted empty nesters who were selling their rowhomes and downsizing to single-level living. These buyers had significant equity in their homes and were willing to pay a premium for their desired product, resulting in a competitive highend market. In 2020, the majority of inventory targeted a younger demographic and sold well. 2021 will bring limited large-scale new construction to Capitol Hill and most new construction ownership opportunities will be focused on boutique, urban infill projects. 25
NAVY YARD
SUBMARKET STATISTICS 2020 RECAP
After a robust year of new construction settlements led by The Bower in 2019, Navy Yard’s activity mellowed while its prices stayed strong. The majority of 2020 settlements were at eNvy, located across the street from Nationals Park. Per-unit pricing did not change significantly, but the average unit size was considerably smaller, leading to a 7% bump in per-square-foot value. Resales were a fraction of the submarket’s activity, though they did increase over 2019 and pushed per-square-foot prices up by 10%. The area remains busy with numerous projects currently selling that had not yet begun settlements at the turn of the year. The rental market, which has more than tripled in size since 2016 and has powered Navy Yard’s revitalization, was hit hard by the effects of the pandemic. Vacancy rates rocketed to 32.5% as rents dropped by 13.5%.
NEW CONSTRUCTION SETTLED SALES Number of Settled Sales
2019
2020
% CHANGE
143
86
-40%
836
778
-7%
$642,150
$640,315
0%
Avg Price PSF
$768
$823
7%
Avg Condo Fee PSF
$0.82
$0.59
-28%
Avg Size SF Avg Price
SALES VOLUME 160
PRICE PER SQUARE FOOT $900
143
140
$800
$823 $707
$700
120
$624
$600
100
86
$610
$400
60
$300
40
$200 14
20
17
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
$100
8
2
NO RENOVATION (BEYOND 10 YEARS) 2019
AVERAGE SALES PRICE $660,000 $640,000
$642,150 $640,315
$620,000
$0
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
2020
2020 NEW CONSTRUCTION SALES BY UNIT TYPE
$636,993 $602,970
$600,000
$606,488
2BR 24.4%
STUDIO 5.8%
$580,000 $560,000 $538,500
$540,000 $520,000 $500,000 $480,000
28
$638
$500
80
0
$768
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS)
1BR 69.8%
NO RENOVATION (BEYOND 10 YEARS)
SELECT CONDO PROJECT SNAPSHOTS Avidian Monument Realty Delivered, Actively Selling Total Units - 171 Units Sold - 141 Pace - 5.9/Month Average Size - 865 SF Projected Sellout - Mid $600s PSF
eNvy Jair Lynch Delivered, Actively Selling Total Units - 127 Units Sold - 85 Pace - 4/Month Average Size - 757 SF Projected Sellout - Low $800s PSF
NEW CONSTRUCTION PIPELINE & SUBMARKET MAP Square 767
Emblem at Barracks Row Kennedy on L The Bower Avidian eNvy Active
RECENTLY DELIVERED CLASS A RENTAL PROJECTS
The Estate Crossing DC 10 K
Maren The Garrett at The Collective
Pipeline
Recently Sold
The Kelvin Parc Riverside West Meridian on First
RENTAL ANALYSIS – CLASS A BUILDINGS RENTAL CHART Period 2016 2017 2018 2019 2020 2021 EST FORECAST
Inventory Bldgs 11 14 16 20 29 -
Inventory Units 2,911 3,943 4,568 5,942 9,046 9,046
VACANCY AND OCCUPANCY CHART Period Vacancy Percent 2016 28.7% 2017 11.7% 2018 7.7% 2019 15.5% 2020 32.5% 2021 EST FORECAST 21.7%
Inventory Avg SF 809 807 807 807 822 -
Effective Rent Per Unit $2,761 $2,814 $2,875 $2,915 $2,523 $2,551
Vacancy % Growth/Yr 18.5% (17.0%) (4.0%) 7.9% 17.0% (10.8%)
Effective Rent PSF $3.31 $3.38 $3.45 $3.50 $3.03 $3.13 Occupancy Percent 71.3% 88.3% 92.3% 84.5% 67.5% 78.3%
Effective Rent % Growth/Yr (0.2%) 1.9% 2.2% 1.4% (13.5%) 1.1%
Effective Rent Concessions % 2.0% 1.6% 0.9% 0.8% 7.9% 5.3%
Occupancy % Growth/Yr (18.5%) 17.0% 4.0% (7.9%) (17.0%) 10.8%
UP OUTLOOK WHAT’S NEXT… Over the last three years, Navy Yard has continued to outperform most submarkets in the city. Over the next 12 months, Urban Pace projects the remaining new inventory at Avidian, eNvy and Kennedy on L to be fully absorbed. The success of these new construction projects will continue to make this submarket attractive for developers and may lead to planned conversions of multifamily and commercial buildings to for-sale condominiums over the next several years.
