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Are Two Bedroom Condos a Better Investment Than One Bedroom Condos?

Question: Is it true that two-bedroom condos are a better investment than one-bedroom condos?

Answer: If you’re asking this question strictly as an investor, the answer is purely based on the numbers. If you’re buying for yourself, you’ll want to consider appreciation as well as what makes the most sense for your lifestyle. For example, do not spend an extra $150,000 because a two-bedroom will appreciate faster, if you’ll end up using the second room for storage and an occasional guest.

Two-Bedroom Condos Appreciate More than One-Bedrooms Condos

Below is a graph showing appreciation of one and two bedroom condos in Arlington since 2010. To maintain consistency, the data set uses condos built from 2000-2008 limited to one bedroom units with 600-800 sq. ft. and two-bedroom units with 900-1,400 sq. ft.

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The average one-bedroom sold for $364,000 in 2010 and is selling for $409,000 in 2017 while the average two-bedroom sold for $529,000 in 2010 and is selling for $638,000 today. If you bought the average one-bedroom in January 2010 with 20% down, you’d have approximately $172,000 in equity today. If you bought the average two-bedroom in January 2010 with 20% down, you’d have approximately $294,000 in equity today by putting an extra ~$33,000 down in 2010.

If You’re An Investor

If you’re an investor, you’re looking at rental income, in addition to appreciation. As I wrote this spring, rental rates have been pretty flat in Arlington, especially along the Rosslyn-Ballston corridor, due to a lot of new rental buildings being built the last 5-10 years.

 

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Based on the average 2010 purchase prices, rental income and a 25% down payment (most common % down for an investor), the average investor along the Rosslyn-Ballston corridor has no cash flow from their investment. The table below does not include maintenance or property management fees and assumes average condo fees, taxes and insurance.

 

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So Why Invest?

Considering that the above monthly cash flow summary does not include maintenance costs, property management fees or vacancy periods where is the value in owning an investment property?

  • Equity Build-Up: For a one-bedroom, your tenants would have contributed an average of $460/mon over the last 8 years ($44,000) to your equity balance and for a two-bedroom, your tenants contributed an average of $680/mon over the last 8 years ($65,000)
  • Tax Benefits: Another major benefit of investing are the tax benefits. Being able to deduct expenses like condo fees, tax payments and repairs. As well as depreciate the value of the condo and provide a huge annual financial benefit to off-set the weak monthly cash flow. A one-bedroom investor may be able to deduct about $20,000 per year and a two-bedroom investor about $30,000. Of course, you’ll want to discuss any deductions with your tax professional first.

 

If you’ve invested in property in other areas of the country, you may be shocked by how little monthly cash flow a condo along the Rosslyn-Ballston corridor produces. A major reason for the lower ROI is the lower risk that comes with investing in Arlington condos. Your downside risk during an economic dip is much lower and the rental market is consistently strong with a large pool of well-qualified renters. It follows the basic economic tenets of risk and return.

If you’re considering buying an investment property, feel free to send me an email at Eli@EliResidential.com to set-up a meeting to go through your investment goals and options.

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How Much Does Land Cost In Arlington?

Question: Can you provide insight into how much a tear-down home costs in Arlington and how lot size effects sale price of a single-family home?

Answer: Breaking News… land is very hard to come by in Arlington. Only 11 homes sold in the last ten years had one or more acres, and it’s going to cost you over $1M to buy one. The average lot size of a single-family home in Arlington is about 8,400 sq. ft. or .19 acres with about 70% of homes on 6,000-10,000 sq. ft. lots.

Here’s a look at the impact of lot size on sold prices of single family homes over the last three years broken out by zip code:

Cost Of Arlington Homes By Lot Size

 

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The data above takes homes of all sizes and condition into account so it doesn’t do a great job of isolating the actual market price of the land or how much people pay for tear-down lots in Arlington.

To summarize that data, I pulled out the cheapest 15% of sales in each zip code over the last three years. I felt that the cheapest 15% of sales in each zip code were probably good bets for homes being bought for the land/location with the intention of tear-down or major renovations. Note: 22209 didn’t have enough sales to include in this table.

Cost Of Land In Arlington

 

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If you’re thinking of buying a tear-down and building new, a good way to estimate how much your home will cost is to add the following:

  • Land acquisition (see above table for estimated land cost by zip code)
  • $75,000-$100,000 for demolition, preparing the lot for construction, and permits
  • $400,000-$800,000 on construction
  • Carrying costs of the loan and taxes during construction of the new home

Earlier this year I wrote about the variance in County tax assessments and market data. How do the market prices for land compare to the County’s tax assessments, which are broken out by land assessments and improvement assessments (assessed value of the home)? Let’s take a look at how the County has assessed land values on homes sold over the last three years and compare that to the market assessment of land values above.

The County Values Land Less Than The Market

 

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Based on this data, the County values land at about 72% of the market value for land on the open market.

Once you’ve had some time to digest the cost of land in Arlington, let me know if you’d like to meet to discuss the process of buying a tear-down lot and building your own home! Email me at Eli@EliResidential.com to schedule an appointment.

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My Favorite Mortgage Programs

Question: Are there good loan options available if I don’t have 20% or more to put down?

Answer: There are an abundance of loan products on the market that cater to different professions, down payments and financial circumstances that you should be aware of. “Rate shopping” is easy and moderately effective, but “product shopping” can be much more valuable and something an informed Agent can assist you with. Here are some of my favorite loan programs and the lenders I work with who provide them:

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Doctors: Doctor Loan Program from SunTrust: CJ Kemp (cj.kemp@suntrust.com, (301) 651-4189)

The Doctor Loan Program is a residential mortgage loan specifically created for licensed medical professionals to make obtaining mortgage financing easier and more hassle-free. It recognizes the financial toll of medical school and strong, stable future income post-graduation. The rates on these loans are also fantastic.

Eligible Doctors include:

  • Licensed residents/interns/fellows in MD and DO programs
  • Medical doctors
  • Doctors of osteopathy
  • Doctors of dental medicine/surgeons/orthodontics/general dentists (DMD/DDS)
  • Psychiatrist licensed as a medical doctor

Available financing terms include fixed and adjustable rate mortgages for purchases and rate/term & cash out refinances.

  • 0% down up to $750,000 loan amount
  • 5% down up to a $1M loan amount
  • 10% down up to a $1.5M loan amount
  • No mortgage insurance required

Homeowners Buying And Selling: Second Trust/HELOC Program from First Home Mortgage: Jake Ryon (jryon@firsthome.com, (202) 448-0873)

This is a great program for current homeowners who will be buying and selling simultaneously. It allows you to use the future proceeds from your home sale to make a large down payment on your new home, before even putting your current home on the market.

They partner with local banks and credit unions to provide you with a second trust that allows you to put as little 5% down up to nearly a $1,000,000 loan amount. The second trust finances the remaining amount of your down payment (e.g. 15% if you put down 5%).

The HELOC/second trust payment is interest-only, can be paid off any time and can be used like a bridge loan to allow you to purchase a new home without a home-sale contingency and to sell your existing home unrestricted.

