Sule Aygoren Carranza Sule Aygoren Carranza is managing editor of Real Estate Forum.

WASHINGTON, DC-The metro area’s class A apartment market continues to be a top performer, but the amount of new developments planned and under way could pose a challenge going forward. Always considered a solid market for multifamily, Greater Washington, DC has increasingly exhibited signs of stress since the end of 2006. And according to Delta Associates, things didn’t look much better as this year kicked off, thanks to a growing shadow rental market, condominium reversions, a growing pipeline of supply and weaker job growth.

The region’s year-end stabilized vacancy rate of 3.7% was much lower than the national rate of 5.8%, but represented an 80-basis-point increase over the prior year. As a result, landlords weren’t able to push rents up as aggressively as they have in the past–growth during 2007 was 1.8%. That’s a drastic decline from the long-term annual average rent growth of 4.4%. Owners of class A assets were only able to grow rents by 1.3% last year, compared to 4% the prior year.

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