If it seems as if a new apartment is under construction every month in the Washington area, you’re almost right.
Analysts at Apartments.com, owned by CoStar, say the city is among the top three markets in the country for apartment construction, right behind New York City and Dallas-Fort Worth.
Approximately 60,000 new apartment units are under construction in New York City, while 38,000 are being built in Dallas-Fort Worth, according to Julian Spiker, a market analyst with CoStar Group in Washington. The D.C. area has 29,000 units under construction on top of the 13,000 units added to the housing stock over the past year.
“Vacancy rates are extremely low in New York City, and a lot of the available supply is at the extreme upper end of the market,” Spiker says. “In Dallas and other Sun Belt cities, the job growth is enormous and the cost of living is lower than in D.C. and New York, so more apartments are needed.”
Job growth is healthy in the D.C. region, too, he says, but affordability is a big concern.
“Newly built apartments tend to be high-end all across the country, so additional construction doesn’t really address the need for affordable rentals,” says Omeed Naderi, a market analyst with CoStar Group in Washington.
The D.C. neighborhoods with the most new rental developments include the H Street Corridor/NoMa and Southwest/Navy Yard.
“Both of those areas are among the top in the country for the number of new rental units under construction,” says Naderi. “Those neighborhoods are close to Metro stations or the streetcar and are seeing significant retail development, too. The area around Union Market in NoMa is appealing to developers because there was underutilized industrial space that can be converted to build apartments.”
Some suburban areas have an oversupply of apartments. For example, Naderi points to Reston, Va., where landlords are offering incentives such as four months of free rent to attract renters. But city apartments continue to have low vacancy rates, he says, here and in most urban areas around the country.
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