Low Down Payment: Mortgage Insurance Payment Eliminator from McLean Mortgage: Troy Toureau (ttoureau@mcleanmortgage.com, (301) 440-4261)

This program enables you to put as little as 3% to 5% down using conventional financing (not FHA) and eliminate the monthly mortgage insurance payment by making a one-time more affordable payment.  This provides multiple benefits including a potential increase in buying power by reducing the Debt-to-Income ratio (lower monthly payment), allowing you to negotiate for the seller to make this payment by rolling it into closing costs, and ensuring that the entire payment is tax deductible (confirm with your tax advisor).

Large Loan Amounts: Non-Confirming Jumbo Loan Program from Wells Fargo: Email me for contact info at Eli@EliResidential.com

It’s not just the Doctors who can find low down payment options without mortgage insurance for high-value (jumbo) loans. Wells Fargo’s “Professionals” Program lets you put 10.01% down on loans from $424,100 up to $1,000,000 without any mortgage insurance and the rates are incredible. They have options for fixed and adjustable mortgages as well. A high credit score and strong income are key factors for qualifying. It’s referred to as the “Professionals” Program because it’s popular amongst high earning, non-medical professionals like lawyers and consultants.

Make The Right Choice

Choosing the right lender is a combination of selecting the program that’s right for you, getting the best market rates, and working with somebody who provides a high level of service. Earlier this year I wrote an article with additional tips for selecting and comparing lenders. If you have any questions about the programs I summarized above, other lending programs like construction and rehab loans, or would like an introduction to one of my preferred lenders please reach out to me at Eli@EliResidential.com.

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What You Need to Know About Buying a Second Home

Question: We are buying a vacation home this winter and wondering how the process and rules differ from our experiences buying our primary residence.

Answer: Buying a vacation home is a little like buying a primary home, but there are key differences you should be aware of. Lenders tend to set more stringent lending requirements and you must be clear about your plans for the property. With these considerations, potential buyers can plan for the financial obligations and time commitments common to the purchase of a second home.

What Counts as a Second Home?

Lenders treat primary residences, second homes or vacation homes and investment properties as unique types of property purchases. Typically, lenders are more likely to grant loans with more favorable terms to people purchasing homes as a primary residence, as the occupation of the home usually ensures a higher degree of timely repayment. Properties that will never be occupied by the owner have different lending and tax obligations. As such, to buy a second home or vacation home, lenders often require you to choose properties that are a set distance away from your primary residence. You must also indicate that you’ll occupy the property for a set amount of time each year.

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Vacation Home or Investment Property

Given that a vacation home must be a notable distance from your primary residence, you should consider the type of arrangement that works best for you. Homes suffer from lack of attention, so you should be prepared to make regular visits for maintenance and repairs, or hire a local company to do so. Larger or more remote properties may demand more care, while a condominium in a developed area might require less. You may also choose to rent out the property in your absence to help pay for the mortgage. However, this may affect the classification of the property purchase, and have other tax implications.

Capital Gains Taxes

Selling a primary residence often qualifies the seller to exclude up to $500,000 of the capital gains from their tax liability for a married couple ($250,000 for a single person), but vacation homes are viewed differently. Typically, a homeowner must have lived in the home as a primary residence for at least two of the past five years to qualify for the maximum capital gains tax exclusion.

People who never occupied the home as a primary residence do not qualify for the exclusion and may be required to pay capital gains taxes. Buyers who eventually intend to occupy the vacation home as a primary residence should carefully consider when they plan to sell both properties. For example, a person who sells a primary residence and moves into a vacation home may be able to claim the vacation home as a primary residence, if they occupy it for a minimum amount of time. However, they cannot claim the capital gains tax exclusion more than twice in a two-year period.

Down Payment and Mortgage Interest Rates

People read about down payments as low as 3 percent to buy a home, but these programs are generally aimed at borrowers looking to purchase a primary residence. A vacation home represents a higher degree of risk, since the lender cannot count on the buyer’s full time occupancy to entice adherence to the loan.

As a result, you should plan to make a down payment of at least 20 percent of the second home’s sale price. You may need to pay more to satisfy lender requirements, particularly if your debt-to-income ratio is on the higher side. Due to the increased risks inherent to second properties, lenders may also set higher mortgage interest rates.

Mortgage Interest Deduction

The mortgage interest deduction can be an excellent way to offset some of the costs of purchasing a home and paying a mortgage, but there are limits on this deduction for owners of multiple properties. First, the total mortgages that owners can use in the mortgage interest deduction must be less than $1 million total–possibly somewhere around $500k if the laws change–if they are married filing jointly. Second, owners of more than two properties can only deduct the interest of one primary residence and one second home. Third, people who own a vacation home but rent it out periodically must occupy the home for at least 14 days a year, or 10 percent of the amount of the time the home was rented throughout the year, whichever is greater.

People who convert a vacation home into an investment property may also be able to deduct a portion of the mortgage interest they pay on the home, but the tax guidelines for investment properties are different than owner-occupied homes.

Buying a second home is an investment that turns out to be quite unique from buying a primary residence. Hopefully these tips will help you make a better decision. Most importantly, good luck finding your perfect vacation home!

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Columbia Forest Neighborhood Spotlight

Where Is It? Columbia Forest is a small neighborhood on the western border of Arlington bounded by Columbia Pike to the north, Four Mile Run to the east, S George Mason Dr to the south and the Arlington-Falls Church border to the west.

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It is largely considered the most affordable neighborhood in Arlington with detached homes in good condition selling in the $400s and 1BR-2BR condos in good condition selling in the mid $100s. There are also pockets of townhouses and duplexes available. The neighborhood is served by Claremont and Barcroft Elementary Schools, Gunston and Kenmore Middle Schools and Wakefield High School, which is walking distance from every home in the neighborhood.

About The Interviewees: Arthur works for a local University and had previously lived in DC since 1997. Lyz works for Walter Reed in Bethesda and had lived in Annapolis and Gaithersburg. When they moved in 2015, it was the first time either had lived in Arlington and they chose a duplex in Columbia Forest for its affordability and convenience.

Since moving in they’ve added a free library in front of their home (pictured), added a prized garden that keeps their neighbors and friends stuffed full of veggies and painted the exterior of the house. Both Lyz and Arthur are highly active in the civic association and neighborhood programing.

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What Do You Love About Columbia Forest? The affordability of it was key and we actually have yard space, which is hard to find at a good price in Arlington. It’s an eclectic neighborhood with a sense of “live-and-let-live” that is difficult to come by elsewhere in Arlington. There’s no overreaching HOA and neighbors are accepting of untraditional landscaping, exterior paint and the individuality of each other.

It’s also a very safe place to live — during a civic association meeting, one of the police representatives said that it’s one of the safest neighborhoods in Arlington. It’s also an inviting community for families and children because there’s not a lot of traffic and plenty of space for kids to play in yards and the street.

Does Columbia Forest Have Its Own Identity? There’s a lot of community here that gives us a sense of belonging to a true neighborhood. We were shocked at how active it is on Halloween for local families and because so many of our neighbors have lived here for decades, there’s a welcoming social scene that we’ve enjoyed becoming a part of. You can tell people here truly care about one another.

