Demand and Showing Activity Slowing Down

Question: Have you seen a drop in demand and buyer activity recently?

Answer: There has been a modest, but noticeable drop in the intensity of demand and buyer activity over the last 3-4 weeks. I’m seeing fewer showings/offers and more price reductions and cases of homes lasting through the first week on market. I saw signs of it in the second half of April, but it became most noticeable in May.

But let me be clear, we are still very much in a seller’s market. I expect prices to hold in many cases and continue increasing in some, but the frequency and number of escalations should start to ease (already has) and buyers may find themselves able to secure some contract protections (contingencies) they couldn’t before.

DC Area Demand Index Tapers, Arlington Remains Strongest Market

Below you will see the Bright MLS Home Demand Index for the DC area. From July 2021 through February 2022, demand trailed its year-over-year (YoY) counterpart and even came close to matching the YoY demand reading in February 2022. However, you’ll see a noticeable separation in YoY demand taking place in March and especially April. I expect these lines to separate even further in May.

It’s worth noting that, with a demand reading of 227, Arlington has the highest demand reading in this index amongst the nine jurisdictions included in the Washington DC area index, followed by Alexandria at 190 and Fairfax at 151.

Arlington Showing Activity Drops

I pulled data on total showings and showings per listing for Feb 1-May 23 2021 and 2022 on homes priced from $500k to $1.7M, with combined data for all price points at the top of each table. For those not interested in examining the data in detail, here are the highlights:

  • Activity surged in the beginning of the year and shifted in April/May (I think this started in mid/late April)
    • Showings per listing increased 20-26% YoY from February-April 2022, but decreased 12% YoY in May 2022
    • Total showings were up a more modest 9% and 3% YoY in February and March 2022, respectively, but dropped by 11% and 25% YoY in April and May 2022, respectively
  • Historically, we have seen showings slowdown from April to May, but the rate of the slowdown in 2022 compared to 2021 is significant
    • From April 2021 to May 2021, showings per listing dropped 21%, but from April 2022 to May 2022, showings per listing dropped 43%
    • From April 2021 to May 2021, total showings dropped 31%, but from April 2022 to May 2022, total showings dropped 42%
  • In February and March, nearly every price range experienced a YoY increase in showings per listing and most experienced an increase in total showings as well. By April, the changes were split evenly between increased and decreased activity, but in May nearly every price range experienced a YoY decrease. 

I will continue to track market data for you and in a couple months, once most of the spring contracts have closed, we will be able to measure how some of these early indicators of weaker demand effect price metrics.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate | @properties, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.

Caveat Emptor – Let The Buyer Beware!

Question: What responsibility does a seller have to disclosure problems with their home?

Answer: Sellers cannot lie about or conceal material defects of their home, but in Virginia, property owners are under no responsibility to disclose them to a buyer. That’s because Virginia is one of the few states in the US still operating under the common law concept of Caveat Emptor, meaning “Let The Buyer Beware.” This places the duty of discovery (of defects) on the homebuyer. Per Bankrate.com, the other states include Alabama, Arkansas, Georgia, North Dakota, and Wyoming.

Residential Property Disclosure

The Residential Property Disclosure is required in most transactions except for sales between relatives, foreclosures, builders, and a handful of other scenarios. The Disclosure, signed by the seller and buyer, states that the homeowner(s) makes no representations or warranties with respect to things like:

  • Property Condition
  • Sexual Offenders
  • Adjacent Parcels
  • Wastewater Systems
  • Historic Districts

Alternatively, jurisdictions like Washington DC and Maryland require extensive disclosures by homeowners. The DC Disclosure runs 4+ pages long and requires owners to make representations on every material aspect of the property and community including roof, insulation, heating/cooling, appliances, drainage, zoning, and more.

Realtors Held To A Higher Standard

While Virginia homeowners aren’t required to disclose defects, the Realtor Code of Ethics holds us to a higher standard. A listing agent who is a Realtor “shall disclose to prospective buyers/tenants (customers) all material adverse facts pertaining to the physical condition of the property which are actually known by the licensee.”

While listing agents don’t have a duty to discover latent defects, they are required to communicate anything they’re made aware of through the standard course of the transaction be it discussions with the seller, inspection of the property, or otherwise.

Should Virginia Change?

