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. Video summaries of some articles can be found on YouTube on the Eli Residential channel. Enjoy!

Question: Can you provide any additional data on what the market will do for the remainder of the year?

Answer: If you have enjoyed my real estate columns over the years, I would greatly appreciate your vote for Arlington Magazine’s Best Of Arlington, Real Estate Agent (in the Home section) and encourage you to support all of your favorite Arlington businesses with a meaningful vote!

Last week I published an article highlighting that the second half of the year is easier on buyers than the first half. This week we can explore some other predictable market trends to help buyers and sellers anticipate the upcoming market.

New Listings to Spike in Two Weeks, Then Fall Sharply

There will be a predictable spike in new listings after Labor Day, proceeded by a rapid decline through the end of the year.

• Just 17% of total annual listing volume comes to market in Q4, with less than 7% of total listing volume over the last two months of the year
• 46% of homes are listed for sale during 1/3 of the year from early March to late June
• The market goes on summer break with everybody else from late June through August
• Note: this chart is for Arlington but the same trends can be applied across the region

Our Q4 Lows Will be REALLY Low

Broken record time… we are experiencing historically low listing volume with sales down 25% from the historical average across the DC Metro. Total listing volume in Q2 (when we have the most inventory come to market) was on par with Q4 volume in previous years (least amount of inventory) so we will likely see just a trickle of homes hitting the market in Q4 this year.

Buyer Activity/Demand Will Also Jump Soon, Then Fall Around Holidays

Along with a pop in listing volume after Labor Day, there’s usually a coinciding jump in buyer showing and contract activity that lasts through mid/late October before nose-diving in November.

But Sellers Will Continue to Reduce Asking Prices

Courtesy of Altos Research, the chart below highlights the annual cycle of the percentage of homes reducing the asking price. The diamond and circular markers represent Aug. 13 of each year and show that we are just past the halfway point of a sharply increasing number of price reductions through the end of the year as sellers fight to attract buyers before the holidays.

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 Eli Residential channel.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C A

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 Eli Residential channel. Enjoy!

Question: Is it better to buy a home in the second half of the year?

Answer: The second half of the year is almost always easier on buyers than the first half. With the exception of 2020, when we had a delayed spring market because of COVID lockdowns, nearly all market metrics improve in favor of buyers in the second half of the year. The only issue… it gets harder to find what you want because listing volume drops significantly.

The table below compares first half market data to second half market data, and I’ve calculated the change of each year’s first half to second half market metrics. A few quick notes about the data:

• I did not include 2020 because it was not a normal market due to COVID lockdown during the spring/summer
• Net Sold = Sold Price less any Seller Credits
• The data is based on when a property was listed (first half or second half of the year), not when it closed, so we can have a true indication of market metrics based on when a property hits the market

Prices Drop in Second Half, Not as Much as Data Suggest

The data point that most people will focus on is the drop in average net sold price from first half to second half with an average decrease of 4.8%. This is a combination of buyers being able to negotiate more and home values actually dropping and less expensive homes being sold in the second half than first half. So yes, market values weaken in the second half, but they are not dropping by 3-7% like the data suggests.

Buyers Negotiate Much More in Second Half

A great metric is the second column, the average net sold to original ask percentage which shows how much buyers are negotiating (or paying more) relative to the initial asking price. On average, buyers are negotiating 1.1% more off the original asking price in the second half of the year compared to the first half. Last year it changed by 3% when interest rates spiked at a historically fast pace from late spring through the fall and the market did a 180.

Sellers Giving More to Secure Deals in Second Half

In transactions that included a seller credit (seller paying buyer closing costs), buyers negotiated an average of 8% more in seller credits in the second half compared to the first half.

Market Significantly Slower in Second Half

From 2015-2022, the number of homes going under contract in the first ten days decreased by an average of 22.3% in the second half of the year to an average of 37% of homes selling within ten days compared to 48% in the first half of the year. The average days on market for homes listed in the second half of the year increased by 26.8%.

Buuuutttt… It’s a LOT harder to Find What You Want

The number of homes hitting the market for sale decreases by 1/3 from the first to second half of the year, making it much harder to find that perfect home. What I usually advise clients is to focus on the first half of the year if you’re looking for the perfect home and focus on the second half of the year if you’re looking for value.

Market Differences Within the Second Half

The market also differs within the second half of the year, with July/August slowing significantly from the preceding months, followed by a pop in supply and demand after Labor Day, until really slowing down for the holidays in November/December.

