Why D.C. Condo Sales Are Booming
At the same time, that hasn't kept prices from dropping. New condo prices dipped 3.7 percent in the District, slumped 6.2 percent in Northern Virginia and fell 6.9 in suburban Maryland, according to the Washington Business Journal.
Why are condo sales so strong in the nation's capital, while cities such as Miami and Las Vegas are burdened with years of inventory.
Firstly, with all the government spending, D.C.'s unemployment rate is only at 6.1 percent, almost four full percentage points lower than the national average.
Secondly, D.C. developers were quick to convert condo projects to rentals when the housing market started to soften, taking some of the inventory out of circulation. Other developers may have quickly gone into foreclosure or bankruptcy.
Thirdly, low interest rates and the first-time buyer credit certainly didn't hurt.
More on D.C. Housing: D.C. Housing Market | D.C. Homes for Sale | D.C. Apartments
At the same time, not all of the D.C.-area condo markets are doing very well. Maryland's suburban Prince George's County has a 22 year stockpile of unsold condos at the current rate of sales, while Virginia's Arlington and Alexandria have just a 1.4 year inventory.
But the big question for condo owners new and old is when prices will start to rise again.
Sales are great, but appreciation is better. Or will developers flood the market with new inventory in 2011?