29
NoMa
SUBMARKET STATISTICS 2020 RECAP
NoMa has experienced a boom in residential construction in recent years, with a notable concentration in rentals. The average price per square foot for new condos trended down in 2020 because 80% of settled sales were units at The Lexicon, a building that began sales over four years ago. Prices at The Lexicon were suppressed by a difficult location and less expensive finishes compared to other projects in the area. The transactions at The Lexicon are an outlier for price points in NoMa, with the average price per square foot of all other new units at $756, a 6.8% increase over 2019. NoMa’s rental market has grown substantially in recent years and experienced rapid absorption. The vacancy rate was relatively stable compared to other parts of the city increasing to just 13.1%, but rents dropped 11.4%.
NEW CONSTRUCTION SETTLED SALES 2019
2020
% CHANGE
43
144
235%
Number of Settled Sales
859
787
-8%
$608,017
$543,523
-11%
Avg Price PSF
$708
$690
-3%
Avg Condo Fee PSF
$0.44
$0.44
0%
Avg Size SF Avg Price
SALES VOLUME
PRICE PER SQUARE FOOT
160
$800 144
140
$700
120
$600
100
$500
80
$400
60
$690 $552
$552
$517 $418
$300 43
40
$200
20 0
$708
7 NEW CONSTRUCTION
11
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
$100 3
1
NO RENOVATION (BEYOND 10 YEARS) 2019
AVERAGE SALES PRICE $608,017 $543,523
$534,068
$400,000
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
2020
2BR+DEN 3BR STUDIO 1.4% 4.2% 0.7%
$586,228
$500,000
NEW CONSTRUCTION
2020 NEW CONSTRUCTION SALES BY UNIT TYPE
$700,000 $600,000
$0
$491,333
2BR 20.1%
$330,000
$300,000 $200,000 1BR+DEN 8.3%
$100,000 $0
32
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS)
1BR 65.3%
NO RENOVATION (BEYOND 10 YEARS)
SELECT CONDO PROJECT SNAPSHOTS Chapman Stables Four Points Delivered, Actively Selling Total Units - 114 Units Sold - 100 Pace - 2.5/Month Average Size - 656 SF Projected Sellout - Mid $700s PSF
Tribeca UIP & Kadida Development Under Construction, Actively Selling Total Units - 99 Units Sold - 10 Pace - 2/Month Average Size - 900 SF Projected Sellout - Mid $700s PSF
NEW CONSTRUCTION PIPELINE & SUBMARKET MAP 1625 Eckington
1600 N Capitol
The Lexicon One Florida Tribeca
Chapman Stables
Congress Place
Active
RECENTLY DELIVERED CLASS A RENTAL PROJECTS
Union Place RESA
The Belgard AVA NoMa
Pipeline
Recently Sold
100K Apartments Coda on Bryant St
RENTAL ANALYSIS – CLASS A BUILDINGS RENTAL CHART Period 2016 2017 2018 2019 2020 2021 EST FORECAST
Inventory Bldgs 10 11 14 16 16 -
Inventory Units 3,678 4,083 5,089 5,940 5,940 5,940
VACANCY AND OCCUPANCY CHART Period Vacancy Percent 2016 6.4% 2017 7.8% 2018 12.1% 2019 11.3% 2020 13.1% 2021 EST FORECAST 11.1%
Inventory Avg SF 836 826 818 812 812 -
Effective Rent Per Unit $2,396 $2,386 $2,452 $2,549 $2,259 $2,235
Vacancy % Growth/Yr (3.6%) 1.3% 4.3% (0.8%) 1.9% (2.1%)
Effective Rent PSF $2.95 $2.94 $3.02 $3.14 $2.78 $2.79 Occupancy Percent 93.6% 92.2% 87.9% 88.7% 86.9% 88.9%
Effective Rent % Growth/Yr 1.2% (0.4%) 2.8% 4.0% (11.4%) (1.1%)
Effective Rent Concessions % 1.0% 1.3% 2.0% 0.7% 1.4% 1.0%
Occupancy % Growth/Yr 3.6% (1.3%) (4.3%) 0.8% (1.9%) 2.1%