We’ve also teamed up with other “West Pike” neighborhoods like Barcroft and Arlington Mill for programing and hosted our fifth annual food truck event in October with over 300 people (Lyz is highly active in this event). Note: check out one of the best neighborhood websites I’ve seen at http://www.columbiaforest.org/.

What Are Some Of Your Favorite Places Nearby? We’re a couple of minutes from Shirlington Village so we do most of our grocery shopping at the Harris Teeter there and love eating at Copperwood Tavern (note: this is the second or third interview I’ve done that Copperwood Tavern has been named as a favorite). There’s an incredible authentic taco truck, Pa’ Tacos El Papi, around the corner off Jefferson as well.

We spend a lot of time outdoors, so when we’re not gardening or working on a project around the house, we head to the WO&D and Four Mile Run trails. We also spend a lot of time at Barcroft Park, the western part might be one of the most underrated/underutilized spaces in Arlington. We’d love to see our local park, Bailey’s Branch Park, get some love from the County.

What Do You Envision For The Future Of Columbia Forest? It really depends where western Columbia Pike fits into the Arlington Economic Development plans. If we can find ways to encourage non-chain businesses to consider the area for its lower rent, easy access and ample parking we can create a really unique pocket of retail and residential in Arlington.

There is so much energy behind building community from the residents, that new businesses would find an impressive support system at their doorstep. If we can do this, with the support of Arlington leadership, Columbia Forest will thrive.

Thank you so much for your interview Arthur and Lyz! I’m sure this will help people considering a move into or within Arlington who would love to join a community like Columbia Forest.

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New Trafalgar Flats Condos

Question: Do you have any details on the new condo building on Columbia Pike?

Answer: The development of Columbia Pike continues westward with the introduction of a very affordable, brand new condo building by Pillars Development Group. The success of recent residential projects, Columbia Place (condos and some townhouses) and Carver Place (townhouses), along the eastern half of Columbia Pike, signal that this will be a successful project for Pillars, who has developed other local condos like The Berkley in Ballston, The Henry in Alexandria and The Paramount in Reston.

What I’m Tracking

The developers decided to make 25% of the units Jr 1BRs, with just under 500 sq. ft., which hasn’t been a very common product in newer construction so I’m looking forward to seeing how these sell. I think it will be a great secondary residence for buyers who live 90+ minutes away and work nearby, as well as the modern value-based buyer looking for affordability and less space.

Unlike most small studio spaces, they have a separate room to sleep (functional bedroom that doesn’t meet legal bedroom requirements) which makes them much more desirable than studios with one large living/sleeping space. The asking price of these units will range from $250k-$300k with monthly condo fees just under $200.

For reference, only 32 condos have sold in Arlington over the last two years for less than $300,000 and monthly fees under $250. The average construction date of those units was 1964, with none being built in the last ten years.

Affordable

Affordability and value are the selling points for Trafalgar Flats (ease of pronouncing the name is not) with 700+ sq. ft. 1BR units selling from the mid to upper $300s and 2BR/2BA units starting in the mid 400s.

The monthly condo fees are also a selling point, coming in about 10-15% lower than the average fee/sq. ft. of other Arlington condos, while still including a gym, lobby, outdoor terrace and bike storage. Above average condo fees were a problem for a lot of potential buyers of Rosslyn’s recent Key & Nash project, which is about 50% sold and about three months from completion.

For reference purposes, there have been 308 2BR/2BA condos sold in Arlington over the last two years for less than $500k and fees under $450/mo., but only three were built in the last 10 years. Bottom line… it’s rare to find value like this in Arlington.

Investment-worthy

There aren’t too many places left inside and around the beltway where you can expect above-market appreciation, but Columbia Pike is one of them, especially the western half now that the eastern section has already seen substantial growth.

At the current pricing and being in the early stages of western Pike development, savvy buyers and investors should pay attention. The property sits just two blocks from the site of the under-development Columbia Pike Village Center, anchored by a Harris Teeter (replacing Food Star), slated to open in 2019. Expect strong ROI from all three options — Jr 1BR, 1BR and 2BR.

From the builder, “We chose to build in this location due to the community’s close proximity to DC and the Pentagon.  Arlington County is committed to the revitalization of the Columbia Pike Corridor.  We are proud to be amongst the first to offer the opportunity to purchase a new luxury condo in this changing, urban environment.”

Other Details

The building will have 78 total units with 25% Jr 1BR (under 500 sq. ft.), 25% 2BR/2BA (~1,000 sq. ft.), and 50% 1BR/1BA (over 700 sq. ft.) with prices ranging from mid $200s to mid $500s. Monthly fees will start at $192 for the smallest units and top out at $421 for the largest 2BRs. One of the best parts of buying pre-construction is being able to choose your finishes including cabinets, counters, flooring and tiling. All units come with one underground assigned garage parking space.

If you’d like to discuss Trafalgar Flats as a primary residence, secondary residence or investment please reach out to me at Eli@EliResidential.com or at (703) 539-2529.

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Finding Savings in Your 2018 Condo/HOA Budget

Question: I’m the Treasurer at [redacted Condo Association] and we’re working on the 2018 budget. What’s a good way for us to save money in the budget without compromising the health and maintenance of the building?

Answer: As a former Condo Board Treasurer, I feel the pain that this time of year brings, so I’m happy to offer some advice that helped me finding savings while I oversaw the budget and has helped other Associations do the same… review your Master Insurance Policy. I know, it’s not the most exciting answer, but your insurance policy is likely a top three expense on your balance sheet every year and if you haven’t reviewed it lately, there’s a good chance you can cut the cost by 5% or more and probably improve your coverage at the same time.

I’m not an expert in insurance so, I asked Andrew Schlaffer, Vice President at USI Insurance Service’s Community Association Practice (www.USI.com) to provide some details on what Board’s should look for when they do a review of their Master Policy. If you’d like to discuss a review with Andrew directly, you can reach him at 703.205.8764 or Andrew.schlaffer@usi.com. Take it away Andrew…

Pillars Of Insurance Reviews

Condo insurance reviews require a holistic approach, so it’s important to break the cost into a few distinct categories: insurance premium, deductible expense and out-of-pocket costs. To effectively accomplish long-term savings, all three of these categories need to be considered and addressed with a qualified insurance professional.

Adjust Coverage Responsibly To Save On Premium

Premium is certainly a factor to consider during the insurance selection process; however, available insurance products differ significantly. Coverages and services should be very carefully analyzed and compared. While omitting various coverages will save premium dollars, it might also result in substantially increased costs to the Association for out-of-pocket expenses related to uncovered claims.

It is critical to work with a professional who understands local insurance needs and can adjust your insurance program in a way that maximizes premium savings while maintaining adequate insurance coverage. Some coverages may be required by statute and/or Association documents, so cutting required coverage exposes the board to unwanted risk.

