Condos are a bright spot in D.C.'s market
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D.C. buyers have a little power in the condo market as prices fall and properties sit on the market for longer, according to local experts.
Why it matters: With mortgage rates inching back up to 7%, buyers need to squeeze every ounce of buying power they can.
Yes, but: When you compare Montgomery County to the District, "it really is a tale of two cities a little bit," says DMV real estate agent Avi Adler.
By the numbers: In D.C., median condo sales prices were down 6.7% from May to June — and down 8.5% year-over-year. Meanwhile, in Montgomery County, they shot up 9.7% in one month.
- Condos are sitting on the market longer than usual in D.C., and selling quicker in Montgomery County.
Between the lines: Condo prices are coming down in D.C. because there's only a small pool of people who can afford to buy right now.
- And many buyers are flocking to the suburbs to get more bang for their buck.
What's happening: Mortgage rates and exorbitant condo fees have forced buyers onto the sidelines. And the condo fees don't always align with expectations, Adler tells Axios.
- For example, a brand new luxury building with outdoor space, an in-unit washer/dryer and garage parking might have the same $1,500 monthly condo fee as a no-frills building that requires a lot of maintenance, he says.
The big picture: More buyers have turned to condos and townhouses as home prices surge, Realtor.com analyst Hannah Jones tells Axios.
- Across the U.S., that segment's prices are now climbing at a faster clip than single-family homes, the real estate company's data shows.
Yes, but: Condos are still the more affordable option. The median sales price for a condo in D.C. was $260,606.03 cheaper than a single-family home here, June data provided by Zillow shows.
Reality check: The post-pandemic housing shortage is keeping prices high across the country.
- D.C. is short 134,000 homes for sale.
- "I do feel there's pent-up seller supply… but they feel kind of handcuffed to their current property," Adler says.
D.C.-area condo sales prices rose quicker than single-family homes from May 2022 to May 2023, per the latest Zillow data.
- The typical condo here sold for $303,359.72, up 5% year-over-year. Meanwhile, the typical single-family home was $563,965.76, up just 1.8%.
Yes, but: Condo owners in the city need 3.2 years of income to upsize to a house, according to a March analysis by real estate company Point2.