UP OUTLOOK WHAT’S NEXT… NoMa continued to mature as a residential submarket in 2020. What was typically seen as an office market, it saw an increase in home ownership and continued to evolve into a 24-hour destination. Buyers and renters enjoy the convenience of one of the most centralized locations in the city. Located between two of the most rapidly changing areas in the city, Union Market and H Street, NoMa has become a destination of its own. As more residential deliveries take place in 2021 and other large-scale developments begin sales, we expect NoMa to be one of DC’s highest-performing submarkets. 33
SHAW
SUBMARKET STATISTICS 2020 RECAP
After a year when most new construction sales in Shaw came from larger-sized units in boutique buildings and townhome conversions, two relatively big projects dominated the sales activity in 2020. 78% of settlements were units at either 801N or Perla, which combined efficiently-sized units, luxury finishes, and attractive amenity packages to drive up the submarket’s price per square foot by 15% to $810. A third major project, The Shaw, was expected to sell many of its 69 condos in 2020, but shortly after marketing began, it was instead sold to an investor and converted to rentals. Shaw’s heavy concentration of rentals did not escape the citywide downturn—rents dropped 13.4% compared to 2019.
NEW CONSTRUCTION SETTLED SALES 2019
% CHANGE
17
67
294%
1,295
962
-26%
$910,918
$779,427
-14%
Number of Settled Sales Avg Size SF Avg Price
2020
Avg Price PSF
$703
$810
15%
Avg Condo Fee PSF
$0.77
$0.62
-19%
PRICE PER SQUARE FOOT
SALES VOLUME 70
$900
67
$810
$800
60
$700
50
$594
$600
43 40
37
$661
$300 $200
10
$100
0
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS) 2019
$900,000 $800,000
$910,918 $779,427
$700,000
$730,633 $591,376
$600,000
$0
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
$671,808
2020
2BR+DEN 3.0%
3BR 7.5%
2BR 31.3%
$400,000
1BR 41.8%
$300,000 $200,000 $100,000 NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
STUDIO 1.5%
$597,512
$500,000
$0
NO RENOVATION (BEYOND 10 YEARS)
2020 NEW CONSTRUCTION SALES BY UNIT TYPE
AVERAGE SALES PRICE $1,000,000
36
$634
$400
20
17
$657
$500
32
30 20
$703
NO RENOVATION (BEYOND 10 YEARS)
1BR+DEN 14.9%
SELECT CONDO PROJECT SNAPSHOTS Perla Four Points & Warrenton Group Delivered, Actively Selling Total Units - 66 Units Sold - 33 Pace - 1.6/Month Average Size - 1,082 SF Projected Sellout - Low $900s PSF
The Adora Old City Development Under Construction, Actively Selling Total Units - 9 Units Sold - 1 Pace - 1/Month Average Size - 1,400 SF Projected Sellout - Low $1,000s PSF
NEW CONSTRUCTION PIPELINE & SUBMARKET MAP The Fold The Adora
Perla
8th & O 801 N Active
RECENTLY DELIVERED CLASS A RENTAL PROJECTS
880 P The Shay
Pipeline
Recently Sold
The Colonel The Shaw
RENTAL ANALYSIS – CLASS A BUILDINGS RENTAL CHART Period 2016 2017 2018 2019 2020 2021 EST FORECAST
Inventory Bldgs 5 6 6 6 7 -
Inventory Units 1,215 1,357 1,357 1,357 1,426 1,426
VACANCY AND OCCUPANCY CHART Period Vacancy Percent 2016 6.7% 2017 11.3% 2018 3.9% 2019 4.9% 2020 17.4% 2021 EST FORECAST 15.3%
Inventory Avg SF 740 741 741 741 744 -
Effective Rent Per Unit $2,713 $2,623 $2,628 $2,715 $2,351 $2,237
Vacancy % Growth/Yr (12.7%) 4.5% (7.4%) 1.0% 12.5% (2.1%)
Effective Rent PSF $3.64 $3.52 $3.53 $3.65 $3.16 $3.01 Occupancy Percent 93.3% 88.7% 96.1% 95.1% 82.6% 84.7%
Effective Rent % Growth/Yr 4.8% (3.3%) 0.2% 3.3% (13.4%) (4.8%)
Effective Rent Concessions % 1.1% 1.7% 1.6% 0.5% 1.9% 4.3%
Occupancy % Growth/Yr 12.7% (4.5%) 7.4% (1.0%) (12.5%) 2.1%