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 Eli Residential channel.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C A

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 Eli Residential channel. Enjoy!

Question: What impact will the new Toll Brothers community have on the Arlington housing market?

Answer: If you have enjoyed my real estate columns over the years, I would greatly appreciate your vote for Arlington Magazine’s Best Of Arlington, Real Estate Agent (in the Home section) and encourage you to support all of your favorite Arlington businesses with a meaningful vote!

Toll Brothers will open sales of 40 new single-family homes at The Grove at Dominion Hills very soon (projected by this fall) starting in the $1.9Ms (really $2M) and I suspect most of the homes will have a final price tag of $2.1M-$2.3M.

All 40 homes will not be available at once, rather they’ll be released in phases based on the pace of sales, but the addition of these homes to the market will have a significant impact on the supply of new construction homes in Arlington and I expect will put downward pressure on the price of new builds under ~$2.6M.

The Grove Will Be a Big Percentage of New Construction Supply

Arlington has averaged just over 95 new homes sold per year since 2018 (per MLS, which includes most but not all new homes sold) so even if it takes two years for Toll Brothers to release all 40 home sites, those homes will represent a significant percent increase in the supply of new homes in Arlington.

If you look at the sales of comparably priced homes ($2M-$2.4M), The Grove will bring an increase of 60-70% more new builds to market over the next 18-24 months (assuming that’s the timeframe they release all 40 home sites within).

Most new homes in Arlington are located in the 22207 zip code, with 52% of new home sales (275 of 524) since 2018. The Grove is in the 22205 zip code and while it’s just 1.5 miles from 22207 and 22205 also commands premium pricing and shares many of the same characteristics as the 22207 zip code, there’s no data to support whether or not the 22205 market is prepared to absorb 40 new homes at this price point. Of the 73 new homes sold in 22205 since 2018, just seven have closed at or above $2.1M — one more is under contract and three are for sale.

And New Homes Are Already in a Softer Sub-Market

Adding that kind of supply to any market is bound to put downward pressure on prices, but I have no doubt that the market would happily gobble up dozens of 2,500-4,000 SqFt homes in the $1M-$1.5M+ range. However when you get into the 5,000+ SqFt market (I imagine most of the 40 homes will finish with 4,500-5,000+ SqFt) and in the $2M-$2.5M range, you enter into that is already pretty well balance between buyers and sellers, softer than the rest of the housing market, without the inventory from The Grove.

The first chart, courtesy of Altos Research, shows the percentage of homes with a price reduction in the “upper” price range of the Arlington single-family home market, which The Grove community will fall within. Notice the upward trend of price reductions this year highlighted by ~30% of homes reducing price this spring compared to previous spring markets with just 20-25% of homes with a price reduction.

I have seen this play out anecdotally as well with more new builds reducing the asking price or accepting larger discounts from ask than in years past. I would expect this trend to continue as the market adjusts to the Toll Brothers inventory rolling in later this year and in 2024-25.

The Months of Supply (MoS) chart below, a good measure of supply and demand where higher MoS suggests a market more favorable for buyers, shows us that the market for homes with 5,000+ SqFt is very much in balance between buyers and sellers, with about six Months of Supply. Most housing economists say that six MoS is a balanced market, below six favors sellers, and above six favors buyers. For comparison, the overall Arlington market measured 1.4 MoS in Q2 2023.

So this chart tells us that unless demand picks up sharply for large homes, the extra supply added by Toll Brothers will likely push this sub-market (~5,000+ SqFt) into a buyer’s market.

Local/Smaller Builders Will Bear the Burden

Most likely, none of this will matter to Toll Brothers and it will be a problem for their competition (everybody else building in Arlington) to bear. Toll Brothers can afford to wait for premium buyers longer than smaller builders can, Toll Brothers has an exceptionally efficient and proficient sales machine including full-time sales staff, model homes, and a nationally recognized brand, and Toll Brothers can offer incentives smaller builders can’t compete with, most notably through the Toll Brothers mortgage company.

If I was a builder in Arlington, I would be careful over the next couple of years on projects in the $2M-$2.5M range with tight margins.

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 Eli Residential channel.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C A

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 Eli Residential channel. Enjoy!

Question: Do you have any recommendations for ways to reduce the burden of high interest rates?

Answer: Hearing somebody suggest an interest-only mortgage may initially sound like a gimmick and bad financial advice, but for some buyers, an interest-only mortgage might be a great option to responsibly purchase more house within budget, with more control over your payments.

