Wednesday, April 2, 2008

Bethesda market is steady despite housing slump

Apartments and condos are still renting, selling

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Despite a nationwide housing slump, apartment and condominium sales in downtown Bethesda are steady, according to sales managers and industry experts.

New projects in Bethesda are filling their lofts, condos and apartments in spite of the nationwide trend, and the Montgomery County Planning Board continues to approve new complexes for the area.

Upstairs at Bethesda Row, part of the Arlington East project along Arlington Road between Elm Street and Bethesda Avenue, is slated to welcome its first wave of new residents later this month, according to property manager Lalitha Suresh. She said 30 percent of the building’s 180 apartments have already been rented, and she expects the number to rise over the next three months.

‘‘Given the current housing market, we have done pretty well,” she said. ‘‘It’s not an exceptionally high number [of units filled] but it’s pretty good at this point.”

Rent prices range from $2,200 a month for a one-bedroom apartment to $3,600 a month for two bedrooms.

Suresh said the number of rented units is especially noteworthy since patrons haven’t even seen the finished units.

Retail space under the apartments is near capacity, with a slew of shops and restaurants set to open.

While the Trillium project —173 high-end condominiums at the site of the Clarion hotel on Wisconsin Avenue, near Battery Lane — is not slated for completion until 2010, buyers are already buying the units, which range from $500,000 to more than $3 million.

Patrick Healy, managing director of sales and marketing for the project, would not say how many units sold so far, but did say Trillium’s investors were pleased.

‘‘We’re very happy with where we are now,” he said. ‘‘There are some styles of units we’re almost completely sold out of.”

More than half of the units sold are worth more than $1.25 million, Healy said.

Healy said one advantage of the Trillium is that the building won’t be ready until 2010. He said that allows prospective buyers to wait out the housing slump and move in down the road.

‘‘We don’t see ourselves in the current market,” Healy said. ‘‘The empty nesters who may be moving in are willing to wait a year or two, and don’t need it now.”

Calls were not returned by another upscale project in downtown Bethesda, Lionsgate, which is located at the corner of Woodmont Avenue and Old Georgetown Road and is slated for completion this spring.

The reason for downtown Bethesda’s resilience in the apartment and condominium market is multi-faceted, according to Kenneth Wenhold, a Washington-area housing market expert.

The combination of good schools and Metro-accessibility, among other things, allows Bethesda to avoid the normal waxes and wanes of the housing market, he said.

‘‘Bethesda is very desirable, and will almost always fair better than other suburban areas,” Wenhold said.

What also helped Bethesda, Wenhold said, is that it didn’t over-expand during the condominium boom of 2005. Areas similar to Bethesda, like Arlington and Alexandria, Va., built tens of thousands of new apartments and condominiums in the past three years, and some buildings are now struggling to stay afloat.

According to Planning Board documents, nearly 1,500 new units have been approved for downtown Bethesda and are slated for construction or completion in upcoming years.