UP OUTLOOK WHAT’S NEXT… In recent years Shaw has been a residential destination for both millennials and the Gen Z demographic. Both renters and buyers are attracted to the area’s trendy social scene with popular bars and restaurants, as well as the neighborhood’s proximity to the U Street Corridor and Downtown. Shaw’s balance of commercial spaces with residential blocks gives it a contemporary urban feel while maintaining a connection to the area’s rich history. While the retail market in Shaw suffered noticeable effects from COVID-19 restrictions, that has not deterred buyers during the pandemic. Urban Pace expects that as Shaw returns to its pre-pandemic activity in 2021, there will be an increase in overall transactions specifically from the empty nester demographic due to the current inventory that is available. 37
BETHESDA
SUBMARKET STATISTICS 2020 RECAP
Bethesda saw a slight drop in both activity and prices of new construction condos in 2020 due to aging and limited inventory. The most recent deliveries in Bethesda occurred in 2017, and the last units available have been discounted to expedite sales. Resale activity of recently constructed or renovated condos increased by 38%, indicating that there is healthy demand for quality product. As the only submarket highlighted in this report that did not introduce any new product in the last few years, Bethesda appears to be an attractive opportunity for new projects that are first to market. The rental market has been similarly stable, with no new deliveries since 2017. Rents dropped 6.1% in 2020, but vacancies moved negligibly.
NEW CONSTRUCTION SETTLED SALES 2019
2020
% CHANGE
32
23
-28%
Number of Settled Sales
2,038
1,961
-4%
$1,659,485
$1,583,143
-5%
Avg Price PSF
$814
$807
-1%
Avg Condo Fee PSF
$0.90
$0.83
-8%
Avg Size SF Avg Price
SALES VOLUME
PRICE PER SQUARE FOOT
120
$900 108
$800
100
$814
$807
$700 78
80
$600 $500
60
60
$420 $347
$300
32
$200
23
20
$444
$400
50
40
$430
$100
0
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS) 2019
$1,600,000
$1,659,485
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS)
2020
2020 NEW CONSTRUCTION SALES BY UNIT TYPE
AVERAGE SALES PRICE $1,800,000
$0
$1,583,143 3BR 30.4%
$1,400,000 $1,200,000 $1,000,000
2BR 60.9%
$800,000 $600,000
$535,571 $516,681
$400,000
$474,914 $448,984
$200,000 $0
40
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS)
2BR+DEN 8.7%
SELECT CONDO PROJECT SNAPSHOTS The Lauren 1788 Holdings & Persimmon Capital Delivered, Actively Selling Total Units - 32 Units Sold - 29 Pace - 1/Month Average Size - 2,193 SF Projected Sellout - High $900s PSF
Cheval Duball and Resmark Companies Delivered, Actively Selling Total Units - 71 Units Sold - 68 Pace - 1.6/Month Average Size - 1,599 SF Projected Sellout - Low $800s PSF
NEW CONSTRUCTION PIPELINE & SUBMARKET MAP Stonehall Quarry Springs
Chevy Chase Lake
8008 Wisconsin Ave
The Claiborne
7800 Wisconsin Ave Cheval
Hampden Row
The Lauren
Active
The Greco
RECENTLY DELIVERED CLASS A RENTAL PROJECTS
Element 28 The Brody
Pipeline
Recently Sold
Gallery Bethesda II The Elm
RENTAL ANALYSIS – CLASS A BUILDINGS RENTAL CHART Period 2016 2017 2018 2019 2020 2021 EST FORECAST
Inventory Bldgs 8 9 11 11 11 -
Inventory Units 1,615 1,716 2,047 2,047 2,047 2,503
VACANCY AND OCCUPANCY CHART Period Vacancy Percent 2016 22.5% 2017 7.1% 2018 18.0% 2019 6.7% 2020 7.2% 2021 EST FORECAST 19.3%