Deductibles Based On Loss History

Associations with strong financials often choose to increase their property deductibles which can provide immediate savings of 2-5%. Deductibles range from $2,500 to $25,000+. When considering deductibles, it is important for the Association to review their loss history and the loss history of comparable buildings in an effort to obtain an accurate estimate for deductible expenses.

Rate Shopping

The most common strategy employed by Associations seeking lower insurance costs is to shop their carrier. An Association can accomplish this in several ways but generally their appointed broker can offer alternative carriers in an effort to obtain the most competitive rates possible. Make sure your broker has access to all of the competitive markets in order to maximize the likelihood of finding savings.

Secondly, and more importantly, if savings is found, your broker should verify that all required coverages are included to secure the Association’s long-term financial security and lender approval. Additional savings can be realized by a thorough coverage analysis to verify the Association is not being over-insured by paying for coverage it won’t use. We are in a relatively soft insurance market, so an Association can expect savings of 2-5% from a simple review, depending on the number of claims that have occurred during the previous policy period.

To insure cost savings and long-term health of your property, make sure your insurance broker specializes in Condominium or Homeowners Associations. To maximize your savings, the Association, insurance broker and insurance carrier need to work in harmony in an effort to identify and reduce threats to the financial health of the community.

Help Reducing Claims

One of the best ways to keep insurance costs down is to avoid claims altogether. Some examples of how insurance brokers can help reduce claims and the impact claims have on your future premium costs include coverage reviews/benchmarking, claims management services, site inspections, building upgrade recommendations, life safety planning, vendor contract reviews, discrimination/harassment training and hiring/firing best practices.

Thank You

Andrew, thank you very much for providing your insight. I know from experience how much of an impact an insurance review can have on a condo budget, but also how important the right coverage can be when there’s an unexpected claim. One thing Board’s often overlook when they’re solely focused on price is the quality and speed of service when a claim in filed.

For example, if a pipe bursts and floods the gym and lobby, a Board should be confident that the work orders will be executed quickly so the building can be back on its feet without delay or headache. Unfortunately, most Boards don’t think about this until they’re dealing with it, and it’s too late. I encourage any Board/Treasurer to reach out to Andrew to review their policy. He does fantastic work and USI is a leader in Condo/HOA insurance policies in Northern Virginia. His contact info is:

Andrew Schlaffer, Vice President
USI Community Association Practice
www.usi.com
Direct: 703.205.8764
Email: Andrew.schlaffer@usi.com

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New Rosslyn Condo Project Unveiled (Jan 31 2017)

Question: What’s being built across the street from Turnberry Tower in Rosslyn?

Answer: We don’t see many new condo projects these days in Arlington, developers are going with apartments due to low interest rates and surging rents, so the new Key & Nash condo and townhome project in Rosslyn is a welcome addition to the neighborhood. Over the last five years, we’ve had an underwhelming number of condo deliveries.

Along the Rosslyn-Ballston corridor, the only new condo sales have been Arc 3409 in Virginia Square (converted from a hotel in 2014) and Gaslight Square in Rosslyn (luxury condos).

On Thursday evening, the Key & Nash team hosted an unveiling party on the 23rd floor of 1812 N. Moore (the Monday Properties/Goldman Sachs building that has sat empty the last few years) to release details of the project and start sales for a late-2017 delivery. Leading up to the project, I expected that NVHomes’ new Urban Division would look to successful nearby luxury projects like Gaslight Square, The Wooster, Rosslyn Key, and Rhodes Hill Square for their design and pricing with an emphasis on Gaslight Square considering its most recent success with Phase 3 (final build-out).

Instead of delivering a fully custom luxury product, NVHomes is sticking with their bread and butter formula of delivering a more moderate project that fits surprisingly well between Rosslyn’s mid-market options like The Atrium, The Belvedere, 1800 Wilson and its luxury options like Turnberry Tower, Waterview, and those mentioned above. It makes sense for NVHomes, avoids over-saturating the Rosslyn luxury market, and satisfies demand.

With just over sixty units including 1BR + den, 2BR, 2BR + den, and 3BR flats ranging from about 850sqft to just over 1,500 sq ft, plus five 3BR townhomes at nearly 2,000 sq ft there are a surprising number of options for buyers.  Starting in the low $600s and clearing the $1M mark for some of the larger flats and townhomes, it’s an attractive $/sq ft for a new building just a block from the metro and likely to benefit from the massive redevelopment of downtown Rosslyn. For market-average condo fees, residents will get a high-end gym, 7-day/week concierge, roof deck, large common terrace w/ grills, and underground parking.

I’m looking forward to seeing how the larger 2BR + den/3BR flats do compared to the townhomes. I think the challenge for the townhomes will be the fact that the master bedroom is the entire top floor, with the 2nd and 3rd bedrooms on the 2nd floor (main level is kitchen and living space), making it a difficult layout for buyers with a young child (prefer to sleep on the same level) and a lot of steps for regular trips between living space and master bedroom. However, with only five townhomes being delivered, they’ll probably be the first to sell-out.

Personally, I think the best value purchases are the 1BR + den and smaller 2BR/2BA because they’ll make great rental properties with the dens/2nd bedrooms being on opposite sides of the apartment from the master bedroom (ideal for roommates). If you’re planning to live there for a while and can afford the premium, there are two 2BRs with 500 sq ft private terraces and a handful of 1BR + den and 2BRs in the back with larger Limited Common Element terraces (only accessible to your unit, but technically common space) that offer hard-to-find “useable” outdoor space.

While there wasn’t anybody camping out for the sales office to open, the line to sign-up for a sales meeting on Thursday night reached 50+ people at some points and there were probably a few hundred people at the event. The R-B corridor and Arlington market is hungry for new condos and this delivers at a price range that meets a lot of budgets and designed to accommodate a range of buyer types, so I expect sales to move fairly quickly, even though people won’t get to step foot into a unit until the end of the year.

Feel free to reach out to me at Eli@RealtyDCMetro.com if you have any specific questions about the floor plans, pricing, location, sales process, etc or if you’re considering a purchase in the building. I’d be happy to discuss details and my thoughts on the investment potential of purchasing in Rosslyn.

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What Are The Biggest Mistakes Sellers Make?

Question: I came across an article you wrote about how buyers and sellers can avoid the most common problems encountered in a real estate transaction and it made me wonder what some of the most common mistakes are that home owners make when selling that have the biggest impact on their bottom line.

Answer: The biggest mistake a home owner can make when selling their home is not calling me first… kidding (but not really). Below are a handful of the biggest mistakes I see home owners make when selling their home, that have the most impact on their net bottom line. This is not exclusive to homes sold without an agent either. Unfortunately, I see many of the same mistakes on For Sale By Owner (FSBO) homes as I do on listings owners are paying an agent to manage.

Over-Investing In Updates

Choosing the right combination of updates to invest in (or not) to prepare your home for sale has the biggest impact on your net bottom line of any decision you’ll make. I cannot stress the importance of getting this decision right early in the process.

You should only invest in updates that will result in an ROI of greater than 100% or it’s a waste of money and time. Of course you will be able to sell your home for more money if you redo the kitchen and master bathroom, but in most cases, you’ll only get a fraction of your money back, generating a huge net loss for you.

