PRIME URBAN CONDO MARKET TRENDS

2022 New Construction Pricing

The chart below plots condo submarkets that had significant new construction sales activity by price, price per square foot, and volume. The Southwest Waterfront had the highest average price per square foot at $1,410 due to December settlements at Amaris, Hoffman & Associates’ latest development at The Wharf, and the highest-priced condo project in DC to date. West End’s average sale price was $2.6 million thanks to two ultra-luxury projects selling their last units, 2501M and Westlight. Similarly, Rosslyn was carried single-handedly by strong prices at Pierce, Penzance’s ultra-luxury high-rise with views of Washington, DC. Alexandria had the most sales of any submarket with 141, and the waterfront sites of Muse and Robinson Landing pushed its average price per square foot to $947. Eckington led the way in DC with 67 sales. With no more new construction projects recording sales in Bethesda, Chevy Chase, or Rockville, Silver Spring was the only Maryland submarket to have settlements in 2022. All 22 of its sales were at Kadida Development Group’s office-to-residential conversion, Elan.

2022 New Construction Condo Pricing

Condo Price Psf By Construction Type

In 2022, prices for new construction condos in DC were flat at $664 per square foot, while resale condos increased 2% over last year to $613 per square foot. This squeezed the per-square-foot premium for new construction product down from 11% in 2021 to 8% in 2022.

Remarkably, resales of units built or renovated within the last ten years fetched $672 per square foot, $8 more than new construction, though this was largely a function of smaller average unit sizes (962 square feet versus 1,032). These higher-priced units make up 40% of all resales in the District, boosting the average price of resales substantially.

The average absolute price of a new condo in DC increased 4%, while resale prices decreased slightly, stretching the spread between the two from 15% in 2021 to 20% in 2022. Considered in combination with the persquare-foot figures, this pricing data illustrates the depth and quality of DC’s inventory of recently built and newly renovated condos.

The premium for new construction is much higher in the primary submarkets within Maryland and Virginia, but that figure is not usefully significant given the makeup of the sample. These areas are less densely developed than DC, build fewer condo buildings each year, and thus have a larger age difference between new construction units and resales. While recently built or renovated units make up 40% of resales in DC, in Maryland and Virginia submarkets they are 25% of the resale stock. This smaller sample size and greater variance in quality and age leads to a larger price premium for new construction and greater variance in that spread year-to-year.

In 2022, new condos in Maryland sold for 62% higher per square foot than resales, but there were only 22 new condos sold (just 3% of the total) and they were all at Elan, an officeto-residential conversion positioned as an affordable option for first-time homebuyers.

In Virginia, 218 sales of new condos were recorded, and the premium over resales was 114%. Of those 218 sales, 61 were at Muse, Pierce, Robinson Landing, or Venue—each either an ultra-luxury projects or offering waterfront views—and eclipsed $1,000 per square foot. These prices reflect the exceptional nature of the locations and views, but they are not representative of the entire submarket and distort any comparison between Alexandria and DC proper.

New Construction Sales By Unit Type

After a few years with numerous luxury projects on the market, 2021 and 2022 have had a varied group of commodity buildings recording sales. This shift in product grade provides more significant insights into the value propositions consumers are selecting. Since 2020, the most notable changes in pricing by unit type are significant price growth in large units and notable price resilience in units with dens. Two- and three-bedroom units have both seen prices climb by 15%. One-bedroom-and-den units increased 8% and two-and-dens have been level. One-bedroom units and studios have dipped considerably.

While urban condos have been trending toward more efficiently sized units for some time now, the pandemic changed the role and use of homes and spawned new needs and preferences among consumers. Chief among these new needs is additional flex space for working, exercising, or other activities that often take place at home now. In high-priced markets like DC, dens can be something like a Goldilocks solution, offering residents more functional space without the significant jump in price that comes with a full second bedroom. The growing consumer preference for dens may be a lifesaver for owners of struggling downtown office buildings who are considering converting to residential. The deep floor plates of office buildings often result in windowless rooms that once appeared to consumers as an ugly compromise. Now, they may see value.

Change In Price Per Square Foot Since 2020

Change In Price Per Square Foot Since 2020

Condo Fee Analysis

Condo fees have increased steadily over the past few years. Starting at $.54 per square foot in 2019, fees climbed $.02 per year in 2020 and 2021 before jumping $.05 in 2022 to $.63 per square foot. These increases were driven by a confluence of factors, including inflation and labor shortages that have increased the cost of maintenance and staffing. Some of the same economic forces that have escalated the costs of new construction have made maintenance projects and repairs more expensive. The amenities arms race between large, new multifamily buildings has influenced some condo programs as well, especially given the way consumer preferences have evolved post-Covid-19. In recognition of the increased costs of ownership, there is a growing trend among some developers toward scaled-down amenities in condominium buildings, with the aim of lowering monthly fees.

Note: The previous charts include all Bright MLS data for 2021 and 2022. Urban Pace pulls, reviews, updates and corrects this data throughout the year on a weekly basis to increase accuracy. In addition, we augment the data by adding in new construction data from our proprietary database, making these numbers the most comprehensive representation of activity in the market. 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.

Upvelocitytm Heat Map 2022 Volume By Units For New Construction Condominiums

Urban Pace tracks the new construction condo market in the DMV meticulously, collecting and processing data from several sources. This granular approach to our research and analysis allows us to provide our clients with customized reports ranging from high-level market trends to targeted data for a submarket or specific site.

UPVelocityTM is Urban Pace’s proprietary database that is updated in real time and has data visualization capabilities such as the heat map above, which shows where sales of new construction condos are concentrated. Among the busiest submarkets are Eckington, Navy Yard, Petworth/Takoma, Shaw, Trinidad and Carver/Langston, Alexandria, and the Rosslyn-Ballston Corridor. The final section of this report features submarket summaries that provide a detailed snapshot of the new construction projects in each of these neighborhoods, the region’s most active submarkets for new condo sales.