I was recently discussing mortgage options for a client with Skip Clasper of Citizens Bank ([email protected]) and he brought up their interest-only mortgage product so I thought I’d share it here in case it can help anybody else. Most banks attach a higher interest rate to their interest-only product, but Citizens Bank does not (currently).

Standard Mortgage vs Interest-Only

A traditional mortgage is designed so that every payment is a combination of interest and principal, so that the loan is fully paid off after 30 years if you make the same minimum monthly payment each month. In the early part of the loan, most of your payment goes towards interest.

An interest-only mortgage is a loan that does not include any payment towards principal with each minimum monthly payment and thus lowers the amount you pay each month. Any money you pay over your minimum monthly payment goes directly towards principal and you can choose when and how much to make those extra payments. Note that in a standard mortgage, you can also pay additional money towards principal at any time, but you must make the minimum payment, which includes interest and principal.

The difference in payments between the two products isn’t massive because so much of your initial payments on a traditional mortgage are interest, but you can see from the table below that the difference in payments is enough to move most buyers into a new pricing tier (better/bigger home) or to become more competitive in the price tier you’re in (better chance of offer being selected). The table below doesn’t contain a $500k loan amount because the interest rates on lower loan limits are usually too high to justify.

Who Should Consider an Interest-Only Loan

There are a handful of buyer profiles that I think should consider an interest-only mortgage to give themselves more spending power and/or more control of their loan payments:

• Professionals with high bonus/commission compensation structures like attorneys, partners/executives, salespeople, and business owners. The key is making sure that you are allocating money from these windfall bonus/commission payments towards paying down your principal, but it helps keep your cashflow more manageable during the months where you have less or no income.
• Homeowners who have high short/mid-term expenses like childcare. A family with two young kids in childcare may be paying $4,000+ per month and for most families, that cost will go away within a couple/few years. Once those costs drop off your budget, that money can be redirected into paying down the principal, if you haven’t yet been able to refinance into a lower interest payment.
• Buyers where a new job or promotion is highly likely within a few years that will cause your income to increase enough that can start paying down the principal and make up for lower, interest-only payments early on. A good example of this is a couple where one person works and the other is in grad/medical school.
• Buying a “forever home” and you’re finding yourself coming up a short on the budget you need to get into the right home and you don’t want the difficulty of managing higher payments in the first 2-3 years to prevent you from buying what you need for the next 20-30 years. There must be a reliable way for you to be able to be able to start paying down the principal (and catching yourself up) after a few years.

Waiting for Interest Rates to Drop to Refinance

A lot of buyers in today’s market are taking on higher mortgage payments than they can’t afford long-term and counting on interest rates to drop in a year or two so that they can refinance. While the odds are good that there will be a refi opportunity in the next 12-24 months, it’s far from certain and if you can’t sustain your minimum required payment on a traditional mortgage for more than 12-24 months, you’ve got a problem.

For buyers who are willing to take a gamble on a refi, an interest-only loan may be a safer way to wait for rates to drop because if it takes longer than expected, you have more control over how you pay down your mortgage prior to rates dropping enough for a refi.

Fiscal Responsibility is Key

The key to using an interest-only loan is to use it responsibly and have a solid plan in place to make payments towards principal rather than waking up 8-10 years into your loan payments with little to no dent in your loan balance (principal). If you do not trust yourself to do this, don’t even consider taking on an interest-only mortgage.

Qualifying is More Difficult

Interest-only mortgages are a riskier product for banks, so the lending standards are higher than a traditional loan. For most banks, you must qualify based on a 20yr amortization payment scheduled instead of a 30yr, meaning your debt-to-income ratio must be a lot stronger. Most banks also require you to have a significant amount of reserves after closing (retirement funds can usually be applied) and you need at least 20%-25% down.

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 Eli Residential channel.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C A

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 Eli Residential channel. Enjoy!

Question: What is the normal commission rate for a Realtor who represents a buyer in Arlington?

Answer: There has been a long-held belief that real estate agents should avoid public discussion of commissions because of antitrust laws and ethics violations, but now that many public-facing real estate websites (e.g. Zillow and Redfin) are publishing buyer-side commissions, not to mention recent efforts by the National Association of Realtors and our local MLS (BRIGHT) to open-up transparency. I’ll make an annual column out of the data on buyer-agent commissions.

The data and charts below represent the buyer-side commissions published in the MLS for transactions in Arlington, sans any subjective commentary that could get me in trouble. I don’t have access to listing-side commission data, so you’re only seeing commission data for one side of the transaction.

How Are Commissions Determined?