Similarly, don’t spend $10,000 replacing floors, but ignore painting and leave your old brass doorknobs. Selecting the right “package” of updates that will generate the highest ROI is specific to your sub-market, budget, priorities and time of year.

Working with an agent on these decisions who works with both sellers and buyers is critical because they have a strong understanding of how buyers interact with homes during showings and the impact certain updates have on their buying decisions.

Stop Using Amateur Photography

My photographers are some of the most valuable assets I have because the quality of photos can make the difference between drawing heavy traffic and being passed over… Traffic = offers and heavy traffic = multiple offers. Buyers and agents are combing through a lot of homes to decide what is worth seeing in person and the quality of your photos influences that decision more than anything else. Do not take pictures with your cell phone. Do not use an amateur photographer. Do not use a photographer without real estate experience.

Listing On The Wrong Day

It’s Sunday evening… you’ve taken pictures, selected your asking price and spent all weekend cleaning so you’re finally ready to put your beautiful home on the market, make yourself a drink and watch the offers roll in. STOP. There is one day of the week that you should put your home on the market to maximize exposure while minimizing days on market (and two acceptable alternatives), but Sunday evening is not one of them. Feel free to email me to find out which day you should list your property and why.

Stage It… Vacant Or Not

I discussed this in detail earlier this year. It hasn’t changed. Yes, you should hire a staging professional.

Don’t Be Offended By The Home Inspection

You raised three amazing children in your home and kept up with regular maintenance for 25 years, so who is this buyer and their inspector to tell you there are 35 items that need to be repaired? It’s hard not to take the results of a home inspection and the resulting buyer requests (read: demands) personally, but you’ll be much better off keeping your emotions out of this final negotiation. Reference my advice to sellers for home inspections here.

Remember that this is likely just as emotional of a transaction for the buyers and the goal is to reach a equitable agreement, not start a fight to defend the pride you have in your home.

There are a host of other mistakes I see including over-pricing, limited showing times and not including a floor plan but the above highlight the most common errors that have the biggest impact on a home owner’s net bottom line.

If you’re considering selling your home, even if you’re 12+ months out, don’t hesitate to reach out to me to discuss strategies that will maximize your sale. You can reach me any time by email at Eli@EliResidential.com or phone at (703) 539-2529.

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Like To Negotiate? Buy Your Home In The Winter

Question: We are planning to buy a home in the next 12 months and wondering what the real estate market is like during the winter. We’ve heard it’s a bad time to sell, but does that mean we won’t be able to find anything we like?

Answer: I love working with buyers in the winter because we have more opportunity to negotiate (a nice reward for fumbling with keys in the dark when it’s 30 degrees) and the probability of finding a seller ready to negotiate increases substantially. In Northern Virginia, the winter market generally runs from late November through late February/early March (Thanksgiving to March Madness) and is defined by increased buyer leverage, less contract activity and fewer new listings. While many buyers can benefit from winter shopping, it’s not the right time for everybody.

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Buy In The Winter If…

  • You’re a bargain hunter
  • What you like is priced just outside of your budget
  • There is a regular supply of homes you like
  • You can accept having a few offers rejected

Wait For The Spring If…

  • You have specific, hard-to-find criteria
  • You value the perfect home over a great deal
  • Your purchase is contingent on selling your current home (requires additional conversation)

That’s not to say you can’t negotiate a great deal in the spring or find a unique property in the winter, but if you’re playing the odds, the above is a good set of guidelines for deciding the best seasons to focus on a purchase.

I’ll let you review the trends in Northern Virginia for yourself:

Buyer Leverage Increases In The Winter

In the winter, buyers pay about 2% less, relative to original asking price, than they do in the spring. On a $500,000 purchase, that’s $10,000 in savings.

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New Contracts To Purchase Drop By Half In The Winter

Buyers have more leverage in the winter because there are fewer of them actively searching the market.

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It’s Harder To Find What You Want

The probability of the home you want hitting the market in the winter drops substantially, making it difficult on selective buyers. This is also why fewer homes go under contract in the winter.  

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If you’re on the fence about buying this winter or not sure if you have time to prepare yourself to make a purchase, send me an email at Eli@EliResidential.com or give me a call at (703) 539-2529 to discuss your options and put a strategy in place.

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100th Ask Eli — How Am I Doing?

Today marks my 100th Ask Eli column, combining for nearly 60,000 words written about our local real estate market. How am I doing? What topics and statistics would you like to see more of?

One thing I’d like to do more of is use this space to help organize the community around ideas most residents care deeply about, but have little information on, like eliminating smoking from condos and saving/growing the tree canopy.

I appreciate everybody who has reached out with feedback, both positive and negative, and thoughtful questions that keep these columns relevant and organic. I also appreciate our active commenters who keep me on my toes and challenge me to back-up my opinions.

A special thank you to Scott Brodbeck and his team for providing us Arlingtonians a valuable source of hyper-local news coverage and a platform to discuss our opinions. Did you know that ARLnow is run from a small office with just a few people, not a newsrooms of fact-checkers, reporters, and writers? I was shocked by how much they accomplish with so few people. Kudos to Scott and his dedicated team.

Thank you for your support and I look forward to providing you with more honest, statistically-driven real estate discussion in my next 100 columns!

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How Old Is Arlington Housing?

Question: How old are most of the homes in Arlington and where are the newer homes located?

Answer: I thought I’d balance last week’s column on schools with something a bit less controversial… the age of our housing stock. The majority of housing units in Arlington were built from the 1930s through the 1950s.

With limited land available to build new communities, the majority of single family homes built in the 21st century are one-off projects replacing older homes instead of larger new communities you see elsewhere in the country.

I pulled data on all sales in Arlington since Jan 1, 2010 and broke it down by the decade. Each housing unit was built to provide some insight into the age of our market and where you’re likely to find the most homes for sale built in the 21st century. Note that this is not a dataset of all Arlington housing units, just those sold since 2010.

Data Highlights

  • About 40% of Arlington’s condo inventory was built in the 2000s and caters to our huge population of wealthy millennials
  • The fastest selling (highest demand) sub-market is for 1940s townhomes in Fairlington, a popular destination for young families due to affordability, convenience and walkability to Shirlington Village
  • Despite the average family size in the US decreasing by about one person since the mid 1900s, the average single family home built in the 21st century has 1.5 more bedrooms, 2 more bathrooms and is over twice the size (they also take the longest to sell)
  • The oldest home sold since 2010 was built in 1836 and located in the Alcova Heights neighborhood (off Glebe Rd, between Rt 50 and Columbia Pike) and sold for $950,000
  • Nearly half of single family homes built in the 21st century are located in the 22207 zip code
  • Housing built in the 1940s (4,647) and 2000s (4,218) make up 40% of the housing units sold since 2010
  • Single family homes built in the 1940s sell fastest among all single family homes, likely due to demand for homes to be torn down or expanded and renovated

 

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Data broken out by housing type and the decade it was built:

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Concentration of housing built in the 21st century, broken out type of housing, by zip code:

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Arlington School District With The Most Value

Question: How do Arlington County school systems impact the market price of homes in Arlington? Which districts offer the most value based on quality of education and the cost of buying a home?

