This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. Please submit your questions to him via email for response in future columns. Enjoy!
Question: How did the Arlington real estate market do in 2019?
Answer: Arlington’s real estate market made the national news cycle more than a few times in 2019 with some pretty extraordinary references to rapid appreciation — some accurate and some not. I’ve seen prices in some pockets of the market surge 15-20% in 2019, but for most of the market, appreciation was strong but not eye-popping.
Overall, the average and median price of a home sold in Arlington in 2019 was $705k and $610k, a 6.3% and 8.9% increase over 2018, respectively. Average days on market dropped by one week and an incredible 61.4% of buyers paid at or above the seller’s original asking price. The number of homes listed for sale in 2019 dropped about 17% compared to 2018 and demand surged, with buyers absorbing about 67% more inventory in 2019 than in 2018.
This week I will dig into how Arlington’s condo market performed in 2019 and next week I’ll do the same for the detached single-family home and townhouse market. I did separate write-ups on the 22202 (Amazon zip code) condo and detached home markets last month.
Arlington Condo Market Performance
First we’ll take a look at some of the key measures for market performance across Arlington and within North and South Arlington. This data excludes age-restricted housing (The Jefferson), Cooperatives (River Place) and townhouse-style condos (Fairlington).
- The condo market seems to have appreciated 7-8% in 2019, after experiencing barely any growth from 2013-2017 and modest growth in 2018
- South Arlington beat out North Arlington in every key category, which makes sense because it’s an easier price point for homeowners and investors who wanted some sort of real estate position in Arlington before Amazon’s hiring picks up
- The average condo buyer in South Arlington paid .8% over the seller’s asking price
Condos in North Arlington sold twice as fast as they did from 2015-2017. In South Arlington they sold more than three times faster than 2015-2016.
Performance of Different Sub-Markets
I took a look at some of the sub-markets that make up large cross-sections of Arlington’s condo market to see how they performed compared to the overall market.
For “standard” 1 BR and 2 BR condos in the Rosslyn-Ballston (R-B) Corridor I specifically looked at condos in buildings constructed during the 2000s condo boom with 650-800 sq. ft. (1 BR) and 950-1,200 sq. ft. (2 BR).
- “Standard” R-B 1 BRs appreciated 4% in 2019
- “Standard” R-B 2 BRs appreciated 5% in 2019
For “older” 1 BR and 2 BR condos, I looked at those constructed in the 1940s-1960s. This category of condos had been slow to appreciate and as of 2018, a lot of owners were still trying to dig out from 2005-2007 prices.
- Older 1 BRs appreciated 7.4% in 2019
- Older 2 BRs appreciated 10.5% in 2019
Performance Within Different Price Ranges
Appreciation in Arlington’s condo market was pretty evenly distributed between the upper, middle and lower price ranges as evidenced by the change in the average price of the lower 25%, middle 50% and upper 25% of sales from 2018 to 2019.
- The average price of the middle 50% of Arlington is now well north of $400k
- Over the last two years, Arlington’s least expensive housing has appreciated the fastest, with the average price of the lower 25% increasing by more than 12% since 2017. You can likely attribute this to investor activity
If you’re curious about the max sold price in 2019 of $4,750,000, it was a top floor 4,400+sq. ft. condo at Turnberry Tower (link). It was first offered for sale three years ago for $7M. If you remove this sale from the data, the upper 25% appreciated 7.4% in 2019.
Inventory Shortage
A lot of real estate conversation in 2019 revolved around inventory shortages. The number of condos offered for sale dropped nearly 21% in 2019 and the increased demand (higher absorption rate) pushed available inventory down by more than 57%. The chart below shows the YoY quarterly decrease in new condo listings and available condo inventory in Arlington.
Looking Ahead
I will be keeping a close eye on inventory levels as this year starts off. Last year a lot of homeowners decided to withhold homes from the market in anticipation of higher Amazon-related appreciation. Now that much of the market has experienced significant appreciation, it will be interesting to see if more homeowners decide that now is the right time to sell. I expect demand will be able to keep pace with an increase in new inventory, but more inventory should keep prices a bit more level this year.
With rates remaining low through last year and projected to do so again this year, couples with a strong employment and stock market, buyer confidence is high. On the flip side, markets usually stagnate heading into an Presidential election so it’ll be interesting to see if/how the election effects counter the current momentum.
I predict that condo values will grow steadily in the 2-5% range over the next 5-10 years, but that no year in the 2020s will outpace 2019. Some possible exceptions to this are major zoning changes by Arlington to allow for more condo development (increased supply), the conversion of some large apartment buildings into condos (increased supply), or a national economic crisis (decreased demand).
Thanks for reading along! If you have any questions or I can be of any help with your real estate needs, don’t hesitate to reach out to me at [email protected]. Next week we will dig into the detached single-family and townhouse markets!
If you’d like a question answered in my weekly column or to set-up an in-person meeting to discuss local real estate, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at www.EliResidential.com. Call me directly at (703) 539-2529.
Eli Tucker is a licensed Realtor in Virginia, Washington D.C., and Maryland with RLAH Real Estate, 4040 N. Fairfax Dr. #10C Arlington, VA 22203, (703) 390-9460.