Personally, I’d like to see Virginia make changes to the seller disclosure laws to balance the scales a bit. One could make a case that increasing disclosure requirements would reduce buyer risk, thereby making Virginia homes more valuable and pushing home values up across the board (sellers would still have the ability to offer “As-Is”). It would be particularly valuable in a market like we’ve had the last few years where due diligence periods are shortened or waived completely.

As a counterpoint, buyers in jurisdictions with heavy disclosure requirements can rely too much on what the seller says/does not say and fall victim to a seller simply not being aware of a defect that a buyer could have discovered through due diligence.

What do you think? Are you happy with the current system or would you like to see Virginia get rid of Caveat Emptor and place more duty on the seller to disclose material defects? 

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate | @properties, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.

The Effect of Boeing’s Headquarters on Arlington Real Estate

Question: What effect will the recently announced move of Boeing’s Headquarters to Arlington have on our real estate market?

Answer: I got this question from quite a few people over the past week, but it wasn’t until my Mom asked that I decided it needed to be this week’s topic!

The news itself, Arlington becomes Boeing’s Global Headquarters, seemed to be another massive shock to our real estate market just a few years after Amazon’s HQ2 announcement sent demand through the roof. Fortunately or unfortunately (depending on whether you’re on the buying or selling side), that is not the case and it’s unlikely to have a material effect on the housing market in the near or mid-term.

For now, Boeing is not planning much of a change in their workforce in Arlington or Chicago, where they’re currently headquarter. The CEO and CFO offices will move to Arlington, but that seems to be the extent of the immediate workforce changes planned.

It’s possible that in some one-off scenarios, this news will give more confidence in our local housing market to some buyers and investors and result in a willingness to make a better offer or an offer they otherwise may not have. However, it’s unlikely these cases will cause any sort of noticeable trend in an already thriving real estate market.

I do expect a longer-term positive effect (4-5+ years out) on the Arlington real estate market for a few reasons:

  1. It’s probably a safe bet to assume that future workforce growth, office expansion, and community investment will focus in Arlington
  2. As with Amazon, smaller companies and start-ups in the Boeing orbit will be more likely to carve out space in and around Arlington
  3. Hosting powerful and diverse corporate name brands like Boeing, Amazon, and Nestle significantly increases the likelihood of Arlington (and surrounding markets like Tysons and Reston) landing at the top of the list for other Fortune 500/1000 companies to relocate their headquarters here. In my opinion, this is the most important effect of Boeing’s Global HQ announcement.

As we grapple with some difficult and unique market forces – supply/demand disconnect, surging interest rates, soaring inflation, plummeting stock-market, and signs of a potential recession – news like Boeing’s choice to move its Global HQ to Arlington is an important reminder of the long-term strength of our housing market and its resilience in the face of economic headwinds.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate | @properties, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.

Condos Must Be Aware of New Fannie Mae Guidelines

Question: Can you summarize the important details of Fannie Mae’s new condo loan deferred maintenance requirements?

Answer: In response to the collapse of the condo building in Surfside, FL last year, Fannie Mae issued new “temporary” lending requirements, effective Jan 1 2022, for Condos and Co-ops to protect against future deferred maintenance issues and, hopefully, incentivize Associations to address issues faster.

I will highlight some of the key changes below, but I advise Condo and Co-op Boards/Management to review the policy changes in detail to ensure properties in your communities remain warrantable (banks will lend using traditional mortgage products), otherwise you’ll risk a significant drop in property values by limiting your buyer pool to cash buyers or those who qualify for alternative lending products (non-Fannie).

Significant Deferred Maintenance and Unsafe Conditions

This is the strictest of the new requirements, but also leaves a lot of grey area and subjective decision-making by each bank’s underwriter(s). The Fannie Mae language states:

“Loans secured by units in condo and co-op projects with significant deferred maintenance or in projects that have received a directive from a regulatory authority or inspection agency to make repairs due to unsafe conditions are not eligible for purchase. These projects will remain ineligible until the required repairs have been made and documented. Acceptable documentation may include a satisfactory engineering or inspection report, certificate of occupancy, or other substantially similar documentation that shows the repairs have been completed in a manner that resolves the building’s safety, soundness, structural integrity, or habitability concerns.