Answer: For most families, finding the right home in Northern Virginia is a delicate balance of budget, schools and commute, with the latter two having the biggest impact on market price. If you’ve chosen to put down roots in Arlington, I’ve put together some data on Arlington County Public School districts for middle school and high school that will help you understand how your school district selection will impact your budget.

The Data

Please note that the data below is not based on all homes sold within a given school district. It is a sampling of homes within a specific sub-market in an attempt to present an apples-to-apples comparison of the premium/discount buyers can expect when searching within each district, that can be applied to other sub-markets. For example, the average sold price for homes in the Jefferson+Wakefield district is far less than $1M, but within the chosen sub-market, it is just over $1M.

In order to compare homes within a relatively similar and popular sub-market, I have chosen to use sales dating back to Jan 1, 2014 for detached homes built within the last 20 years with at least four bedrooms, excluding distressed sales. This prevents sales of tear-downs/full renovation homes from throwing off the data and gives us a pretty clear picture of the relative cost differential by school district. Not every home listing is populated with school districts (I estimate that 5-10% is missing at least one school), so those sales are excluded from the data. That is why the total sales for just middle school and just high school data are slightly higher than middle and high school combined data, because some listings just had one of the two fields populated.

School Rankings

GS Rating = GreatSchools.org rating for each school. I thought this would be an interesting, objective way to compare relative value based on a 3rd party rating, which has a huge influence on buyers’ decisions. You may also want to check out Niche.com for some different rankings of our publics schools and where Arlington County is ranked as the #1 school district in the DC area and in Virginia or US News and World Report for national rankings of our high schools.

Data Summary

For those of you familiar with the Arlington County Public School system and its impact on home prices, most of this data falls in line with expectations. Here are some comments on the findings:

  • Williamsburg+Yorktown is the highest rated school district combination in Arlington and, unsurprisingly, the most expensive to buy into.
  • Kenmore+Wakefield is the lowest rated school district combination in Arlington, but the second least expensive to buy into. However, due to the relatively low number of sales in this sub-market, the data here is slightly misleading because 2/3 of the sales are new construction which have a substantial impact on average sold price. The low number of total sales is due to the limited number of homes sold that are built in the last 20 years, not the a reflection on the total number of homes sold.
  • The best bang for your buck is the Swanson+Yorktown combination, offering the lowest cost per rating point (GreatSchools)
  • Despite having the fourth highest combined rating score (GreatSchools), Jefferson+Washington Lee is the second most expensive district to buy into. Why? It serves the popular and expensive Lyon Park community.
  • For reference, here are the Arlington County Middle School and High Schoolboundary maps.
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Once again, please remember that this is a limited data set meant to provide relative cost differential between school districts that can be applied across sub-markets. I chose to use this sub-market (described in Data section) because it offers, in my opinion, the cleanest results available. The sold prices within this sub-market are the most expensive in Arlington because it includes homes built in the last 20 years. Each district has numerous opportunities to buy detached homes at much lower prices, as well as townhouse and apartments for even less.

Which District Do You Think Offers The Most Value?

What do you think about this data? Even more importantly, for those of you who have children in Arlington County Public Schools, which districts do you think offer the most value for families, meaning, the best education relative to the cost of a house in that district?

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Douglas Park Neighborhood Spotlight

Where is it?

Douglas Park is a large neighborhood in South Arlington bordered by Columbia Pike to the north, S. Four Mile Run Drive to the west, S. Walter Reed Drive to the east, and ends at the intersection of each of those roads to the south.

It hosts multiple parks and Randolph Elementary School, although households in the southern portion of the neighborhood go to Hoffman-Boston Elementary and students in the northwestern corner are districted to Barcroft Elementary School. The majority of households are districted to Jefferson Middle School, but the Barcroft Elementary households in the northwest corner end up at Kenmore Middle School. Every household in Douglas Park ends up at Wakefield High School.

Douglas Park is a blended neighborhood of mostly residential housing, ranging from affordable multi-family buildings for rent or purchase along the northern and eastern borders, a few pockets of town homes built in the 1960s and again in the 2000s, but mostly single family homes build in the early/mid-1900s many of which are cape cods and bungalows that are popular targets for renovations and expansions.

About the interviewee:

Anne and her husband, Horacio, met in Colombia (the country) and moved to Shirlington in early 2015 before buying their home, where they’re raising two young children. They weren’t in a hurry to move, but found a home with potential on a street they loved, and bought their Douglas Park Cape Cod in late 2015.

They spent about three months renovating the kitchen, refinishing floors, and giving the house new life while trying to maintain the original charm as much as possible. Just after moving in, they dealt with some pipe issues that required them to tear up a lot of their front yard, but turned a bad situation into a positive by introducing some beautiful landscaping and hardscaping out front.

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What do you love about Douglas Park?

We’re part of an incredible community here. Being a bi-lingual family, we love living in a bi-lingual neighborhood. An added plus that we hadn’t thought to be so important before experiencing it, is the cross-generational interaction. The young families who just moved in hang out with neighbors who have lived here for decades.

It’s also very front-yard focused, so in the evenings and weekends, you’ll see most of the neighborhood out front, spending time together, not tucked away privately in their backyards (note: this was highlighted in the Claremont Neighborhood Spotlight and a trend in many South Arlington neighborhoods). It’s a beautiful, engaged, diverse community.

We also have great access to public transportation, despite not being near a Metro station. Whenever I can, I take the bus to work in Courthouse. Also, despite not having sidewalks, the streets are wide enough for kids to safely ride bikes and walk without being in danger.

 

What are some of your local favorites?

We’re so close to our favorite places in Shirlington and along Columbia Pike like Lost Dog, Thai Shirlington, Twisted Vines, Sugar Shack and Tacos & Tortas. We split grocery shopping between the Harris Teeter in Shirlington and Giant on Columbia Pike. We also spend a lot of time at Monroe and Douglas Parks because they are at either end of our street.

Do you have any experience with the school system?

Our kids are too young for APS still — they go to daycare, one in Douglas Park and another in Courthouse. We’re very happy with both. We are eager for when the kids can enter the public schools though.

Originally one of the reasons we moved to Arlington is because we were excited to send our kids to a bi-lingual elementary school, like Claremont or Key. Now that we’ve settled in Douglas Park, and can see Randolph Elementary from the front door, our kids will most likely go there.

We know that some of the schools in South Arlington rank lower than those to the north. My sister-in-law is a teacher in the APS and insists even the lowest ranking in Arlington is better than most of the schools in the country. Our neighbors who sent their kids through the neighborhood schools rave about the education as well.

Are there any neighborhood events?

The Fourth of July holiday is a lot of fun here. We have a parade, a big picnic, and a bunch of neighbors set off their own fireworks. There’s also a traveling potluck dinner that is well-attended and a fun way to meet new neighbors and hear our neighborhood historians tells stories about the families who have lived in each house.

What has your overall experience been?

