real estate

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: We bought a new home in Arlington five years ago and are considering selling, but we’re concerned about the resale value of new homes given the amount of newer homes being built in the market. Do you have any data on how new homes do when they resell for the first time?

Answer: The new/newer construction market is the only Arlington sub-market that is anywhere close to properly supplied, with almost 4.5 months of inventory available (number of homes for sale divided by average sales per month = months of inventory).

Most housing economists say that a market is at balance for buyers and sellers when there is six months of inventory. For comparison, sub-markets like one-and-two-bedroom condos, <$1M detached homes, and townhouses each have between one and three weeks of supply.

New Homes Are Appreciating…

There’s a logical case to be made that when a new home (built within the last decade) gets resold, it will struggle to compete with other brand-new homes given how similar these homes have been over the last ten years, combined with the amount of supply in the market. Fortunately for owners of recently built homes who may sell in the near future, that logic does not prevail and new homes are being sold for more the second time around. 

…But Just A Little

There aren’t a ton of data points yet (most people buying expensive new construction will be there for a long time), but just enough that I think we can start to get a good idea of how new homes (that aren’t new anymore) from the past decade perform when they’re resold into a market with many similar new homes.

To study this, I identified homes built since 2012 that have since resold, excluding homes that sold within one year of their original purchase or any homes with major improvements since the original purchase or clearly left in disrepair.

Here’s a summary of my findings:

• 53 homes met the criteria, nearly all in North Arlington
• Average appreciation on resale was 6.7%
• Average annualized appreciation was 2.1%
• Only seven homes sold for less than they were bought
• Sixteen homes sold for at least 10% above what they were bought
• On average, it took 64 days for these homes to go under contract, about 30% longer than the entire detached home market during that same period

Cause For Concern?

For those who own a new(er) home, you may be underwhelmed by these numbers relative to what the rest of the market is doing — compared to other detached homes in the Arlington market, new homes are appreciating at a noticeably slower rate.

Part of that is due to the fact that there’s a much higher supply of similar new/newer homes for sale so that will naturally keep prices more stable. Another reason is that it takes longer for the upper end of the market to appreciate, so the growth we’ve seen <$1.25M hasn’t impacted the $1.5M+ market as much.

So is a new home a bad investment because it appreciates less than other homes? Not at all.

First, one of the reasons buyers pay a premium for new/newer homes is because your maintenance and repair costs should be significantly lower for the first 10-15 years. Investment value isn’t only about what you buy and sell for, it’s also about how much you spend between the two transactions keeping the house operating (often more valuable than appreciation).

Second, for most families, a new/newer home offers square footage and a floor plan they can’t find anywhere else so the non-financial/quantifiable benefits are significant. Opportunities to customize to taste also factor into the non-financial/quantifiable return that owners may receive.

The new construction market operates differently from the rest of the housing market. If you have any questions, don’t hesitate to reach out to me at [email protected]. And a quick plug for two custom homes on ¼ acre lots I’m selling in Bellevue Forest, being built by James McMullin, Arlingtonian and third-generation Arlington developer/builder. Demolition and excavation will start in the next month!

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.

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: What changes are you seeing in design trends this year?

Answer: Every year I look forward to the Pantone Color of the Year selection (released annually since 2000) and this year is one of my personal favorites — Classic Blue. I’ve noticed blues showing up a lot more in homes lately, especially in kitchens (it makes for a beautiful cabinet color, in my opinion).

But trends go well beyond colors so for an expert opinion on the latest design trends, I’d like to re-introduce Caroline Goree ([email protected]), a designer with a boutique Residential Interior Design Firm, Madigan Schuler, located in Alexandria, Virginia to provide insight into what trends we should expect to see in 2020.

In 2018, Caroline introduced us to one of my favorite design quotes from Matthew Frederick’s book 101 Things I Learned in Architecture School, “Being nonspecific in an effort to appeal to everyone usually results in reaching no one.”

Take it away Caroline…

Thank you, Eli. I am really excited for the trends we see happening in 2020 primarily because people are experimenting with color, textures and patterns much more than in the past few years. While those “safe” design decisions like all white kitchens aren’t necessarily going to go of style, I like seeing more personal flare and individuality come through. Below are some of my personal favorite trend hello’s and goodbye’s of 2020.

Goodbye One-Stop Shoppin’

Thanks to Restoration Hardware, the “all gray everything” trend was popular for the better part of the last 5+ years. Thankfully, that “one-stop shop” mindset is shifting to consumers wanting a more collected look.

Maybe that means a sofa from a known store, such as Restoration Hardware, mixed with vintage velvet club chairs found at Miss Pixies in Washington, D.C. Add in your grandmother’s fabulous antique chest for a coffee table (hard to believe you once referred to is as old “brown” furniture) and a natural fiber rug so your room has that layered, collected look.

Personally, I am thrilled the trend is moving towards an appreciation for a well curated space using unique items that are not all new and mass produced. Interior Designer, Nate Burkus, once said “Your home should tell the story of who you are, and be a collection of what you love.”

Hello Square Tiles

Thanks to Chip and Joanna Gains (and 90% off the local flippers) subway tile is officially overused and seen in just about every kitchen or bathroom completed since 2015. While timeless (after all, it is named after the 3×6 tiles installed in 1904 in the New York Subway Station) we are ready to explore other shapes and textures.

My personal favorite, square tiles, offer a more unique look but keep the space simple and sleek. From matte concrete tiles in mudrooms, to hand painted terracotta tiles for kitchen backsplashes, many manufacturers are using this traditional shaped tile with an artistic or creative twist. If square tiles still feel a bit out of your comfort zone, try playing with the scale of rectangular tiles such as sizes 2×9 or 3×12.

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