AvalonBay Communities, Inc., recently finished the first of 407 apartments at Avalon White Plains, a new high-rise and townhouse project near the commuter train station in this edge city.
Just two blocks from the restaurants and movie theaters on Main Street, the apartments are also within a 10-minute walk to more than 1 million square feet of retail space at two major shopping malls. The property is also certified for energy efficiency by the New York State Energy Research and Development Authority.
Most apartments rent for more than $2 per square foot, with prices ranging from $1,822 for a 540-square-foot studio to $3,975 for a 1,528-square-foot three-bedroom unit.
Developers won't open a single new apartment here in 2008. That's not much different from 2007, when they only opened 235 apartments, an increase of barely a quarter percentage point to the local inventory, according to Reis, Inc.
But even with scant new production, the percentage of vacant apartments will still rise to 6.5 percent by the end of the year, up from 6.1 percent last year. The area continues to lose population at the rate of a few thousand per year, according to Census data.
Next year, developers plan to open 429 new apartments, pushing vacancies up to 6.8 percent.
The apartment market in Washington D.C. isn't feeling much of a housing downturn. Effective rents will grow 3.6 percent in the area in 2008, according to Reis, Inc. That's a strong increase, though still less than the 6.4 percent gain last year.
Housing prices are also still relatively high in the area. Earlier this year, D.C. was one of the last major markets where sale prices for homes and condominiums were still twice their levels in January 2000. Prices finally dropped to just below that level in May, according to the S&P/Case-Shiller Home Price Index.
Apartment investors are drawn to the relatively strong market. More than $1 billion in apartment properties sold in the District over the 12 months ending in the second quarter at an average price of $193,000 per unit and a cap rate of 4.5 percent. That's one of the lowest average cap rates in the region, beating even Manhattan's 4.9 percent, according to Real Capital Analytics.