Significant deferred maintenance includes deficiencies that meet one or more of the following criteria:

  • full or partial evacuation of the building to complete repairs is required for more than seven days or an unknown period of time
  • the project has deficiencies, defects, substantial damage, or deferred maintenance that
    • is severe enough to affect the safety, soundness, structural integrity, or habitability of the improvements;
    • the improvements need substantial repairs and rehabilitation, including many major components; or
    • impedes the safe and sound functioning of one or more of the building’s major structural or mechanical elements, including but not limited to the foundation, roof, load bearing structures, electrical system, HVAC, or plumbing.

…These policies do not apply to routine maintenance or repairs that a homeowners’ association (HOA) undertakes to maintain or preserve the integrity and condition of its property. Also, if damage or deferred maintenance is isolated to one or a few units does not affect the overall safety, soundness, structural integrity, or habitability of the improvements then these project eligibility requirements do not apply. Examples of this scenario include water damage to a unit due to a leaky pipe that is isolated or damage from a small fire impacting the interior of a specific unit…”

It’s possible a Fannie Mae loan can be approved on one unit and denied on another. The grey area comes from 1) how the Association responds to the questionnaire sent by the lender and 2) how each lender’s underwriter(s) determine what qualifies as significant/substantial deficiencies. It’s possible that the interpretation of a question, and thus the way that question is answer, can change based on who from the Management company is responding. The same difference an interpretation of a response and support information can occur between underwriters at different banks.

Special Assessments

Associations should be much more careful when choosing to issue a special assessment (as opposed to borrowing or increasing condo dues) because of the extra scrutiny that now applies for loans and possibility that issuing a special assessment may cause properties in the building to be unwarrantable. The Fannie Mae language states:

“Any current or planned special assessment, even if paid in full for the subject unit, must be reviewed to determine acceptability… The lender is expected to obtain the financial documents necessary to confirm the association has the ability to fund any repairs. If the special assessment is related to safety, soundness, structural integrity, or habitability, all related repairs must be fully completed or the project is not eligible. Additionally, If the lender or appraiser is unable to determine that there is no adverse impact, the project is ineligible.”

Reserve Requirements

Associations are now at risk for loans not being approved if they are not allocating 10% or more of their annual budget towards Reserves. In my opinion, this is the most unreasonable of the new Fannie requirements because it doesn’t take other relevant details into account like whether or not the account is overfunded or the recommendations of the Reserve Study. To issue a blanket requirement for every Association to contribute 10% of their annual budget to Reserves is bad policy.

However, there is some flexibility in this requirement. Borrowers putting 10% or more down can get an exception that will allow them to proceed with the loan. Borrowers with less than a 10% down payment have to go through an expensive and time-consuming exception process.

The full guidance letter from Fannie Mae can be downloaded here.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.
Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate | @properties, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.

Q1 Single-Family Housing Market Review

Question: How did the single-family housing market perform in the first quarter of 2022?

Answer: At the end of last year, I expected a strong single-family market, but didn’t think the market had this much appreciation left in it. Sure enough, by the 2nd week of January, we were regularly seeing escalations of 10% or more over asking prices (that were set on last year’s prices) and despite headwinds from higher interest rates, the Ukrainian war, and inflation, the single-family housing market maintained the early momentum through the first quarter.

Intense Competition in Every Market Segment

I pulled data for sold single-family homes that were listed for sale after Jan 1 2022, excluding new construction, in Arlington, Fairfax Co, and Alexandria, Falls Church, and Fairfax Cities (Fairfax Co+) and the data is pretty incredible.

  • The average, yes AVERAGE, home in Arlington and Fairfax Co+ sold for 6.3% over the asking price
  • Over 27% of homes sold for 10% or more above the asking price
  • Homes listed for $750k-$1.499M sold for an average of at least 7% over the asking price
  • In Arlington, 85% of homes went under contract within one week on market and 95% were under contract within two weeks
  • It takes getting to an asking price of $2M+ before the average home sells below asking
  • The days of getting sellers to (help) pay for buyer closing costs are long gone, with only 4% of Arlington sales and 6% of Fairfax Co+ including any seller credit
  • The average Arlington home sold for over $1.24M and the average Fairfax Co+ home sold for over $1M

Months of Supply Explains Why

The easiest way to explain why we’re seeing such fierce competition and price appreciation is the Months of Supply (MoS) chart. MoS is a measure of supply and demand, showing how long the current inventory would last, based on the existing pace of sales. Fairfax Co and Arlington had just two and three weeks of supply, respectively, in the first quarter. Six months of supply is what economists say is needed for a well-balanced market.