Inventory Avg SF 919 932 930 930 930 -
Effective Rent Per Unit $3,174 $3,198 $3,190 $3,237 $3,039 $2,966
Vacancy % Growth/Yr 5.1% (15.4%) 10.9% (11.2%) 0.5% 12.1%
Effective Rent PSF $3.32 $3.34 $3.33 $3.38 $3.17 $3.10 Occupancy Percent 77.5% 92.9% 82.0% 93.3% 92.8% 80.7%
Effective Rent % Growth/Yr (2.2%) 0.8% (0.3%) 1.5% (6.1%) (2.4%)
Effective Rent Concessions % 3.8% 2.5% 1.8% 0.7% 2.5% 2.1%
Occupancy % Growth/Yr (5.1%) 15.4% (10.9%) 11.2% (0.5%) (12.1%)
UP OUTLOOK WHAT’S NEXT… The Bethesda market continues to have a notable concentration of new construction condominium projects with large unit sizes targeting empty nesters. While pricing is strong, the sales pace for projects like Cheval, Stonehall, The Lauren and Hampden Row remain very low. With an abundance of standing inventory and limited demand, Urban Pace projects a slow absorption in 2021 with all remaining new construction inventory being absorbed by the end of the year. For the first time in 15 years, a number of new developments in Bethesda’s pipeline are targeting a smaller average unit size at more affordable prices. It is still unclear how deep the demand is for this product type, but Urban Pace predicts that the first building to come to market will be met with pent-up demand and have a strong sales pace. 41
ALEXANDRIA
SUBMARKET STATISTICS 2020 RECAP
Alexandria was one of the most popular submarkets for new construction condos in the DMV area in 2020. The increase in average price per square foot may seem unusually high in 2020, but this number was bolstered by the luxury waterfront communities of Robinson Landing and The Watermark selling most of their units for over $1,000 per square foot. Alexandria had not seen new condos on the waterfront since The Oronoco delivered in 2014, and after five years of scarcity, multiple options including Carr Companies’ The Venue and Muse are currently under construction and selling at some of the fastest paces in the DMV. As the pandemic has made many people want more space, Alexandria has provided an “urban suburban” option with larger unit sizes that have easy access to Old Town Alexandria, National Harbor and Washington, DC. Alexandria has faced similar rental difficulties to other submarkets in 2020 with a decrease in rents of 12.1%. Demand has remained relatively stable with a 2.7% decrease in vacancy, likely due to Alexandria offering renters larger unit sizing and adding increased Class A supply in anticipation of Amazon HQ2 employees moving to the area.
NEW CONSTRUCTION SETTLED SALES 2019
2020
% CHANGE
5
41
720%
765
2,201
188%
$444,455
$2,711,358
510%
Avg Price PSF
$581
$1,232
112%
Avg Condo Fee PSF
N/A
$0.65
N/A
Number of Settled Sales Avg Size SF Avg Price
SALES VOLUME
PRICE PER SQUARE FOOT $1,400
700 621
600
623 486
500 400
$1.000 $800
378
300
$600
200
$400
100
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS) 2019
$334
$344
$297
$0
NEW CONSTRUCTION RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
$2,711,358
2020
1BR 2.7%
$2,500,000 $2,000,000 $1,500,000
2BR 37.8%
$1,000,000 $500,000 $444,455 $0
44
NEW CONSTRUCTION
$333
NO RENOVATION (BEYOND 10 YEARS)
2020 NEW CONSTRUCTION SALES BY UNIT TYPE
AVERAGE SALES PRICE $3,000,000
$581
$200
41
5
0
$1,232
$1,200
$350,790 $351,893
$293,165 $326,730
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS)