In most cases, commissions are set in the Listing Agreement between the seller and the seller’s real estate agent. A total commission fee is established, with a disclosed amount going towards the agent/broker representing the buyer of the home. That buyer-side commission is published in the MLS. Buyer agents may establish minimum commissions or other fees in their Representation Agreement between them and the buyer (PSA for buyers: be sure to ask about these minimums or fees when selecting your agent or reviewing your Agreement).

Buyer Agent Commissions Down 12% Since 2015

In 2015, buyer agent commissions averaged 2.89% across all transactions in Arlington. As of 2022, the average buyer agent commission in Arlington dropped by 12%, to 2.54%. The average commission dropped by 6% from 2017 (2.81%) to 2019 (2.65%).

Buyer Agent Revenue Flat for Past Decade

Setting aside the historically high volume of real estate transacted in 2021, revenue (calculated by sales volume multiplied by the average buyer agent commission percentage) to brokerages covering buyer-side transactions in Arlington has remained fairly flat since 2015 (and earlier) because higher sales volume (driven by higher prices) has been offset by lower commission fees.

Broker/Agent revenue in 2023 will drop as significantly as it increased in 2021 due to low sales volume in 2023.

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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. Video summaries of some articles can be found on YouTube on the Eli Residential channel. Enjoy!

Question: How was the market for condos in Arlington during the first half of the year?

Answers: The condo market loves stability, often it’s a bit too stable for most condo owners (low appreciation), so after a wild ride from 2019-2021, we can finally say with a high level of confidence that the Arlington condo market has found its level in the wake of Amazon HQ2 (rapid appreciation) and COVID (supply surge and depreciation).

The data below is based on the sales of apartment-style condos in Arlington during the first six of of the past five years. Note: I filtered out new construction data because it throws off the readings on actual market trends and gives a distorted view of pricing in 2021 (mostly due to 2000 Clarendon sales).

Average Prices Down Slightly

I’m generally not a big fan of using $/SqFt because it can throw off so many false readings, but in this case, I think $/SqFt is a more reliable way of reading the year-to-year price trends of the market than average sale price, but both readings indicate pretty similar market conditions over the past five years.

• The average price for a 1 BR decreased by .6% to just over $375,600 and the average $/SqFt decreased by 2.5%
• The average price for a 2 BR decreased by 1% and the average $/SqFt decreased by 3%
• Overall, prices have changed very little since the Amazon HQ2 bump in 2019, with just 1.6% appreciation for 1 BR in the last five years and 6.9% for 2 BR on an average price basis, and a 2.7% increase for 1 BR and 3.8% increase for 2 BR on a $/SqFt basis
• On average, condos are selling for just under their original asking price
• Keeping up with the market-wide trend of low supply, sales volume in the first half of 2023 came in just higher than 2020, when the market froze for Q2. 2023 sales are down well below the first half numbers over the rest of the decade.

• Just over 50% of condos are selling within the first ten days on market
• Just over 50% of condos are selling for at or above their original asking price

(more…)

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 Eli Residential channel. Enjoy!

Question: How was the market for single-family homes in Arlington during the first half of the year?

Answer: All it took was 7% interest rates to stabilize prices… which is exactly what the Fed’s goal was and the Arlington single-family home market is a great example of it working. Coming into the year, there were signs that prices would fall in 2023 if rates remained high, but due to a historic supply squeeze, prices remained stable despite a significant drop in demand (the drop in supply was more significant than the drop in demand).

The data below is based on sales of single-family homes in Arlington during the first six months of the past five years.

Competition Eases, Prices Stabilize

The Arlington single-family market will always be competitive, but the intensity of the last two years has softened and brought some stability to prices:

• The average home price increased by 2.3% to over $1,360,000 and the median price increased by 1.7% to $1,220,000. If you remove new construction sales from the data, the average sale price actual decreased by .6% to just over $1,241,000.
• Over the past five years, the average home price in Arlington has increased by nearly 27%
• On average, homes are selling for just over their original asking price in 2023.
• 14% of homes sold in the first half of 2023 sold for $2M+ and only 32% sold for $1M or less
• If you remove 2020 sales numbers (COVID lockdown), there were 26% fewer sales in the first half of 2023 than the 5yr average. That is almost exclusively due to low supply, not low demand.
• 68% of sales in 2023 were at or above the asking price, less than 2021 and 2022 but just above 2019 and 2020
• 64% of homes sold within 10 days on the market, last year it was 74%
• Homes that went under contract within one week on market sold for an average of 3.9% over the asking price, in 2022 the average was 6.8% and in 2019 it was 2%.

