Question: I saw last week’s Washingtonian article that Ballston is a top 5 hottest neighborhood in the D.C. metro area with median price growth of 10%. Is the Ballston market really that hot?
There’s no doubt that Ballston has become a much more desirable place to live over the last few years and will continue that trend with the upcoming Ballston Quarterredevelopment of the Ballston Common (Mall), but the Washingtonian article is a good example of why it’s so difficult to produce really good data analysis on a local level, without being intimately familiar with the area. Some quick notes on the data they used:
- They consider Ballston the 22203 zip code, which covers a lot of area most people wouldn’t consider Ballston and does not include areas north of the metro that are in Ballston, including many condo buildings like the Eastview, Westview, and The Berkeley.
- They include sales from The Jefferson at 900 Taylor St, which is an anomaly in market research because it’s a senior living community, with a much different cost structure (sold prices are significantly lower). As a matter of fact, when I removed The Jefferson sales, the YoY median price growth in 22203 increased from the reported 10% to 18.4%.
So is this real growth? Are buyers that excited about the Mike Isabella restaurants and upcoming Ballston Quarter? Should owners in 22203 cash in immediately? Here’s where the growth came from:
- Ballston Row Townhomes: Ballston Row is a community of new, high-end townhomes that sell from the high 700s to just over $1M. In 2014, these homes represented only 2.5% of recorded sales (7 of 281) versus 8% (23 of 289) in 2015, with an average sold price nearly $45k higher in 2015 to boot. This flood of high-end sales, averaging over $300,000 more than the rest of the 22203 market, had a significant impact on YoY median price growth.
- Single Family/Detached Homes: Another area of growth was for single family/detached homes. Within the SFH sub-market there was YoY growth of 5.7%, which I believe is driven in large part from older homes being bought by developers for renovations or re-builds to meet the high demand for high-end homes in North Arlington.
- (Not) Condos: As I mentioned earlier, the 22203 zip code leaves out a large number of key Ballston condo buildings, so this isn’t a good time to measure the YoY growth of Ballston condos, but within 22203, there was only .1% YoY growth within the condo market. I believe that a newer building like the Residences at Liberty Center will do quite well once Ballston Quarter is complete.
The answer to the question is “yes” Ballston is a hot market and there’s high demand in the luxury, high-end pricing market that has pushed the median sold price up, but the majority of home owners in 22203 shouldn’t expect to see double digit increases in their property value like the Washingtonian article suggests.
For buyers, this is a good reason to consider Ballston because most property values haven’t jumped too much and there’s large-scale development on the horizon that promises to boost the entire market once it’s established.
Do you think Ballston is the hottest market in Arlington? What about other neighborhoods like the eastern section of Columbia Pike, Rosslyn, and Crystal City?