This regularly sponsored question-and-answer column is written by Eli Tucker, Arlington-based real estate agent and Arlington resident. Please email your questions to him for a response in the next few columns. Video summaries of some articles are available on YouTube on the Ask Eli, Live With Jean playlist. Enjoy!
Question: How has the Arlington condo market behaved in 2021?
Responnse: Happy new year everyone! Hope you all enjoy the beautiful snow.
We have reached a clear point of stabilization in the Arlington condominium market after 2-3 years of ups and downs. The condominium market jumped from the 2nd half of 2018 to pre-COVID 2020, led by the Amazon HQ2 announcement in November 2018, and then was hit hard by COVID with many owners and investors flooding the market with supply as demand was falling. This downward pressure lasted from summer 2020 to the first quarter of 2021 and has since stabilized.
Note: The statements and data below are for apartment style condos (buildings / shared entrance) and do not include townhouse style condos (direct entrance) or senior residences.
Amazon HQ2 and COVID were (mostly) offsetting forces
The price and demand data is such that the upward pressure from Amazon HQ2 and the downward pressure from COVID appear to have mostly offset each other, leading to modest to moderate annual price appreciation over the past 5 years and more in the Arlington condo market.
Prices for the 2019 surge in the market remained stable, with the average price of a bedroom in 2021 being 1.5% higher than in 2019 and the average price of a two-bedroom in 2021 being 5.6. % higher than in 2019. For the Arlington condo market as a whole, the average cost of a condo in 2021 has increased by 2.9% compared to 2019 values.
If you eliminate new condo sales, the one-bedroom average in 2021 is only 1% higher than in 2019 and the two-bedroom average in 2021 is only 0.9% higher than in 2019. ‘in 2019. For the Arlington condo market as a whole, the average cost of a condo in 2021 only increased by 0.3% compared to 2019 values.
The other interesting takeaway from the data below is that key demand metrics, such as average selling price versus original asking price, percentage of homes sold within 10 days on the market, and the average number of days on the market, all returned to what we saw before the surge of Amazon HQ2. (and had been for a while before that).
I believe we are positioned for moderate condominium appreciation in the coming years, unless we undergo a major restructuring in office use. This is based on a few key points:
- Condo values have held up and even appreciated slightly since 2019, despite the massive supply that hit the market over the past 18 months. Historically low interest rates and rising prices for single family / row homes have certainly contributed to this development.
- Amazon HQ2 will continue to hire thousands / tens of thousands over the next decade and drive major business development in Arlington
- The pipeline for the development of new condos is practically non-existent and it takes years to fill this pipeline
- In many cases, apartment rents are now higher than they were before the pandemic, making buying more attractive
- Wider spreads between condominium prices and single family / townhouse prices push more buyers to condominiums, if they want to stay in Arlington
Similar market performance across all price points
Sometimes entire markets are led or held back by smaller subsections of the market and that gets lost when you take broad averages. I have divided the Arlington condominium market into the bottom 25%, middle 50%, and top 25% of prices over each of the past three years to see if any part of the market could have an undetected influence on prices. global figures.
As it turns out, all three price brackets of the Arlington condominium market have performed very similarly over the past three years, which in my opinion is indicative of a healthy market.
2021 performance by postal code
For those interested in what the condominium market looks like in each Arlington zip code, I’ve put together the average prices, demand metrics, and property details in the table below for you. .
The most notable takeaway is the high metric demand for 22206 (Shirlington area) as most of the units in this dataset located at 22206 live / feel more like a townhouse, although they are not not direct access (the many direct access condos at 22206 were not included in this dataset). This clearly shows the markets’ preference this year for anything that looks like life other than an apartment.
Next week I plan to do a similar market research on the single family / detached home market.
If you would like to discuss buying, selling, investing or leasing, please do not hesitate to contact me at [email protected].
If you would like an answer to a question in my weekly column or to discuss buying, selling, renting or investing, please send an email to [email protected]. To read one of my old articles, visit the blog section of my website at EliResidential.com. Call me directly at 703-539-2529.
Video summaries of some articles are available on YouTube on the Ask Eli, Live With Jean playlist.
Eli Tucker is a Licensed Real Estate Agent in Virginia, Washington DC and Maryland with RLAH Real Estate, 4040 N Fairfax Dr # 10C Arlington VA 22203. 703-390-9460.