Without a surge in listing volume, which seems highly unlikely given how difficult and expensive it is for people to find their next home, the only thing that can balance out supply is a significant drop in demand, which there are few signs of to-date.

Significant Year-Over-Year Appreciation

The year-over-year appreciation for homes that closed in the first quarter in Arlington was 7.8% and 13.2% in Fairfax Co.

The gap between the value of homes in Fairfax Co and Arlington is also closing as buyers seek more value. In Q1 2019, Arlington homes sold for 27.3% more than Fairfax Co homes and just three years later, Arlington homes are selling for just 17% more.

New Listing Volume Decreasing

Competition is not being driven just by high demand, but by low listing volume. The number of homes listed for sale in Q1 2022 was well below what we’ve seen in each of the last five years, which was preceded by a slow Q4 2021.

Looking Ahead

Expect demand and competition to continue through the second quarter, despite headwinds, because there’s such a wide gap between supply and demand. Higher rates may push some buyers into lower price points, but they’re likely to be replaced by buyers dropping down from the price point above that. The second quarter tends to be the most competitive and bring about the most appreciation. It will be interesting to see if prices continue to rise from Q1 levels or if they stabilize at these levels through the rest of the year.

The second quarter also brings about the most new listings each year and we can expect that trend to continue, although it will likely remain below the five year average for second quarter inventory, which means we shouldn’t expect to see any “progress” in the supply-demand gap.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.
Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate | @properties, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.

Q1 Condo Market Review

Question: How is the condo market performing so far in 2022?

Answer: The condo market has looked very different than the single-family/townhouse market since COVID struck. While the latter has exploded, the former struggled initially, but has stabilized and strengthened over the past 12 months. With the first quarter of 2022 behind us, let’s look at the data driving the Arlington and Washington DC condo markets.

Prices Mostly Flat in Arlington and DC

I generally find that median, instead of average, price changes are more reflective of what most buyers/sellers experience in the market. The median condo price in Arlington is up 8.1% year over year in Q1 2022 and 2.6% in DC. However, you can clearly see that the overall price trend over the last two years is mostly flat in both markets and up slightly from pre-pandemic prices.

Interestingly, the average and median $/SqFt in DC has decreased slightly over the last 12 months, but increased slightly in Arlington over the same period. My best guess is that it’s a reflection of less demand for smaller downtown condos (smaller homes tends to have higher $/SqFt).

Both Arlington and DC had noticeable increases in average sold prices year over year in Q1 2022, jumping 10.3% and 8.2%, respectively, with similar increases in Q4 2021. My best guess on this trend is that it’s a reflection of some buyers giving up on the single-family/townhouse market and turning to larger, more expensive condos as an alternative.

Months of Supply Finding its Level

Months of Supply, a metric that measures supply and demand (lower numbers reflect a more competitive market, favoring sellers), seems to be leveling off with relatively similar Q4 2021 and Q1 2022 readings in Arlington (~1.25 months) and DC (~2 months) after sharp increases during the first 18 months of the pandemic.

From a housing economics perspective, these readings suggest a strong sellers’ market in which one can expect competition and price appreciation. It will be interesting to see if this plays out in Q2 as more supply comes to market (Q2 brings the most inventory to market) while interest rates rapidly increase.

Sales Noticeably Slower in Arlington and DC

Despite signs of a strong, more competitive market, the overall pace of the market remains relatively slow with average days on market for Arlington and DC hovering just under 40.

Active and New Listing Volume Still High

The number of condos being listed for sale in Q1 2022 was less than a year ago, but still high relative to previous Q1 listing volume in Arlington and DC. This fact makes it impressive that Months of Supply (measures supply and demand) has dropped to strong seller market levels because it shows that, despite an unusually high number of people moving out of condos, there’s significant demand to absorb the new inventory.

Looking forward, I expect that higher interest rates will have a much more immediate and significant impact on condo demand than on single-family and townhouse demand and I think that Q2 condo data will reflect that.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate | @properties, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.

Are Home Warranties Worth it?

Question: Do you think it’s worth it to buy a home warranty and, if so, is there a provider you recommend?

