Ask Eli

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 Arlington’s condo market perform in 2020?

Answer: I ended up writing a lot about the condo market during the second half of 2020 because of the historically high number of units listed for sale from July to November, falling demand and falling market values (compared to the first half of the year). However, there were slightly positive signs in the last month of 2020 and early weeks of 2021 that the negative trends are reversing. Despite a second half that looked very different from the previous three years, 2020 overall was still a strong market for condos in Arlington. Let’s take a look at how things played out…

Prices Up, Volume Down, Pace Mostly Unchanged…

The average and median price of condos increased by 4.2% and 6.3%, respectively, a strong performance but a bit short of the nearly 8% growth in 2019. I wouldn’t be surprised to see no appreciation or slightly negative appreciation in 2021 as a result of changing housing priorities from COVID-19.

Despite the late surge of condos listed for sale, the number of condos actually sold in 2020 dropped 8.3% from 2019 and 19.3% compared to 2018.

The speed of the market remained relatively unchanged, with average days on market staying put at seven days and median days on market decreasing slightly from 19 days to 18.4 days. However, my preferred “speed” metric, the percentage of units selling within one week, dropped to 48% in 2020 from 52% in 2019 — but it’s still well above 29% from 2018.

Six Interesting Charts

Below, I put together a series of charts to visualize how the Arlington condo market performed in 2020 and how that performance compares to the 2015 to 2019 markets.

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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 Arlington’s single-family housing market perform in 2020?

Answer: Despite the pandemic, the single-family housing market produced strong growth locally and nationally, primarily due to interest rates setting record lows throughout the year and a sharp change in housing criteria due to ongoing work/school-from-home demands. While Arlington experienced strong growth, less expensive markets farther from D.C. saw sharp increases in demand and explosive growth.

More Expensive…

In Arlington, the average and median price for a single-family home increased by 4.9% and 5.7%, respectively, after similar increases in 2019. The growth showed up in all ends of the market, including Arlington’s most expensive homes, with another record-shattering year for the number of $2 million to $3 million homes sold. Only 17% of single-family homes sold for less than $800,000 and about half of those were tear-downs or required major renovations.

Volume Still Down…

Despite a very slow rollout of homes for sale in the first half of the year due to lockdown measures and pandemic fears, market volume caught up quickly in the second half of the year, ending up with 13 more homes sold in 2020 than in 2019, but still approximately 10% lower than 2015 to 2018.

Faster Pace Sales…

Average and median days on market dropped for the fifth year in a row to 7 and 22.2 days, respectively, and the percentage of homes selling in the first week increased for the fifth year in a row, hitting the 50% mark in 2020. The average and median price for a home purchase within the first week on the market was 1.1% and 2% over the asking price, respectively. The takeaway? If you’re searching for a home, be prepared to act quickly and pay above the asking price for something new-to-market.

Six Interesting Charts

Below, I put together a series of charts to visualize how the Arlington housing market performed in 2020 and how that performance compares to the 2015 to 2019 markets.

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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: When should I expect more homes to be put on the market for sale?

Answer: 2020 was an unusual year for housing inventory because we saw so little inventory come out during the spring, when the pace of new listings peaks, and an explosion of listings, especially condos, from late summer through the holidays. You can check out column I wrote that visualizes how unusual 2020 was for housing inventory in Arlington. Even though my analysis in this column and previous columns focuses on Arlington, similar patterns show up and can be applied across the D.C. metro.

It is much more likely that the pace of new listings will follow a more traditional pattern this year, with the number of homes listed for sale increasing steadily from now to the spring, peaking for about mid-March to mid-May, and then dropping steadily through the rest of the year, with a brief post-Labor Day spike.

Weekly Pace of Listings, by Housing Type

I’ve always shared and seen monthly breakdowns of listing inventory, so I thought it would be interesting to break it down a bit further into a weekly chart and see if there’s a noticeable difference in the seasonal pace of new listings of single-family homes/townhouses and condos.

The following chart does just that and pulls data from the five years spanning 2015 to 2019. (I threw out 2020 because it’s an anomaly.) The weekly percentages represent that week’s share of total annual listings. Note that the data for the first and last weeks of the year aren’t always full weeks because of how Excel calculates weeks.

As it turns out, the pace of listing inventory for single-family homes/townhouses and condos is nearly identical throughout the year, aside from a slightly higher pace for single-family homes and townhomes in the middle of the spring and a slightly lower pace for single-family homes and townhomes during the dog days of summer.

What can buyers looking for a home in 2021 take away from this chart? You can expect a significant increase in listings beginning around mid-February, buckle up for the most options in April and May, plan your vacations in July and August, look-out for the post-Labor Day surge, and hopefully you’ve found your dream home by the holidays!

Weekly Pace of Listings, by Year

The pace of new listings remains pretty consistent year-after-year, as shown by the chart below. There were only a handful of weeks with unusually low listing activity, compared to previous years. I’m guessing there was major weather activity during those weeks that caused some homeowners to delay or accelerate their listings by a week or two to avoid the drag of bad weather.

