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: Have you seen a shift in single-family home preferences away from D.C./Arlington further out into Northern Virginia?
Answer: Last week, I wrote about a clear shift in Arlington’s (and D.C.’s) condo market as historically high volumes of inventory have come to market and demand has tapered off. I received some follow-up questions about how the single-family market compares so this week we’ll take a look at some of the trends in single-family detached (SFD) homes in D.C., Arlington, Fairfax County and Loudoun County.
Across all markets, demand and competition for SFD homes is high, but there is a clear shift in preferences for SFD housing further away from the city that we’ve never seen before. Both Fairfax County and Loudoun County have reached all-time highs in absorption and all-time low months of supply.
Suburban Absorption Rate Sky-Rockets
The absorption rate, a strong metric for demand, has almost always been higher in D.C. and Arlington than in Fairfax and Loudoun Counties. An absorption rate of 1.0 equals one home under contract for every home listed for sale and greater than 1.0 means homes are going off the market faster than they’re being put in the market.
The first chart shows a dramatic increase in the absorption rate in Fairfax and Loudoun Counties since June, far outpacing the D.C. and Arlington markets. Loudoun County, the furthest/least densely populated of the four markets was on fire in August, with an already high absorption rate increasing nearly 50% over July.
Check out the difference between the Arlington County and Loudoun County 10-year Absorption Rate in the second and third charts below.
Listing Volume Up Seasonally
One of the trends that stood out in last week’s condo analysis is the historically high volume of listings that came to market in July and August, ranking among the highest of any month in the last 10+ years. While the volume of SFD listings is up in July and August compared to past summer months, volume is still well below peak spring listing volume.
The year-over-year change in SFD listing volume in Arlington for July and August is pretty extreme (see second chart below) simply because of how low volume was in 2019 due to the Amazon HQ2 announcement, but the numbers still fall well below a normal spring market.
Historically Low Months of Supply in Suburbs
Months of Supply, a great supply/demand metric, is something I watch closely to predict price movement. The lower the Months of Supply, the more upwards pressure there is on prices.
Months of Supply for SFD homes in Fairfax and Loudoun Counties has blown through 10+ year historical lows (first and second charts) and shows no sign of slowing down (prices likely rising rapidly), while Months of Supply has tapered off and even increased slightly in Arlington (third chart), a sign that prices might be stabilizing. Months of Supply in Arlington is still way too low to create a buyer’s market where prices might start dropping.
I hope you’ve found this analysis interesting and/or helpful. If you’d like to discuss buying or selling strategies, don’t hesitate to reach out to me at [email protected].
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.