I don’t sell much in DC proper, but last spring I had a 1BD condo listing in Cleveland Park - you can see the actual listing here. My client purchased this very decent 1BD condo in 2006 for $417,000. And then 20 years later we sold it for $377,500. Outch. Can you imagine? You always assume that real estate appreciates, but it’s not the case. Not in DC condo market.
He started selling it the summer before with a different agent for $435,000 - just for a humble increase of 18k over the original purchase price. This unit had a parking space, a large storage unit, a great floorplan. The view wasn’t great - another building, but there are plenty of bad views in a built-up city. This condo wasn’t charming, but it was convenient, spacious, newer. When I took over the listing we set the price of $419,900 - just a tad over the original sales price, and then we dropped to $399,900 and then we dropped to $379,900. There were quite a few open houses with no visitors. Not a single person came. I couldn’t believe it.
My client could’ve rented, but with DC pro-tenant laws it’s a risk. He wanted the money for the next chapter of his life.
So what’s happening? DC condo market has been slowly deteriorating since COVID and in the last couple of years it’s gotten quite bad. There are 8.5 months of inventory of 1BD condo listings. It is my personal opinion that 2 months of inventory means a balanced market - 8.5 months is a clear buyer’s market and unless you have a unicorn of a condo - it’s not going to sell for the price you think.
Why is it so bad? Many reasons - pro-landlord tenant laws are scaring away investors, young people aren’t buying any more - they are renting instead, high interest rates makes buying unattractive. I’m sure there are others. I don’t know what DC is going to do about it. I think incentives would help.
My client’s story is not unique. I just looked through the condo sales in DC for the last month and most listings are selling for less than they were purchased for. Yikes.
So if you have one of these - do you hold on? Cut your losses and get out? Rent it? It really depends on your situation. Call me if you’d like to talk through it.