The consistency you see in the five-year chart below is also reflected in longer (10- and 15-year) charts, but those get a little too messy for display.

Weekly Pace of Listings and Contracts

The pace of listing inventory and contract activity is highly correlated. The “chicken or the egg” question is whether more/less listing activity drives more/less contract activity (demand), or does demand dictate listing activity, or do buyers and sellers just have similar patterns of behavior and thus the pace of supply and demand naturally correlate?

I think that it’s mostly due to No. 3, a natural correlation of behavior patterns that cause the pace of supply and demand to move in tandem. This is also supported by data, like the new-listing-to-new-pending ratios not being very seasonal.

Using the chart below, one could even make the argument that the best time to list a property for sale is the last two to three months of the year, when the pace of contract activity (demand) consistently exceeds new listings (competition). However, I’ve analyzed “success metrics” like days on market and sale-to-ask-price ratio based on the month a property is listed and overwhelmingly found that February to May/June produce the most favorable results for sellers.

I hope these charts were interesting and helpful to you! 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 DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. 703-390-9460.

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: Do you expect mortgage rates to increase in 2021?

Answer: Happy new year everybody! Historically low mortgage rates in 2020 were one of a few factors that drove real estate prices up across the country (except in the condo market). This time last year, the Mortgage Bankers Association and Freddie Mac each predicted that rates would remain near 2019 levels through 2021, with an average 30-year fixed rate hovering around 3.7% to 3.8% through that period.

As it turns out, rates averaged about a full percent less than those projections. Rates fell consistently throughout the year, except for a brief but sharp increase in mid-March when markets went crazy with the first news of COVID-related shutdowns, until the Fed stepped in with liquidity.

Below are some charts from Freddie Mac showing average mortgage rates over the last 50, 10 and one year.

Average Mortgage Rates Since 1971

Average Mortgage Rates Since 2010

Average Mortgage Rates in 2020

Rates in 2021+

The Mortgage Bankers Association and Freddie Mac each predict that 30-year fixed rates will increase slightly in 2021 and hover around 3% to 3.2% in 2021. Beyond 2021, the Mortgage Bankers Association sees rates averaging 3.6% in 2022 and 4.1% in 2023.

An increase to 4% or higher mortgage rates will likely cause the rapid appreciation we’ve seen over the last couple of years to slow down, but I don’t think it will lead to a pull-back in prices unless it is combined with a migration from the DC Metro due to major changes in telework policy.

If you’re considering purchasing in 2021, I wrote a column in 2019 about my favorite mortgage programs that you might find helpful. If there’s anything I can do to help you prepare for a purchase, don’t hesitate to email 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 DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. 703-390-9460.

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!

Happy holidays to you and yours! I hope you are finding new ways to enjoy the season and connect with family and friends this year. I’m going to keep my final post of 2020 light and take a look at the most expensive sales in the DMV in 2020, something we all enjoy doing!

Despite its Missing Ultra High-End Market [sarcasm], Arlington boasts the most expensive sale in the DMV in 2020, by a LOT, with the sale of a massive estate along the Potomac River for $45 million. This price tag earns the new owner over 31,000 square feet of living space, 3.2 acres, a 30-car garage and gorgeous views of the Potomac River.

Top 5 Most Expensive Sales in Arlington

Arlington’s five most expensive sales in 2020 include the region-leading $45 million sale mentioned above and four sales ranging from $2.88 million to $3.35 million, including two condos in Rosslyn’s iconic Turnberry Tower.

Top 5 Most Expensive Sales in Alexandria

Alexandria’s five most expensive sales in 2020 include four homes in Alexandria’s new waterfront condo and townhouse community, Robinson Landing, and one incredibly unique single-family home on ¼ acre in the heart of Old Town (pictured below).

Top 5 Most Expensive Homes in Fairfax County

Fairfax County’s five most expensive sales in 2020 include three homes in Great Falls and two homes in McLean ranging from $5.6 million to $24 million. Pictured below is what $7 million gets you in Great Falls — over 20,000 square feet, 5 acres, and stunning landscape and architectural design.

Top 5 Most Expensive Homes in Loudoun County

Loudoun County’s five most expensive sales in 2020 include sales ranging from $3.75 million to $16 million. At a price tag of $16 million, you could have secured a 1,550-plus acre cattle farm in Upperville, surrounded by vineyards and a short drive to Middleburg.

Top 5 Most Expensive Homes in Washington D.C.

Washington D.C.’s five most expensive sales in 2020 range from $6.1 million to $17.75 million, with Georgetown commanding four of those sales. Want a 10,000-square-foot home with a detached two-car garage and 6/10th of an acre in Georgetown? That’ll run you $17.75 million in 2020.

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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: Can you provide an update on how the condo market is doing?

Answer: Arlington’s condo market began shifting in favor of buyers this summer, after two years of a very strong seller’s market, when historical numbers of condos began hitting the market at the same time demand subsided. I’ve written about these changes four times since (falling values, visualizing high inventory, first signs of a trend, and first signs of a shift).

