Since the middle of 2006, the frenzied condominium market here and in several other big cities like Las Vegas, Miami and Boston has collapsed. Once roaring sales have slowed to a trickle, sparse inventory has mushroomed into a glut and soaring prices have flattened out and started falling.This development, originally proposed as condos, in the DC area is now becoming apartments:
After six weeks of failing to lure more than a couple of dozen buyers, Mr. Franco and his partner, Jeff Blum, joined the builders of nearly 6,000 condominium units in the Washington metropolitan area who have decided in the last three months to recast their projects as rental apartment buildings.Below, we are told of a condo owner wanting to sell their unit but can only get somewhat less then the original 2004 purchasing price.
Take the owner trying to sell a spacious two-bedroom condo for $879,000 in the former Columbia Hospital for Women, which closed in 2002, in the Foggy Bottom neighborhood of Washington. In 2004, the investor was so confident that he would make a handsome resale profit that he told his agent, Thomas P. Murphy, he wanted to buy five condos. Mr. Murphy said he flatly told his client he would only assist him in purchasing one unit in any one building.The condo market in the DC area is undergoing serious decline as the number of sales has plummeted and prices have dropped. The average sales price for a condo unit in December 2006 compared to December 2005 [these are ones listed through the MLS and does not include many condos such as those sold directly by developers].
Could he rent the condo? Yes, but that option is not appealing, either. Mr. Murphy estimates that the unit could rent for $4,000 a month, far short of the $6,800 a month the condo costs in mortgage interest, maintenance fees, insurance and taxes.
"They have a choice of how they want to lose it," Mr. Murphy said of investors and condo developers. "Drip by drip or in one slap."
Montgomery County : -7.1%
Washington, DC: -7.9%
Fairfax County: -4.0%
Loudoun County: -4.4%
The condo market in the Washington, DC area will continue to decline due to the growing inventory and the lack of investors. Expect further price declines in the Washington, DC condo market in 2007.