3BR 59.5%
SELECT CONDO PROJECT SNAPSHOTS Robinson Landing EYA Delivered, Actively Selling Total Condos/Townhomes - 70/26 Units Sold - 29/26 Pace - 1/Month Average Size - 1,960 SF Projected Sellout - Low $1,200s PSF
Watermark IDI Group Companies Delivered, Actively Selling Total Units - 18 Units Sold - 16 Pace - 1/Month Average Size - 2,339 SF Projected Sellout - Low $1,000s PSF
NEW CONSTRUCTION PIPELINE & SUBMARKET MAP Dylan
Muse
Tide Lock Venue 801 N Fairfax 211 N Union St
The Watermark Robinson Landing Active
RECENTLY DELIVERED CLASS A RENTAL PROJECTS
706 North The Dalton
Pipeline
Recently Sold
The Thorton Gables Old Town North
RENTAL ANALYSIS – CLASS A BUILDINGS RENTAL CHART Period 2016 2017 2018 2019 2020 2021 EST FORECAST
Inventory Bldgs 6 6 9 10 10 -
Inventory Units 1,011 1,011 1,749 1,981 1,981 1,981
VACANCY AND OCCUPANCY CHART Period Vacancy Percent 2016 4.9% 2017 4.0% 2018 16.1% 2019 8.9% 2020 6.2% 2021 EST FORECAST 6.3%
Inventory Avg SF 817 817 833 837 837 -
Effective Rent Per Unit $2,316 $2,357 $2,296 $2,328 $2,046 $2,108
Vacancy % Growth/Yr (4.9%) (1.0%) 12.1% (7.2%) (2.7%) 0.1%
Effective Rent PSF $2.77 $2.81 $2.74 $2.78 $2.44 $2.52 Occupancy Percent 95.1% 96.0% 83.9% 91.1% 93.8% 93.7%
Effective Rent % Growth/Yr 2.6% 1.8% (2.6%) 1.4% (12.1%) 3.0%
Effective Rent Concessions % 0.6% 0.4% 3.4% 1.3% 5.7% 2.1%
Occupancy % Growth/Yr 4.9% 1.0% (12.1%) 7.2% 2.7% (0.1%)
UP OUTLOOK WHAT’S NEXT… Alexandria has seen little new inventory over the last ten years. EYA’s introduction of Robinson Landing is by far the most high-profile debut in recent memory. While sales have been slow, select sales have been between $1,400 and $1,600 per square foot, underscoring the strong desire for empty nester product in Alexandria by the water. Over the last year, The Venue has had one of the fastest sales paces in the region. This is due in part to pent-up demand for efficiently sized new construction condominiums in Old Town, as this was the first building with such a mix to deliver on the waterfront in over 20 years. We predict continued strength in the empty nester market, but with the success of The Venue and introduction of Amazon HQ2 in Arlington, we believe that Alexandria is ripe for moderately priced first-time homeowner product. 45
TYSONS/MCLEAN SUBMARKET STATISTICS 2020 RECAP Tysons had great success in 2020 with a 42% increase in new condominium sales over 2019. Meridian Group was awarded “Best Washington/Baltimore Condominium Community” by Delta Associates for Verse, their condominium centerpiece at The Boro community with walking access to the Greensboro Silver Line Metro Station. Verse began most of their settlements in 2019, generating high per-squarefoot pricing along with a fast sales pace. The Bexley is the newest project to begin settlements in 2020, and while generating a similar sales pace to Verse, the building offers larger units in a less desirable location, resulting in an 11% decrease in average price per square foot in 2020. The Tysons rental market has outperformed other DMV submarkets from a demand perspective with a decrease in vacancy of 5.5% in 2020. This renter demand was likely generated by larger unit sizing and cheaper prices amidst the pandemic, when compared to other competitive markets like Arlington, Alexandria, and DC in more of an urban setting.
