The D.C. condo market has experienced a stronger-than-normal summer as buyers have sought to take advantage of low interest rates, bringing sales volume and pricing back from the pandemic-induced slowdown.
Sales in the D.C. condo market fell significantly in the spring, with April’s volume down more than 50% year-over-year, according to condo marketing firm Urban Pace. But the market then began to rebound, and the summer months have outperformed last year.
June condo sales volume in D.C. was up 12% year-over-year, July sales volume was up 26%, and volume through the first 25 days of August was 63% higher than the same period last year, according to new Urban Pace data shared with Bisnow.
“August has been incredibly strong,” Urban Pace President Clint Mann said. “To me, that speaks very highly of the resilience of the D.C. market and the fundamentals that are supporting it … it has been a pretty remarkable recovery in a short period of time.”
While sales volume during the worst weeks of the coronavirus pandemic was down significantly from last year, Mann said it gave him confidence that it never fully bottomed out even when D.C. had mandated stay-at-home orders.
“There are consumers out there and the reasons they had to move were still there despite a pandemic,” Mann said. “The pandemic wasn’t changing these fundamentals. And you layer on top of that the historic low interest rates, I think people saw this as an opportunity to get into the market.”
The market has made up for lost time during the summer, which is typically a slower period for condo sales than the spring, Mann said. “Since Memorial Day, most buildings with immediate inventory available are selling at double the sales pace they had projected,” Mann said. “In a normal market, June, July and August are very slow.”
Capital City Real Estate founding principal Scott Zimmerman said sales at the developer’s Peninsula 88 project on Buzzard Point have been surprisingly strong throughout the summer. He said 70 of the project’s 110 units have now sold, and it has been averaging one sale per week during the summer.
“We’ve been pleasantly surprised with the consistency through everything that’s going on,” Zimmerman said. “August is a typically slow month anyway, and we’ve seen it continue to be steady through August.”
While the pandemic has not stopped D.C. condo sales activity, it has changed the habits of many buyers. Mann says buyers are leaning more toward immediate move-ins than pre-sales for under-construction projects, and they are favoring units with more space.
“The majority of the activity in the market in the last 90 days has been focused on immediate inventory,” Mann said. “A lot of people are entering the market because they need to move and want to take advantage of the low interest rates.”
Urban Pace is selling the condos at eNvy, the 127-unit project near Nationals Park from Jair Lynch Real Estate Partners. The building began moving in residents last week, and Mann said the ability for buyers to move in quickly has helped its sales outpace projections this summer. Zimmerman has seen this dynamic in his portfolio.
While Capital City’s move-in-ready Buzzard Point project has been selling, he hasn’t seen the same level of activity at its 74-unit Rialto project on Rhode Island Avenue NE, which is still under construction and began sales this year.
“With the uncertainty of what’s going on, people are moving slower to make decisions further out,” Zimmerman said. “We’re seeing that play out with Rhode Island Avenue, where sales are definitely slower … I think being move-in ready and people being able to see it is benefiting the Buzzard Point project.”
The health crisis has also led people to prefer larger units in communities with more outdoor space, Mann said. He has seen this at The Brooks, an 89-unit condo project Urban Pace is selling as part of The Parks at Walter Reed, a 66-acre development featuring parks and public plazas. He said he has seen new buyers looking at the project that had previously been searching in more downtown areas.
“We’re getting a lot of buyers who had otherwise been looking at Logan Circle, Shaw or NoMa, but they’re looking for more space, and we’re able to provide that,” Mann said. “For the same amount of money you can buy a one-bedroom [downtown], you can buy a one-bedroom with a den at the Parks at Walter Reed.”
He added that the Shaw, Logan Circle and NoMa condo markets remain strong and buyers are still interested in those areas, but they are now broadening their scope to other parts of the city.
Zimmerman said the unit sizes and outdoor space at his waterfront project in Buzzard Point have benefited its sales this summer. “Having larger units and having outdoor space are things our projects typically have, and in the current environment are appealing to people in the city,” Zimmerman said. “Things we felt were benefits before this are more benefits now.” Sale prices in the D.C. condo market have recovered from their April lows, but they are still not as high as they were in January and February.