We feel lucky to have ended up here, it’s better than we could have ever imagined. Everybody is so friendly and it’s been a huge help while raising two young kids, especially our energetic, social son (I can vouch for that!). The sense of community happened immediately and we look forward to being here for a very long time.

Thank you so much for your interview Anne and Horacio! I’m sure this will help people considering a move into or within Arlington who are looking for an affordable, family-friendly community like you described.

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Does A Pool Help Or Hurt When Selling?

Question: We installed an in-ground pool when we bought our house and now that we’re considering selling it, we’re wondering if it’s better to improve the condition of the pool or fill it in and replace it with more usable space.

Answer:

You Will Lose A Lot Of Buyers…

You will lose the majority of your buyer pool (pun intended) by offering your home for sale with a pool. With limited months of the year warm enough to use a pool, limited yard space, and high maintenance costs, most Arlington home buyers consider an in-ground pool a deal-breaker. You’ll see from the Fairfax County data that this is true for Northern Virginia, not just Arlington.

…But It May Not Matter In Arlington

This does not mean you should spends tens of thousands filling your pool in and covering it with new landscaping. Arlington has so few homes for sale with a pool that despite losing a large percentage of your potential buyers, you’re likely to benefit from the pool because it’s such a unique feature. Remember, it only takes one person/family to buy your home.

Arlington & Fairfax County Data

Since January 1 2012, only 29 detached homes have sold in Arlington with an in-ground pool, while during that same period, 1,548 homes in Fairfax County sold with an in-ground pool.

Arlington sellers with a pool fared well with an average of only 29.3 days on market, compared to about 50 days on market for all other detached homes. 18 of the 29 sales sold in 10 days or less.

On average, those 29 sales were 3 percent lower than the original asking price, with a county average during that period closer to 2.5 percent, but not everybody sold at a discount because 11 of the 29 sales sold for at or above the asking price.

Arlington has so few homes with in-ground pools, that we have to look to Fairfax County to gather some meaningful data:

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During this time, detached homes spent an average of about 60 days on market and sold for about 97.5 percent of their original asking price.

As you can see from the table above, it took nearly 40 percent longer to sell a home with an in-ground pool and buyers negotiated an average of 3 percent more off of the original asking price. This supports the idea that most buyers in Northern Virginia don’t want a pool, but the lack of available inventory in Arlington offsets that and can be turned into a positive for sellers.

Take Notes From Fairfax, Timing Matters

The above table for Fairfax County also highlights that if you’re going to sell a home with a pool, you should do so within the spring market so your buyer has the immediate satisfaction of using it for a full season after they purchase.

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Impact Of Condo Fees On Resale

Question: I live in a building with above average condo fees and am wondering what impact the condo fees will have when I decide to sell?

Answer:

On Average

The average condo fee for a one bedroom apartment in Arlington is $397/month and $530/month for a two bedroom unit. On average, owners pay 50 cents per square foot they own. Looking at my favorite sales indicators, days on market and sold price to original ask ratio, there is a direct correlation between higher condo fees and the number of days on market, as well as between higher condo fees and greater buyer discounts from the original asking price (see first and second data tables below).

Pricing Around Fees

When pricing your condo, you must factor in the monthly fees compared to condos in similar communities.  Since buyers manage their total monthly payment, along with the total sale price, consider that on a 30 year mortgage with a 4 percent interest rate, increasing the mortgage by $21,000 increasing the monthly payment by $100. Thus, as a simple rule of thumb, for every $100/month difference in condo fees on a comparable unit, there should be an adjustment of about $20,000 in market value.

Data Summaries

There’s a lot of important information hidden behind data on condo fees like building services/amenities and the inclusion or exclusion of utilities and/or cable and internet, but the data on condo fees in Arlington is valuable nonetheless.

The following data summary represents apartment-style condo sales in Arlington over the last four years, broken down by condo fee ranges. Of note is that as the fee and fee per square foot increases, so does the time it takes to sell and percentage discount buyers negotiate of the asking price.

Note that of the $1,000+ fee sales, one third are from Turnberry Tower, Arlington’s premier luxury building, and another 15 percent are from Crystal Gateway, a building with expansive floor plans and the largest amenity package of any community in Arlington.

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The following table is a cross section of the above data set, limited to sales that closed from $250,000 to $500,000, thus presenting the data within a more comparable sub-market.

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How much does a building’s age impact the condo fees?

Most people would say that older buildings have higher condo fees because they have higher maintenance and replacement costs. Let’s take a look at the data for one and two bedrooms sales, by the decade it the community was built.

Of note is that the buildings from the 1950s and earlier have the most limited (or non-existent) amenities and there seems to be a jump in fees per square foot in buildings as they reach the 20 year mark, but leveling off after that, in-line with my expectations because most major systems require expensive repairs or replacement around the 20-30 year mark.

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In order to truly understand the impact of condo fees on your condo, it’s necessary to drill down a few more levels within your specific sub-market(s). If you’re interested in exploring condo fee data for your unit, feel free to email me at Eli@EliResidential.comand I’d be happy to provide you with a more customized data summary.

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What It Means To Sell ‘As-Is’

Question: This is in response to recent comments on my columns about what it means to sell “as-is.”

Answer: Selling a property “as-is” in Northern Virginia carries a technical definition as stated in the contract and an intended purpose that should be discussed between the buyer and seller.

Technical/Contractual Definition

In Northern Virginia’s Contingencies/Clauses Addendum you’ll find a section for selling “as-is” which contains the following terms that can be individually selected for the contract:

  • Seller will not clean or remove debris. The standard is for the property to be free of trash/debris and broom clean.
  • The seller is not responsible for addressing any wood destroying insect/termite issues. The standard agreement requires the seller to pay for any damage from wood destroying insects.
  • The seller is not required to fix any Homeowners Association violations related to the physical condition of the property.
  • The seller is not responsible for providing working smoke detectors.
  • The seller is not responsible for compliance with notices of violation from local authorities.

Implied Definition

When you market a property as-is, you are implying that you will not negotiate with the buyer to fix anything and the buyer should be prepared to take on the full risk of the property in its current condition. Generally, this means a buyer will agree to take the property in the condition it is in at the time of offer and that the contract is not contingent on a home inspection (buyer withdraws the right to negotiate or void based on home inspection results).

However, you may consider accepting a short pass/fail inspection contingency whereby the buyer does not have a right to negotiate credits or fixes, but does have the right to void the contract if they find any major problems with the home during the inspection.

Who Uses As-Is?

It is common to see estate sales and homes that will be the targeted by investors (tear downs or flips) being sold as-is. In the case of many estate sales, the family member(s) who inherited the property may not live nearby, know anything about the condition of its systems, or want to be bothered by negotiations after a deal has been made. It doesn’t necessarily mean the property has problems.

Understand Your Choice

As a seller, you want to make sure you understand the message you’re sending and buyers you’re targeting when you market a home as-is. You also need to be realistic about how this will impact the sale price (discounted). As a buyer, you want to make sure you understand why a home is being sold as-is, what the seller’s contractual and implied expectations are, and be prepared to handle the risks associated with buying as-is.