NEW CONSTRUCTION SETTLED SALES Number of Settled Sales
2019
2020
% CHANGE
113
161
42%
1,553
1,405
-10%
$1,284,082
$1,034,191
-19%
Avg Price PSF
$827
$736
-11%
Avg Condo Fee PSF
$0.38
$0.45
18%
Avg Size SF Avg Price
SALES VOLUME
PRICE PER SQUARE FOOT
250
$900 $800
205
200
$827 $736
$700 161
$600
144
150
$500
113 100
91
$400
$360
$413 $333
$365
$300
76
$200
50
$100 0
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
$0
NO RENOVATION (BEYOND 10 YEARS) 2019
NO RENOVATION (BEYOND 10 YEARS)
2020
$1,284,082
$1,200,000 $1,000,000
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
2020 NEW CONSTRUCTION SALES BY UNIT TYPE
AVERAGE SALES PRICE $1,400,000
NEW CONSTRUCTION
$1,034,191
2BR+DEN 3.7%
3BR 10.6%
1BR 21.7%
$800,000 $600,000 $383,716
$400,000
$471,442
1BR +DEN 5.0% $358,821 $390,708
$200,000 $0
48
NEW CONSTRUCTION
RENOVATED OR BUILT WITHIN 10 YEARS (EXCLUDING NEW CONSTRUCTION)
NO RENOVATION (BEYOND 10 YEARS)
2BR 59.0%
SELECT CONDO PROJECT SNAPSHOTS The Verse The Meridian Group & Kettler Delivered, Actively Selling Total Units - 140 Units Sold - 120 Pace - 4/Month Average Size - 1,960 SF Projected Sellout - Mid $800s PSF
The Bexley NVHomes Delivered, Actively Selling Total Units - 111 Units Sold - 63 Pace - 4/Month Average Size - 1,482 SF Projected Sellout - Mid $600s PSF
NEW CONSTRUCTION PIPELINE & SUBMARKET MAP
The Signet
The View The Verse The Boro The Bexley Active
RECENTLY DELIVERED CLASS A RENTAL PROJECTS
Adaire
Bolden & Rise at The Boro
Pipeline
Recently Sold
Lumen at Tysons
RENTAL ANALYSIS – CLASS A BUILDINGS RENTAL CHART Period 2016 2017 2018 2019 2020 2021 EST FORECAST
Inventory Bldgs 8 9 9 11 11 -
Inventory Units 2,904 3,299 3,299 4,234 4,234 4,234
VACANCY AND OCCUPANCY CHART Period Vacancy Percent 2016 27.1% 2017 13.9% 2018 5.5% 2019 15.7% 2020 10.2% 2021 EST FORECAST 10.2%
Inventory Avg SF 896 900 900 877 877 -
Effective Rent Per Unit $2,313 $2,367 $2,406 $2,426 $2,177 $2,171
Vacancy % Growth/Yr (9.0%) (13.3%) (8.4%) 10.3% (5.5%) 0.0%
Effective Rent PSF $2.64 $2.70 $2.74 $2.76 $2.48 $2.48 Occupancy Percent 72.9% 86.1% 94.5% 84.3% 89.8% 89.8%
Effective Rent % Growth/Yr (2.0%) 2.3% 1.7% 0.8% (10.3%) (0.3%)
Effective Rent Concessions % 2.7% 2.2% 1.8% 1.3% 2.4% 2.3%
Occupancy % Growth/Yr 9.0% 13.3% 8.4% (10.3%) 5.5% 0.0%
UP OUTLOOK WHAT’S NEXT… The Tysons/McLean submarket is one that has not seen any substantial new condominium product since the last cycle when Park Crest delivered in 2008. The Verse condominium within The Boro, has seen very strong pricing and pace, helping to bolster the strength of the Tysons condo market. The success of The Bexley also demonstrated strong pricing for wood construction product at an inferior location in Tysons. We believe that as Tysons continues to mature, we will see more demand for affordably priced condo product in prime locations, leading to an increase in wood construction mid-rise product in Tysons. 49
URBAN PACE 2021 OUTLOOK Although the course of COVID-19 continues to play a role in the market, there is renewed optimism now that multiple vaccines have been approved and are in the process of being distributed. While the actual timeline for the majority of our region to receive their vaccines is still being determined, the new administration has made it a top priority. As a result, there is anticipation that by late summer/early fall of 2021, we could see significant progress towards getting back to a “new” normal. YOY PRICE GROWTH
MIXED-USE PROJECTS
The year-over-year price growth in the DC region was tracking to outpace 2019 at the beginning of 2020. Despite the dip in the market last spring, the year ended with increased numbers for all product types. With people spending more time at home, demand for “more” for both individuals and families grew. The desire for a den, a larger kitchen, a balcony or more outdoor space were top priorities, and the inventory to meet this demand was lacking. These motives coupled with low rates encouraged multiple offers and made the DMV market competitive.
There has been a steady focus on mixed-use development projects throughout the DC region and many of these projects take years to come to fruition. There are several large projects under construction in Washington, DC, such as City Ridge, The Parks at Walter Reed, and Phase 2 of The Wharf. There are also a variety of projects in the surrounding urban markets in proximity to mass transit that are helping create new dense, walkable neighborhoods. These projects are destinations providing a variety of commercial, entertainment and retail offerings, along with housing options at all price points. Many of these projects have parks, trails and dedicated space for outdoor activities that are even more appealing after COVID-19 and the need for social distancing. The newly completed Phase 1 of The Boro in Tysons is a great example of this, and Phase 2 is in the planning stages. There is a neighborhood feel to these projects that is adding a new element to the community; they are walkable and convenient to both residents and visitors alike.
