The Washington Post has an article today about the glut of condos in the Washington Metro area. In the new condominium pipeline, there are 20,217 units being actively marketed. In the next three years, 18,867 are in the pipeline for marketing. In 2007, there were 1,487 sales of new units and 4,099 resales.
What's hurting new projects the most are contract cancellations -- when buyers back out of deals.
"A lot of times these projects were sold out. But people would put down deposits and wouldn't go through with the closing," said William Rich, vice president of Delta.
. . .
For sellers, matching developers' incentives, such as closing cost subsidies, can be difficult.
"The developers have a lot deeper pockets than we do," said Jae Lee, whose condo at the Artisan, a 160-unit building in the District's Penn Quarter that was also developed by JBG, recently went under contract after months on the market. "If I try to match them or try to outdo them, I will be losing money."
5 comments:
Check out this craigslist post, I think it speaks for itself. :
$329000 Lowest Price EVER at the Renessaince!!
Reply to: hous-383241636@craigslist.org
Date: 2007-07-27, 12:27PM EDT
Short-sale! Newly Renovated; Granite Countertops; Stainless Steel Appliances; New Maple Cabinets; Amenities include year-round swimming pool and tennis courts; Hrdwd floors; Gated community w/24hr Security; State of the Art Fitness Center; on-site dry cleaning, Get in LOWER than buying directly from the builder! Lowest price 2br in Ren2230 history! Great for investors too, tenanted at $1700/m.
This is a top floor unit with balcony and fireplace.
Check the comps, this is the LOWEST price EVER at this luxury complex! Move in with equity!! Similar units on lower floors listed at $370,000!!
http://washingtondc.craigslist.org/nva/rfs/383241636.html
So, were looking at call it 40k condo units coming online in the next 3 years. With 2k new sales a year normally. By my math, thats almost a 20 year supply, coming up in the next 3 years, on the outside, with 4k a year resales. So, that means the price falls by about 80% or more?
"Of course, DCs different, prices will NEVER fall here."
The Renaissance was renting units for $1,700 seven years ago. I had a bad feeling when they went "condo". I thought there was more of a need for the managed service they provided.
anyone know what the demand for that many rentals is in this area? I know they wont put that many on the market as condos without the market, but this will drive the whole shebang lower.
never mind.
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/23/AR2007032300863.html
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