Answer: Last week I talked about mitigating the risk of not doing a home inspection and failed to mention that purchasing a home warranty can also help reduce the risk of buying a home, regardless of whether or not you do an inspection.

What Is a Home Warranty?

Home warranties protect many of the systems in your home including things like the HVAC (heating and cooling), appliances, and water heater. If one of those systems stops working while you’re covered, the warranty provider will repair or replace the system, or cut you a check to replace it yourself. One year of protection generally ranges from a few hundred dollars to one thousand dollars, depending on the scope of coverage.

Most home warranties are purchased by or for a homebuyer just before closing, but sellers can also purchase a warranty and benefit from protection during the sale period, or if something comes up on the home inspection, then transfer the protection on to the buyer. Homeowners can also buy a warranty at any time after buying a home, it doesn’t have to be associated with a sale. The provider usually requires a month or so between the time of purchase and coverage taking effect to prevent people from buying a warranty just when something goes wrong (pre-existing condition).

Are They Worth the Cost?

I generally find home warranties to be worth the cost for at least the first year of ownership. If the home you’re buying has old systems, consider buying multi-year coverage. Think of the expense like you would home or auto insurance. If you’re somebody who prefers to pay higher premiums for more coverage/peace of mind, a home warranty probably makes sense for you.

A common scenario I see where home warranties pay-off is with HVACs when a new owner transitions from heating to air conditioning in the spring. During the winter, it’s often to cold outside to test the air conditioning during the home inspection so AC issues may present themselves after closing. With a home warranty, those issues should be covered.

Recommendation: Super Home Warranty

Warranty companies tend have bad reputations with complaints ranging from difficulty filing claims, low quality contractors, and lengthy delays. There were a few years that I stopped recommending warranties to most clients because of all the issues people were experiencing.

For the last ~5 years I have been recommending Super Home Warranty and have their coverage on my personal home. They’re responsive, have a good user platform/app, use high quality contractors for repairs, and I’ve yet to run into an unreasonable claim denial.

They also have some valuable inclusions that other warranty companies don’t offer like a contractor concierge that gives you access to their vetted contractors and a bunch of add-on services for a small fee like re-keying locks, carpet cleaning, and HVAC cleaning.

It’s worth noting that I don’t get anything from Super for recommending them, just in case this seems like a sales pitch ☺

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.

So, you’re not doing a home inspection?

Question: Do you have any advice to help reduce the risk of not doing a home inspection before buying a house?

Answer: The unfortunate reality of the current market (and the market of the last ~18 months) is that, in most cases, to make a competitive offer on a home, buyers are absorbing all the risks (financing, appraisal, inspection, etc). Understanding the risk/benefit trade-offs and the downside potential of these risks is critical in such a fast-paced, expensive real estate market.

Risk Management is Critical

If I had to guess, I would say that at least 75-80% of winning offers on local homes that go under contract within the first 1-2 weeks do not have a home inspection contingency, meaning they are either not doing a home inspection at all (unfortunately common) or doing a pre-offer home inspection. As with nearly every decision you make in real estate, this needs to be done with great consideration for the cost of the risk and the value of the upside to make sure it is the right decision for you on a specific property.

Part of that risk assessment is making a determination on the condition of the home – whether it has “good bones.” Having a home inspection done is the best way to reduce the risk of buying a home with condition/maintenance issues but is no guarantee that everything will be caught. If you can’t do a home inspection, seeing a home with a trusted, experienced real estate agent or somebody in the home building/improvement industry (contractor, builder, etc) is also a good way to reduce your risk.

Property condition/maintenance issues show up in a multitude of ways. Below I’ve summarized some tips on assessing a home’s condition from inspectors I work with, an article written by Stephanie Dickens of BOWA, a local design-build firm, and my personal experience.

Observe How Water Moves

Water is a home’s worst enemy and poor water management can lead to water pooling against a home and getting into the cracks of the foundation, which can lead to structural deterioration over time. A musty-smelling basement is a sign of poor water management. Look at where gutters drain – I often find that they’re dropping water right next to the house instead of sending it away. Look at the grading (slope of the yard) and if water is running towards the house, look for drainage systems. Sump pumps are nice, but they should be connected to a battery backup in case power goes out.