INVENTORY CHALLENGES The construction and financing challenges during 2020 will certainly impact the pipeline of projects coming to market in 2021 and beyond. The growing demand for housing in the DC region, which is already undersupplied, will cause a greater increase in pricing as 2021 progresses. New construction condominium projects that worked through financing last year will be at a competitive advantage as they move forward and ultimately deliver when there will be pent-up demand. CONSTRUCTION COSTS The construction industry was impacted by COVID-19 throughout all of 2020 and it is expected these challenges will continue into 2021. The ongoing labor shortage and new health precautions caused irreversible delays for projects. On top of that, construction costs for essential materials such as lumber continue to rise, thus making project financing more difficult.
50
THE AMAZON EFFECT When Amazon and JBG Smith announced that Amazon would be coming to Northern Virginia for its second headquarters, there was immediate speculation on the impact it would have on the real estate market. There will be an increase in housing demand with close to 50,000 Amazon workers coming to the region. Developers have been focused on new projects in National Landing along with the surrounding submarkets like Alexandria, the Rosslyn-Ballston corridor, and the Capitol Riverfront.
HOME BUYING SEASONALITY
RETURN TO PRESALES
The traditional seasonality in the residential market completely shifted in 2020 due to COVID-19. The spring market is usually one of the strongest times of the year. There is a spike in activity once the warmer weather hits, as buyers are motivated to move in order to get settled before vacation season in the summer and school starting in the fall. Due to the stay-at-home orders and general economic uncertainty brought about by COVID-19, this shifted to the summer months in 2020. We anticipate with mortgage rates remaining steady, that the traditional seasonal spike could likely return. Signs of increased activity in early 2021 are positive indications for a strong spring market.
We believe that as 2021 brings more vaccinations, more consistent work structure, and renewed confidence in the economy, buyers will again be willing to purchase homes pre-construction. With the severe inventory shortage in the region, we expect to see buyers happy to commit 6 to 12 months ahead of delivery, as was common before the pandemic.
CONTINUED PENT-UP DEMAND The fundamental reasons that consumers had to make a homebuying decision will still be there when this crisis is over. If they needed to downsize before, they likely still will. If they wanted singlelevel living and less maintenance, that will not change. If a family is growing and needs more space, one can only imagine how they will feel after this time of being at home for the majority of 2020. And for those first-time homebuyers who were delaying their decision to purchase, it is possible that spending all of this time in their current living circumstances will prompt them to take action this spring. UNKNOWN VARIABLES
URBAN PACE REMAINS OPTIMISTIC As we all continue to navigate through the unprecedented situations from this year, we are still confident that the DMV will get through this truly unique time and we are looking forward to positive news in our community and real estate markets in 2021. Despite COVID-19 accelerating and magnifying challenges in the real estate industry, we see the opportunity for creative opportunities for both our clients and our team. The past year has shown that we can work, learn, and socialize remotely, but it has also reinforced the vital necessity of in-person interactions and the inherent joy of mass gatherings. In coming years, as technology plays an ever-greater role in our interpersonal lives, Urban Pace sees an endless demand for that vibrant lifestyle that only cities can fulfill. For all these reasons, Urban Pace remains optimistic for the year ahead. We are hopeful that as we return to a “new” normal, the city will reopen and reemerge for all aspects of the real estate community, to be a vibrant and central hub for housing activity.
One unknown variable that will have a direct impact on sales will be the state of the mortgage market as we move through 2021. The start of 2021 began with rates holding at lower levels, as the new political administration began to settle in and implement some new initiatives. Some of those initiatives include the distribution of the COVID-19 vaccine nationwide and stimulus packages to help employers and individuals during these challenging times. Looming unemployment and overall economic recovery will also factor into housing demand. The depth and duration of COVID-19’s impact on the economy is still unclear, but we believe recovery will be steady as we progress through 2021.
51
Urban Pace tracks market activity at a granular level and can provide detailed statistics for any of the submarkets highlighted above. Please contact Urban Pace with any of your overall market information or project specific needs. 1428 U Street NW, Suite 300, Washington, DC 20009 | urbanpace.com | 202-296-1203