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. Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist. Enjoy!
Question: How has Arlington’s single-family housing market performed in the first half of 2021?
Answer: The news has been full of stories and data about the explosion in real estate prices and intense competition for single-family homes across the country. Arlington has been no exception.
This week, we’ll take a look at some charts and data that highlight what we’ve experienced so far in 2021 for single-family homes (SFH) in Arlington.
Overview: Prices Up, Listing Activity Up, Inventory Down
The year-over-year median price for SFHs increased 8.6% in Q1 and 20.6% in Q2 (remember Q2 2020 had end-to-end strict COVID lockdowns) with both quarters exceeding a median price over $1.1M — the first time that has happened in any quarter in Arlington. If you want to skip 2020 because of COVID, Q1/Q2 median prices in 2021 were up 17.4% and 21.1%, respectively, compared to 2019 median prices.
After back-to-back years of below-average listing volume, the number of SFHs listed for sale in the first half of 2021 exceeded 900 homes for the first time since 2017 and ended up well above the 10-year first half average of approximately 860 homes listed for sale during the first half.
Despite strong listing volume, active inventory hit a 10+ year low due to demand outpacing new supply. We finished Q2 with 1.3 months of supply — about twice as high as Loudoun County, which is struggling tremendously with inventory levels.
Bye-Bye Affordability
Of the six ZIP codes with enough SFH supply to generate reliable data (22206, 22209 and 22213 don’t have enough SFH sales), only one had an average sold price below $1M, compared to four in 2019!
One of my biggest takeaways from the 2021 market so far is just how quickly prices have increased in the least expensive neighborhoods. The two ZIP codes with the lowest average SFH price, 22203 and 22204, increased by 16.8% and 20.7%, respectively, from the first half of 2020, while the four most expensive saw increases ranging from 0.4% to 8.8%.
In 2020, the average home in 22201 (most expensive ZIP code) was 95% more expensive than the average home in 22204 (least expensive ZIP code). In 2021, the gap closed quickly with the average 22201 home being 62% more expensive than the 22204 average.
Price Distributions Skew High
While the largest volume of sales still falls in a sub-$1M range, the price distribution in Arlington skews high. Despite the high average/median prices, Arlington doesn’t have much of an ultra high-end market, with just three sales over $3M and just two SFH sales over $3.5M in the last five years.
Prior to this year, the percentage of sales under $800K was always greater than the percentage of sales over $1.5M. In the first half of 2021, not only were there a higher percentage of sales over $1.5M but the number of sales over $1.5M nearly doubled the number of sales under $800K!
Demand Intensifies
Arlington had more time than other markets to adjust to such intense demand because the market really took off after Amazon announced plans for HQ2 in November 2018, but the pressure of COVID and low interest rates have intensified that demand.
The number of homes sold within one week and the numbers of homes sold at or above the asking price both exceeded 60% of total sales for the first time.
Looking forward, it’s hard to see market conditions changing too dramatically any time soon. Things have slowed down a bit off peak demand as is usually the case in the summer and around the holidays, but I expect another strong fall season and a quick pick-up in January/February 2022 from a holiday lull.
If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].
If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at 703-539-2529.
Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.
Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. 703)-390-9460.