Zip Code Prices All Over the Place

There was no consistency in average price change across Arlington zip codes:

• Note: 22213 only has 8 sales in 2023 so the data isn’t very reliable, I considered not including it
• 22201 led the way with an 8.9% year-over-year increase
• After massive growth in 2021 and 2022, the 22205 zip code had the worst performance, down 8.5% from last year. However, this is not a reflection of actual home values dropping in 22205 by that much, but mostly the make-up of the data set.
• 22204, the zip code I now call home, remains the only zip code for a third year in a row with an average home price below $1M
• 22207, the best bellwether for Arlington single-family market conditions, continued its steady appreciation clocking in at 4.2% over 2022 to an average of $1,609,000. Without new construction sales, the average price increased by 1.8% to $1,455,000.

Looking Forward

There is no relief in sight for interest rates, with many rates returning to the 7%+ mark as of last week. Expect a noticeably less competitive, more balanced real estate market in the second half of the year. Buyers will have a better chance at finding value and sellers should level expectations.

The big question is when will rates come down (many expect to see 4-5% in the next 12-18 months) and what will that do to prices. If inventory remains low, which it’s likely to do for years to come, I think that we’ll see another surge in demand and prices when rates break through 5.5-6%. If that coincides with Q1/Q2 of 2024, expect that surge to be amplified. Until then, I expect prices to remain relatively flat with competition light to moderate, depending on the season.

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 Eli Residential channel.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C A

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 Eli Residential channel. Enjoy!

One of my favorite things about the Arlington condo market is the remarkable views that some of the buildings have of D.C. and the National Mall!

Some of the best Fourth of July fireworks in the country take place on the National Mall and what better place to view them than from your very own Arlington condo!

Today, Jean Ropp, Arlington real estate agent with Eli Residential Group, toured 4 Arlington condo buildings to check out their views of the D.C. Skyline:

1. Prospect House, 1200 N. Nash Street, was built in 1966 and is located just steps from the Iwo Jima Memorial. The building is best known for its views of the Washington Monument and D.C. skyline.
2. The Pierce, 1781 N. Pierce Street, completed in 2021, it is Arlington’s newest building for sale. This high-end, luxury building has an average sale price of ~$1.8M and $1,000 per square foot. Part of the price tag comes from the impressive views of D.C. from many of the units, the rooftop terrace and the rooftop pool.
3. The Odyssey, 2001 15th Street N., built in 2006, is located in the Courthouse neighborhood. This building’s great reputation and excellent amenities make it an Arlington favorite. The views from the rooftop pool and top floor gym are exquisite.
4. The Waterview, 1111 19th Street N., built in Rosslyn in 2008, is unique because floors 1-15 are a hotel and floors 16-31 are condo residences. The Waterview has its name for a reason! The views of the Potomac River and Washington, D.C. are unmatched.

There are other buildings in Arlington that offer superb views not mentioned here including 2000 Clarendon and Clarendon 1021.

Let us know in the comments below which of these buildings you’d like to watch the D.C. Fourth of July fireworks from! If you’d like to tour any of these buildings, you can contact Jean at [email protected].

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 Eli Residential channel.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C A

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 Eli Residential channel. Enjoy!

One of my favorite things about the Arlington condo market is the remarkable views that some of the buildings have of D.C. and the National Mall!

Some of the best Fourth of July fireworks in the country take place on the National Mall and what better place to view them than from your very own Arlington condo!

Today, Jean Ropp, Arlington real estate agent with Eli Residential Group, toured 4 Arlington condo buildings to check out their views of the D.C. Skyline:

1. Prospect House, 1200 N. Nash Street, was built in 1966 and is located just steps from the Iwo Jima Memorial. The building is best known for its views of the Washington Monument and D.C. skyline.
2. The Pierce, 1781 N. Pierce Street, completed in 2021, it is Arlington’s newest building for sale. This high-end, luxury building has an average sale price of ~$1.8M and $1,000 per square foot. Part of the price tag comes from the impressive views of D.C. from many of the units, the rooftop terrace and the rooftop pool.
3. The Odyssey, 2001 15th Street N., built in 2006, is located in the Courthouse neighborhood. This building’s great reputation and excellent amenities make it an Arlington favorite. The views from the rooftop pool and top floor gym are exquisite.
4. The Waterview, 1111 19th Street N., built in Rosslyn in 2008, is unique because floors 1-15 are a hotel and floors 16-31 are condo residences. The Waterview has its name for a reason! The views of the Potomac River and Washington, D.C. are unmatched.

