Question: I recently read an article by the Sun Gazette that median price per square foot was down since last year in Arlington and the rest of Northern VA. Is that what you’re seeing in the market, despite reports of prices going up?
Answer: I read that article as well and was equally confused by the statistic that $/sqft was down 6.8% in Arlington in the first nine months of 2019 compared to the first nine months of 2018. While this data point may be technically correct, it doesn’t accurately represent what’s happening in the Arlington/Northern VA marketplace. Even without having access to the data behind it, does anybody believe that with all the news about the Amazon-effect on Arlington’s real estate market, that people are paying less per square foot in 2019?
Price-per-square-foot Is Actually Up (obviously)
The truth is that while the median $/sqft did drop year-over-year in the first nine months of 2019, it was actually due to a shift in the type of inventory that sold, not because buyers are getting more for their money. As I pointed out earlier this year in an article about a national news story on Arlington’s real estate market, it’s easy to find market data that sounds interesting (aka generates reader clicks) but doesn’t tell an accurate story.
When I drilled into the 2018 vs 2019 data on median and average $/sqft, I found that within comparable sub-markets (e.g. 2BR condos, 4BR single-family, etc) median and average $/sqft increased year-over-year. In fact, if you use average $/sqft instead of median, like the article references, there was a 9.5% increase across Arlington. In this case average is a better statistical measure than median, but of course the median $/sqft made for a better story.
Accurate Headlines From The First Nine Months
While I have the data together comparing the first nine months of 2019 to the first nine months of 2018, I’ll go ahead and offer up five headlines that accurately represent the Arlington real estate market through September 2019:
- The market is up, but not by as much as you might thing based on some new stories. The average purchase price in Arlington jumped 5.8% to just over $722,000.
- A lack of inventory drove total sales down by 8%, with the biggest drop-off showing up in the condo market which suffered from a 12.3% drop in sales, led by a 13.6% drop in two-bedroom condo sales.
- The price range of the middle 50% of homes jumped from $380,000-$864,300 in 2018 to $415,000-$916,000 in 2019, a 9.2% increase in the lower limit and a 6% increase in the upper limit. This indicates that the Amazon-effect is impacting lower price points faster than upper price points which makes sense because investors and other speculators are more likely to purchase at lower prices.
- Good properties sold much faster in 2019 with 62.7% of homes selling in the first 10 days, compared to 46.4% in 2018. The craziest stat? 85.5% of 2BR townhomes/duplexes sold within the first 10 days.
- Price growth in the 22202 zip code, the area surrounding Pentagon City and Crystal City aka National Landing aka Bezosville, led all Arlington zip codes with a 13.7% jump in average sold price.
If you ever run across market data you’re not sure about or would like a customized data analysis, please reach out to me at Eli@EliResidential.com.