SPECIAL REPORT: Time to Develop Condos Again in Washington, D.C., Says Expert
- Oct 03, 2008
By Keat Foong, Executive EditorWashington, D.C.—Believe it or not, according to a researcher, now may be the time to begin building condominiums projects again in the Washington, D.C. metropolitan area. Speaking at Delta Associates’ regional economic and market trends and outlook presentation here, Gregory Leisch, CEO, projected that condo inventory in the market will be seven years’ worth by the end of 2008—indicating excess supply by any measure. However, Leisch said that given current condo absorption/reversion rates and supply levels, more than one year hence, the condominium inventory would have declined to levels that are closer to those in the early- to mid-2000s—when prices were increasing. (For example, the condo inventory level in 2005 was one-and-a-half year’s supply.) The evidence, says Leisch, indicates that by 2009 and 2010, there will be a condo price correction in the Washington D.C. metro area. “This suggests to us now is the time to plan for the next round of condo development,” he said. “You heard it here first.” Leisch said that in the last six quarters, 21,000 units were removed from the condo pipeline due to the adverse market conditions: many projects were canceled, and many moved to the Class A apartment pipeline. Delta Associates’ presentation was organized by Transwestern Institutional Multifamily Group, which runs an active multifamily investment sales operation in the local and regional markets.