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Aurora Highlands Neighborhood Spotlight

Where is it? Most people would consider Aurora Highlands to be Crystal City and Pentagon City because to the north, it contains the Pentagon City mall, borders S. Eads Street to the east, Virginia Highlands Park/S. Joyce Street to the west, and the southern tip of Arlington along S. Glebe Road to the south.

It’s a diverse neighborhood with everything from large apartment buildings to residential streets lined with cape cods and brand new Craftsman homes, mixed in with the mall, office space, dining and retail.

Unlike most neighborhoods with single family homes, Aurora Highlands has easy access to two Metro stations and you can’t live closer to Reagan National Airport! Students living in Aurora Highlands attend Oakridge Elementary, Gunston Middle and Wakefield High Schools.

About the interviewee: Lisa Curtin moved from the Chicago suburbs to her apartment at Crystal House in 2015 when she was relocated for her career in Student Tourism. Shortly after the move, she became the COO of an Accounting firm in Bethesda, but loves the neighborhood so much that she’d rather commute every day to Bethesda than move closer to work.

She picked Crystal House because she’d never lived in a city before, loved the larger, renovated apartments, and was located close to the Crystal City Underground. Lisa is strongly considering buying nearby once she’s done renting.

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What do you love about Aurora Highlands?

Where do I start? The accessibility to the Metro and major roads for commuting and going out couldn’t be better; we’re a few quick stops to downtown D.C. Within a few blocks there are parks, family-owned bars and restaurants, shopping and trails.

Where do you shop, eat, and hang out?

I love Tortoise & Hare (have to try the loaded tater tots), Crystal City Sports Pub and Freddie’s Beach Bar. I do most of my grocery shopping at the Harris Teeter or Aldi and work out at the new Orange Theory.

I also walk on the Four Mile Run and Mount Vernon Trails, and hang out at Long Branch Park when the weather is nice. I suggest everybody check out Fridays at the Foundation(pictured), if they haven’t already.

Do you have any experience with the school system?

I don’t personally, but my neighbors considered sending their kids to private school and decided to stick with the local public schools and are very happy with their experience at Oakridge Elementary School. They intend for their kids to use the public school system serving our neighborhood through high school!

What sort of identity does Aurora Highlands have?

I don’t think most people understand that Aurora Highlands is its own neighborhood, adjacent to Crystal City and Pentagon City, so we’re doing a lot to identify ourselves with new signage and a strong Civic Association. It’s such a unique pocket of Arlington because it has traditional single family neighborhoods alongside condos, apartments, office space and retail.

It gives the neighborhood a vibrancy that’s hard to match and there’s a great mood walking around because people take care of themselves and the community. You get all of these city-like benefits but at a much more affordable price than other parts of Arlington and D.C.

Thank you so much for your interview Lisa! I’m sure this will help people considering a move into or within Arlington who are looking for the type of community you described.

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New Construction vs. Resale Price Comparison

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New Construction vs. Resale Price Comparison

Question: We are ready to move into a house we’ll raise our family in and are set on Arlington. We want a newer home, but are not sure if it’s better to buy new construction or resale; our decision will ultimately be a financial one.

Can you put together numbers that show how the sale prices of new construction compare to resale?

Answer: Of course I can! When weighing the financial decision of new construction vs. resale, you’ll also want to consider the replacement cost of major systems like HVAC, windows, roof, water heater, appliances, etc. that carry life cycles of 10-30 years (appliances being on the early side, roof/windows coming later) as well as higher efficiency factors of new homes that significantly reduce utility costs. Many new homes also come with extended “bumper-to-bumper” warranties that you won’t get in resale.

As expected, there’s a clear premium to be paid for new construction and buyers tend to negotiate a deeper discount from the original asking price on homes being resold. The dataset is based on sales since January 1, 2014 for detached homes built since 2000 with 4-6 bedrooms, 3-5 bathrooms, and 3-4 levels.

 

Are these numbers in-line with what you expect to see on the difference in sold price between new construction and resale? Are the prices about what you assumed for new/newish homes by zip code?

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Clarendon Neighborhood Spotlight

Where is it? Clarendon is probably the most recognizable, well-known neighborhood in Arlington. Those outside of Arlington often refer to the entire Rosslyn-Ballston corridor as Clarendon.

Technically it is bound by Wilson Blvd to the north, 10th St N. to the south, Washington Blvd to the west, and N. Danville Street to the east (eastern border is based on the boundaries of the Clarendon Sector Plan).

Clarendon is known for its lively dining and retail scene, along with being host to a popular chains like an Apple Store and Whole Foods, where the parking line regularly overflows into the street.

From rooftop bars, numerous restaurants and high-end retail, Clarendon attracts people of all ages to its massive condo and apartment complexes, as well as droves of patrons from outside the neighborhood. Depending on your preference for entertainment, it’s either the place to be or the place to avoid on Saturday nights. The neighborhood is built around the Clarendon Metro station, which is located on the Orange and Silver lines.

About the interviewee: Tim Donaldson moved to Clarendon in 2014 after spending eight years in Los Angeles, and chose the area because it provides the walkability of a city, but he can hop in his truck any time and quickly be on the highway, which he can’t do from D.C.

He started as a renter in The Phoenix, a popular condo building at 1020 N. Highland Street, and loved it enough to buy a two-bedroom condo after one year. He loves the amenities, and chose to buy because of how well run it is due to the long tenure of its staff.

What do you love about Clarendon?

I love the balance of being able to walk to everything, but not having to fight through city traffic to get to a highway, which I do often for work and to fish. It’s a big city lifestyle, but more laid back. You also have the convenience and familiarity of successful chains like Whole Foods, Starbucks, Cheesecake Factory and Lululemon, but also some great non-chain places for music and craft beer/wine. I’m sad the record store closed!

Where do you shop, eat, and hang out?

My wife and I have a long list of favorites all within a few blocks. Green Pig Bistro is our date night spot, we’re regulars at Lyon Hall, I go to Fireworks for their great beer menu, Galaxy Hut for awesome music, Ambar’s all-you-can-eat is the best deal around, Texas Jacks BBQ is second to none (I agree), love the classics like Liberty Tavern and Bonchon, and the new Spirit of 76 is a cool, cozy bar! We love being able to walk to Whole Foods or Trader Joes for groceries.

Do you take advantage of nearby parks and trails?

I take weekly walks at Potomac Overlook and Zachary Taylor parks and love biking the WO&D, Four Mile Run, and Mount Vernon trails. I know there are parks closer by, but I love hiking and biking those areas.

How has your overall experience been in Clarendon?

Very positive! I’d love to be able to buy a single-family home in Lyon Park (adjacent neighborhood) so I can stay close to Clarendon. People mostly associate Clarendon with weekend partying, but it’s an incredible community with an art show, crafts fair, and bike race during the year. Most of the businesses put out water bowls for dogs in the summer and there’s always families out pushing kids in strollers, which gives the whole neighborhood a feel of closeness that I love being part of.

Thank you so much for your interview Tim! I’m sure this will help people considering a move into or within Arlington who are looking for a vibrant, walkable community like you described.

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