After years in which the DC rental market was best known for fast-rising rents, our DC Rental Market Snapshot finds the market is starting to trend toward renters.
Vacancy is up in certain parts of the city due to the increase in new construction.
• Washington added 15,500 new apartment units in 2014 alone. This surge in supply has led to rents across the entire metro region increasing by just 1.4 percent from July 2014-July 2015 – significantly less that the national average increase of 3.9 percent.
• Up and coming neighborhoods such as Shaw, H Street Corridor and Navy Yard are drawing renters away from the traditional areas such as Rosslyn and Georgetown. These new neighborhoods are filling up fast with vacancy rates that have dropped 5 percent year-over-year. Rosslyn and Georgetown have both seen vacancy rates rise by 1 percent since 2014, due to increased competition from other parts of the area and, in Rosslyn’s case, new inventory.
Rental costs are fairly flat with some neighborhoods declining.
• Apartment demand has been resilient in the nation’s capital. The flight to quality is real. So developers are answering by creating amenity laden buildings surrounding live/work/play environments with smaller floor plans that yield higher rents per SF. Rooftop pools, dog-washing stations and private theaters are to today’s apartment buildings what clubrooms were to buildings five or 10 years ago. Although it is worth noting that many of these buildings are also opting for smaller units and higher prices-per-square-foot on the theory that younger renters will opt for a somewhat smaller apartment in a great new amenity-laden building.
• Apartment shoppers might be able to negotiate a negative rent growth in areas such as Ballston and Downtown DC with around 3.0% and 1.9% reduction in asking rent over the past year.
The shift to a renter’s market in DC is a reality. It’s a trend that’s creating opportunities for renters to navigate the market and find the kinds of deals they could only have dreamed of just a year or two ago.