Question: How fast are homes selling in Arlington this year and how does that compare to previous years?
Answer: Days on Market measures the number of days between a home being listed for sale and when it goes under contract. Low days on market is one of the leading indicators of a hot market and signals future price appreciation.
The most common way to measure this is average or median Days on Market, currently 33 days and 9 days over the last six months in Arlington, but I also like to track the percentage of homes that go under contract within the first ten days. I generally find that this metric gives buyers and sellers a better feel of the market.
Fast & Furious 2019
The percentage of homes that go under contract within ten days has skyrocketed in 2019, doubling the rate seen in 2015 and 2016. Below, you can see how demand for South Arlington homes has been increasing relative to North Arlington over the last three years, not just since the Amazon HQ2 announcement in November 2018.
The table below breaks the market down a bit further by number of bedrooms within each market. Note the incredible demand of one- and two-bedroom homes (mostly condos) in South Arlington, with well over 80% going under contract within ten days. Even more impressive is that only about 25% of one-bedroom South Arlington properties were selling within ten days as recently as 2015 and 2016. If you bought one before the madness, congratulations!
Prepare To Pay
Sellers control the negotiations during the first ten days of a sale and the price paid on homes going under contract within the first ten days reflect that, with an average purchase price well above the asking price.
The table below breaks the market down a bit further by number of bedrooms within each market. It is based on net sold price (sold price less any seller credits). In South Arlington, homes that go under contract within the first ten days on market are averaging a net sold price nearly 2% higher than the seller’s asking price. One important takeaway from this data is that in 2019 buyers making an offer on a property that has recently hit the market have become accustom to including escalations, which is why you see average prices well above the asking price.
What Does It Mean?
Unsurprisingly, some national studies have determined that Arlington and Alexandria are the country’s hottest real estate markets. That’s great news for home owners, especially those looking to make a move into a less expensive market, renting, or downsizing. The frustration for buyers comes from all sides as well. There’s very little inventory to choose from and, as detailed above, good inventory moves quickly and for a premium.
If you’re considering selling, it’s important to understand just how high you can price your home without overpricing and missing the market, which can lead poor results.
If you’re hoping to buy a home, planning and preparation are critical. Despite the market conditions, I have worked with a lot of buyers this year who have found success in Arlington, but it requires the right approach.
I am available every day of the week to meet or schedule a call if you’d like to discuss your options to buy, sell, or rent in Arlington or the surrounding Northern VA, DC, and MD Suburb communities. Just send me an email at Eli@EliResidential.com to schedule some time to talk.