D.C. condo owners become landlords as sales stall
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Many D.C. condo owners are finding it difficult to sell their properties or get strong offers — so they're becoming reluctant landlords instead.
Why it matters: D.C. condo sales have slumped to a decade low, per Bright MLS' year-to-date data as of April.
- Meanwhile, the number of new condo rentals was also at its highest in a decade.
The big picture: This is the culmination of years of challenges, local real estate agents tell Axios.
- People ditched condos during COVID when they wanted more space and didn't need to be in the city for work. Then many laid-off federal employees listed their condos over the past year.
- And condo fees are rising — pair that with higher mortgage rates, and some would-be buyers would rather just rent an apartment, agents say.
What they're saying: If you bought your condo in the last few years and are listing it now, you likely won't break even, says local real estate agent Alison Scimeca.
- Otherwise, you're waiting it out and continuing to pay your mortgage, or just writing it off as a bad investment and taking the hit.
- "What do you have the most tolerance for?" says Scimeca. "There's a ton of emotional baggage with these kinds of transactions."
Reality check: While condo sales are tracking low compared to previous years, sales have been increasing every month this year as of April, per Bright.
Between the lines: Landlord life isn't a breeze, says local real estate agent Joe Himali — you're on call to respond to tenants' needs and have to pay for things like a business license and registration.
- In other words: "Congratulations, you have a new part-time job being a property manager of the property that you really wish you could sell," says Himali.
- And if you offload the work to an actual property manager, they'll take a chunk of your rental income.
The intrigue: Some condo owners are sucking it up and staying put since it's costly to move or sell a property, says Himali, pointing to fees for real estate agents, movers and attorneys.
But Himali says it still isn't a bad idea to buy a condo these days if you're going to hold onto it for a long time.
- His advice: Look long term, make sure you're not overpaying, and "you better darn love the place."
What we're watching: Whether the market shifts soon — which Himali thinks is unlikely.
- "I don't see this changing realistically anytime in a substantive way, unless there's something completely unforeseen."