November Might Be a Turning Point

For the first time since June, we’ve seen a reduction in the Months of Supply (MoS) of Arlington condos. Months of Supply is a great measure of supply and demand (lower MoS = stronger market with higher demand and less inventory).

While the reduction in MoS is slight, it’s a positive sign nonetheless that the market is either closer to finding its level again or may soon show signs of strengthening. However, one month, particularly a winter month, is not enough to establish any real change, we will need to see what the next three to six months bear.

Multiple Key Indicators Show Positive Signs

My hope for a settling or strengthening of the condo market is not solely based on one metric. There are other key metrics that suggest November may be the first month of a settling or strengthening condo market.

Absorption Rate (Figure 2), a measure of demand, increased ever-so-slightly in November, the first increase since May, albeit still down nearly 68% from the December 2019 Absorption Rate.

The number of condos for sale during November decreased for the first time since May (Figure 3), albeit slightly. The better news, however, is that the decrease in total condo inventory doesn’t seem to be caused by frustrated sellers pulling their condos off the market, rather due to promising contract activity (Figure 4), which was up 41% year-over-year in November.

Looking Ahead, Eyes on March to May

Over the next few months, I’ll be looking closely at whether these trends (stronger demand, falling inventory) continue, find a level or revert back to what we’ve seen since this summer. I’ll be particularly interested in what year-over-non-COVID-year numbers look like and if we settle into normal spring activity for inventory and demand.

For example, while the charts above are positive indicators for the condo market, Figure 5 shows just how much inventory (new listings) is still coming onto the market, with November generating nearly 79% more condo listings in 2020 than in 2019, but only a 41% increase in contract activity.

I think March to May 2021 are going to be very interesting months, statistically speaking, and will be excellent indicators of what the market might look like for the next few years, until the next major market event (e.g. Great Recession, Amazon HQ2, COVID). I think/hope that by then, we will also have a better understanding of how the Federal Government and private companies will address teleworking beyond COVID and thus whether commute time will be prioritized differently by buyers.

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 DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. 703-390-9460.

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 decrease in condo values with all the inventory currently on the market?

Answer: Over the past few months, I’ve written about the shift in the condo market, which began around July and can be attributed to a historical number of units listed for sale while demand simultaneously dropped due to COVID. Indicators such as Months of Supply, Absorption Rate, Days on Market and Sold to Ask Price Ratios have shown a more favorable market for buyers for the last four months, but it takes longer to establish changes in pricing (which requires having enough data).

It’s been my experience working in this market over the past few months that prices seem to be down about 2-5% in many sub-markets, compared to late 2019 and the first half of 2020 (after surging since 2018). However, I dug into the data a bit more to see how condos that went under contract after July 15 compare to the sales of condos that went under contract from January 1 to July 14, 2020. I used July 15 because that is when I really start to see changes taking shape in the condo market.

One point I’d like to make prior to sharing the data findings is that the data is based on condos that have sold/closed, and there are many condos still sitting on the market or under contract that won’t show up in this analysis. The market has also worsened (for sellers) each month since July, so properties that went under contract in July/August likely did better than those later on in the year. Therefore, it’s likely that, as the units close that are currently struggling to sell or just now coming to market, the data will get worse (larger decrease in values).

Data Summary

I chose to segment the market in a few different ways to get a sense of how different sub-markets are experiencing the condo shift. When comparing relatively small data sets (like we have here), the best conclusions can be drawn by analyzing market segments that have lot of similarities, such as condos along the R-B Corridor built in the last 20 years or mid-1900s (older) buildings.

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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: Did the volume of homes listed for sale recover after a slow spring/summer?

Answer: There has been a surge of new inventory coming to market since July. For condos, it has been historically high, by a wide margin, resulting in a 20% increase in 2020 over the 20-year average. While the single-family and townhouse listing volume has also spiked since July, overall, we’re just .5% above our 20-year average.

In July I wrote a column with charts showing how low Arlington’s listing volume was compared to the 20-year average, and I made some predictions that the inventory we lost in the spring/early summer would return in the late summer/fall. This week we’ll take a look at how those predictions played out and dig further into listing volume over the last four months and overall in 2020.

Inventory Comes Back, And More

Historically, March-June bring about the highest listing volume, but this year, due to COVID-19, many homeowners held off on putting their homes on the market. In July, I predicted that a lot of the “missing” inventory from March-June would be listed from July-October, which would result in a delayed spring market.

As it turned out, the number of condos listed from July-October FAR exceeded the amount of “missing” inventory from March-June, by nearly 3 times! For single-family homes and townhouses, July-October listing volume also exceeded the amount of “missing” inventory from March-June, but by a much smaller margin.

In the charts below, missing and excess inventory is calculated off of the 20-year average for monthly listing volume.

Condo Volume at Historical Levels, By a LOT

Just how extreme have the last four months of listing volume been in the condo market? There were 801 condos listed for sale from July-October. Prior to that, the highest four-month listing volume was 650 units from April-July 2004.

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