Healthy economy draws developers and investors into the Washington, DC, Metro area
Positive economic drivers prompt further construction. Since the great recession, Washington D.C.’s minimum qualifying income for the metro’s median-priced home increased 29%, about twice the growth rate of the market’s median household income in general. The gap between an average rental payment and an average mortgage payment has also widened. As homeownership costs continue to rise faster than household income, rental demand will continue. To address demand, developers are adding more options, especially within the District. Deliveries will exceed 1,000 units each in Central D.C., Northeast D.C. and Navy Yard/Capital South. Vacancy fluctuates but remains low as concessions fall. Washington, D.C., has averaged 13,300 completions a year since 2013, well above the 6,500-unit annual average from the previous four years. Though demand remains heightened, the continued period of active development will lift the vacancy rate this year as units lease-up. This movement is nevertheless a small change in a market with relatively stable multifamily performance that has sustained through a large number of deliveries. This is evidenced by the drop in the number of units offering concessions in each class type since March 2017.