There are other buildings in Arlington that offer superb views not mentioned here including 2000 Clarendon and Clarendon 1021.

Let us know in the comments below which of these buildings you’d like to watch the D.C. Fourth of July fireworks from! If you’d like to tour any of these buildings, you can contact Jean at [email protected].

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 Eli Residential channel.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C A

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 Eli Residential channel. Enjoy!

Question: What trends are you seeing across the DC Metro real estate market?

Answer: The D.C. suburbs are holding strong despite sticky interest rates, but D.C. itself is showing some signs of weakness. Let’s jump into the charts and data that I think best highlight what we’re seeing so far this year:

Low Listing Supply Is The Main Story

Chart #1: One of the most interesting charts I’ve seen is below that compares this spring (March-May) to previous October-December new listing volume. Historically, we see the least number of homes listed for sale during the 4th quarter of each year and the most homes listed for sale March-May each year. New listing volume has been so low in 2023 that March-May 2023 has a similar listing volume to what we usually see from October-December.

Chart #2: We’re currently in our 15th straight month of negative year-over-year new listing activity and the last positive month was up only .5% year-over-year.

Chart #3: All D.C. area submarkets are desperate for new listings, but Fairfax County has it the worst with a drop in new listings volume by more than 40% year-over-year. D.C. has had the lowest drop but it’s still down by nearly 30%.

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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. Video summaries of some articles can be found on YouTube on the Eli Residential channel. Enjoy!

Question: Why would anybody waste hundreds of dollars each month on condo fees?

Answer: Most people associate paying condo fees with throwing money down the drain, but the truth is that most people aren’t looking at condo fees the right way; they even offer some advantages over a single-family home or townhouse.

What Do Condo Fees Pay For?

For those who haven’t spent much time studying condo budgets, some of the main expenses in a condo budget include:

• Reserves: a building’s savings account for large major repair or replacement of things like the roof, façade, elevators, etc.
• Property Management/Staff: contracts for a property manager, front desk, janitorial services, and engineer.
• Maintenance and Utilities: general upkeep of the building including lawn service, basic repairs, power washing, window cleaning, snow removal, and utilities like water, sewer, and trash (some buildings also include gas, electric, and/or tv and internet).
• Master Insurance: this policy usually protects everything except your personal items and improvements within each unit.

Predictable Expenses

One of the most beneficial, yet underappreciated, advantages of condo fees is that they give homeowners a very predictable, flat expense structure. Taking care of a single-family home might mean months or years with very low maintenance expenses and then a run of tens of thousands of dollars in expenses (e.g. a storm damages your deck and deck and your basement floods).

In a condo, your biggest financial exposure is usually HVAC and appliances, all of which are under $10,000 and have somewhat predictable expirations. Many of the other normal home maintenance and replacement costs tend to fall under the purview of the Association.

For younger buyers with less savings and retired homeowners on a fixed income, the benefits of stable, predictable condo expenses makes financial planning/management easier and also require less of an emergency savings fund so more cash can be deployed into investments or to enjoy.

Home Maintenance Cost > Condo Fees

When you own a condo, you’re only responsible for what’s inside the walls of your home (appliances, water heater, flooring, walls, plumbing fixtures, etc) and, if you have one, an outdoor HVAC compressor. Of course with a single-family home or townhouse, you are responsible for a lot more without anybody to share those costs with.

Over the last 12 months, the average condo fee in Arlington was $583/month (~$7k/year) representing about 1.4% of the average condo market value. Estimates for annual (single-family) home maintenance range from about 1-2% (Wells Fargo) to 1-4% (State Farm) of your home’s value in annual maintenance expenses.

Many homeowners will spend more in the long-run maintaining a single-family home than they will on condo fees, plus condo fees include more than just maintenance and repair.

Lower Utility, Insurance Bills

Condo living will help you save money on other expenses including utilities and homeowners insurance. It’s usually much easier to keep your unit comfortably heated and cooled because you benefit from the ambient temperatures from the units and hallway around you. And because of the existing Master Insurance policy for the building, your own homeowners insurance policy tends to be less expensive than a comparable policy for a single-family home or townhouse.

Amenities

Many buildings have amenities that can either save you money (e.g. a gym that saves you from paying a separate gym membership fee or grilling area to save you on a grill and propane) or enhance your living (e.g. pool, rooftop terrace, 24hr front desk security).

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