2026 Mid-Year Condominium Market Overview

01

Introduction

The "K-shaped" market, where a thriving high end leaves behind the bulk of the market, is a narrative difficult to counter.

At the top of the market, a new 64-unit building in Georgetown is expected to exceed $2,500 per square foot, and more high-end buildings are in the near-term pipeline. Resales above $1 million saw declines in average days on market. Overall, though, new condominium sales by quantity have stalled, particularly in the District, Arlington and Montgomery. Resales under $1 million, representing 96% of all resales, increased their average days on market by 15 days.

Prince William led the Metro Area in new condominium sales through the first half, more than doubling the District's count. That the exurban jurisdiction, with new condominium sales exclusively from national builders, 93% of which were townhome-style, had the most new sales aptly describes the new condominium market.

Still, mid-market product has proven successful in high-quality locations such as Old Town Alexandria, Tysons, Vienna and Potomac. Well-priced product in desirable locations is an evergreen strategy for success for both local and national builders.

02

Key points

DC Metro Area Job Market

The DC Metro Area's unemployment rate in June 2026 was 4.1%, an increase from 3.9% in the prior year and comparable with the national figure. The Metro Area lost 83,500 jobs from its total employment year-over-year, a 2.4% decline and the largest raw count and percentage decline of all US metro areas. Some softness clearly remains in the Metro Area's job numbers, reflecting continued fallout from the decline in Federal employment that began in 2025.

Interest Rates Eased Early 2026 but are Still High

If we consider the 6% range the new normal for mortgage rates, the first half of 2026 represented some degree of easing from the prior three years. The average weekly rate reported by Freddie Mac briefly fell below 6% at the end of February and did not exceed 6.5% again until late-May.

Data from the National Association of Realtors showed roughly two-thirds of all home purchases in 2025 were financed, and the "lock-in" effect from existing homeowners' mortgages far below current rates continues to stifle resale supply. According to a February report from Redfin, a slowly increasing share (21.2%) of outstanding mortgages have rates above 6%, suggesting more homeowners will be able to purchase their next home at a rate comparable to their current home, though this effect will take many more years to fully unwind.

Metro Area New Condominium Sales Remain Stalled

Total new condominium sales were nearly unchanged from the first half of 2025, though the full year projection is 22.9% below the 10-year average. New inventory is essentially flat from the prior year as well, with 1.45 years of supply actively selling at Mid-Year.

Sales Have Shifted in Location and Composition

The District's new condominium sales count slipped 37% as sales were dispersed through numerous small conversion buildings and no new for sale buildings of scale entered the market. Outside The District, sales of new townhome-style condominiums as a share of total new condominiums fell from 79% to 73%, though the share remained above the 5-year average of 69%. National homebuilders represented 75% of all new condominium sales.

Resales Declined While Days on Market Rose Unevenly

The condominium resale market saw its fifth straight year of declines in mid-year quantity in 2026, falling 3.3% below the prior year. This lengthy streak has yielded a 25% decline relative to the 10-year average. The largest year-over-year quantity declines in percentage terms were in Maryland, with Montgomery falling 13% and Prince George's down 7%. The average resale price ticked up 1.1% on a whole dollar basis while retreating 1.5% on a per square foot basis.

The gap between the original list price and sold price widened in 2026, as seller expectations have not fully adjusted to reflect the softer resale market. This has further contributed to the increase in average days on market, up 14 days (34%) year-over-year. All jurisdictions saw increases, with the mildest increase located in The District (19%). More interesting was the price band where the increases were most severe. Average days on market declined year-over-year in the $1 million and higher price ranges while increasing in all ranges below $1 million, an indication that softness is located in the middle and lower price ranges.

03

Key figures

04

New Condominiums

Product type outside the District

Townhome-style condominiums, which for these purposes encompass two-over-two and back-to-back homes, represented 73% of new condominium sales outside The District. This represents a slight decline from the prior year, which saw townhome-style at 79% of new sales.

The few one-level communities in the suburbs include four active projects in Old Town Alexandria and two higher-end projects in Fairfax: The Lowell and JW Marriott Residences Reston. National homebuilders Pulte and Ryan Homes (a subsidiary of NVR) have also introduced one-level condominium communities throughout the region.

National homebuilders

National homebuilders represented a 75% share of all new Metro Area condominium sales. That reflects both the decline of new sales in central areas, particularly the District, and the diversity of product these builders offer.

Sum varies due to rounding.

Pulte Group's flat condominium product dominated one-level sales in Prince George's, Montgomery and Fairfax. Their design typically includes three or more rectangular buildings with mixes emphasizing two-bedroom and two-bedroom-den unit types. Pulte's corporate gross margin, reported for the period ending June 30th 2026, was 25%, down 200 basis points (bps) but compares favorably with higher revenue competitors D.R. Horton (20.7%) and Lennar (15.6%). Though concessions are reported differently across builders, Pulte's latest reported incentive average was 10.4%, 170 bps higher than the prior year, though lower than Lennar's 12.9%.

Two-over-two base pricing

National builders were also responsible for two-over-two communities throughout the region. Given that two-over-two product is fairly consistent between builders, variation in prices can illustrate the relative value of each project's location. Base pricing for lower- and upper-level units for a sample of currently selling communities is shown on the following page.

* Immediate-delivery pricing; no base prices were advertised.

05

Inventory and supply

New condominium inventory stood at 2,498 units at the end of the first half of 2026. This is essentially flat year-over-year and equal to 1.5 years of supply against projected full-year sales.

06

Interest rates

The early part of 2026 saw the average 30-year mortgage rate lower than the same weeks in the three prior years. Rates even briefly fell below 6% in late February before returning to the mid-6% range by May.

Stubbornly high rates that have persisted since the end of the pandemic make monthly costs to own unattainable for first-time buyers and discourage would-be sellers from listing their homes, as they would have to finance their next purchase at a much higher rate.

07

Multifamily pipeline

The near-term pipeline of for-sale units represents 2.5 years of supply, down from 2.8 in the prior year. A steady number of new sales and a 10% decline in known near-term pipeline units account for the change. Combining known and potential condominium units, for-sale represents, at most, 9.2% of the near-term multifamily pipeline.

Notable multifamily deliveries, 2026

Planned for-sale condominium

08

Total condominium sales

09

Resales

The condominium resale market saw its fifth straight year of mid-year quantity declines in 2026, falling 3.3% below the prior year. That streak has produced a 25% decline relative to the 10-year average. The largest year-over-year declines were in Maryland, with Montgomery falling 13% and Prince George's down 7%.

The gap between original list price and sold price widened, as seller expectations have not fully adjusted to a softer market. This contributed to the rise in days on market, up 14 days (34%) year-over-year. All jurisdictions saw increases, the mildest in the District at 19%.

10

Prime submarkets

11

Market by market

The only jurisdictions to see year-over-year increases in new sales were Prince William and Prince George's. Resale quantities were below 10-year averages in all jurisdictions, as many also saw year-over-year declines. All jurisdictions saw increases in average resale days on market.

The District and Arlington did see year-over-year increases in resale price per square foot, and all jurisdictions remained well above their 10-year average resale PSF.

McWilliams | Ballard