Good vs Bad Cracks

Cracks can be deceiving. Something as small as a crack in the drywall could be a sign of larger structural issues but are most likely cosmetic. Straight, hairline cracks above openings or at joints, like the one pictured below to the left, are nothing to be alarmed about.  If you see jagged, diagonal cracks that are wider than 1/8”, like the one below to the right, the house may have settlement issues or insufficient framing. A pattern of uneven floors and cracking around support (e.g. lintels) in one section of a home can be a sign of a bigger issue.

Level Floors Are a Good Sign

A nice, level floor indicates good structural support. If you look up to where the ceiling and the wall meet, the corner crease should be mostly straight. If the floor looks wavy or dips down in the middle, the floor joists may be sagging and need reinforcement. Uneven floors do not necessarily indicate a problem, rather is a justification for a harder look to see if there are other signs of active issues. We have plenty of well-built old homes with uneven floors around here that have been that way, without issues, for decades.

Jump Around

Stand on your tiptoes then drop down hard on your heels. Do this at various points in the house to test the deflection in different areas. All wood-framed floors are going to have some deflection, but you don’t want it to feel like you’re jumping on a trampoline. Too much bounce is an indicator of insufficient structural support.

Young At Heart

A house with newer core systems is not just a sign of good maintenance, but it’s a huge money-saver in renovations. Check on the age of the windows, roof, HVAC, water heater, plumbing, electrical, and main sewer/water lines. Any of these systems that are in the first half of their expected useful lifespan add tremendous value.

Permits Help, but Not the Whole Story

If a home has been updated or expanded, look for permits on the County permit status website, but remember that permits and quality work are not necessarily directly correlated. I’ve seen far too many permitted projects with quality issues and plenty of unpermitted projects done at a high level. Permits are a good sign, but not the entire story.

Look for Signs of Cover-up

Don’t be afraid to ask questions if you see recently painted foundation walls, patched ceilings, or brand-new flooring in the basement. They may be perfectly innocent attempts at improving the aesthetics of an ugly basement wall or old carpet, but they are also signs of covering up moisture or cracking issues. Sellers in Virginia do not have to disclose defects, but they cannot actively hide, mislead, or lie about them.

Quality Care and Repair

One of the most important judgments I try to make when looking at a home is how attentive a homeowner was to issues as they came up and how likely it was that they addressed them with quality service and solutions instead of cheap patches. There’s no specific formula for this, but there are usually signs throughout a home that suggest solid long-term maintenance vs one-time, cost-conscious listing prep. I look for the quality of materials and craftsmanship in work that was done while the owner was living in the home. For example, the choice in appliances, windows, shingles, and plumbing fixtures. Signs of attentiveness and quality in the things you can see are often suggestive of the same care in the things you can’t see.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.

Has Your Condo/POA Banned Smoking?

Question: Do you know if Associations in Virginia have begun banning smoking using the new law?

Answer: Last year, I wrote an article about Virginia’s new law that allows Condo and Property Owners Associations to easily ban smoking inside units/homes via a new resolution to the rules and regulation, which generally requires a simple majority vote by the Board. Prior to this, Boards could ban smoking in common areas this way, but smoking bans within units/homes required a lengthy (multiple years), costly, and resource intensive effort to get a 2/3+ vote from owners to change the by-laws.

I have heard from a couple of Condo Associations that have implemented this new law to ban smoking and I would love to hear from other readers, in the comments section or in email, who have either passed a new smoking ban resolution, are in the process of doing so, or have run into challenges trying.

Last year I spoke with attorney Michael C. Gartner (703.280.9267 or mgartner@wtplaw.com), a Partner at Whiteford, Taylor, & Preston LLP and current President of the Community Associations Institute (CAI) Washington Metro Chapter, about the new law to make sure I was clear on the implications this has for Virginia condos and POA communities.

Mr. Gartner confirmed that the new law, effective July 1 2021, does in fact allow condo and POA Boards to ban smoking inside private residences with a simple majority vote of the Board. He also offered some helpful advice and caveats for any Boards/communities who plan to move forward with in-unit smoking bans:

  • In rare cases, some by-laws may specifically restrict a Board’s ability to make certain rule changes or require something other than a simple majority, so Boards should have an attorney review their by-laws prior to proceeding with a smoking ban
  • Smoking bans should be written as a compliant resolution through legal counsel, not as a simple motion
  • Enforcement is always a challenge for Boards (noise, trash, and other common rules always present enforcement challenges) and Boards may want to work with their legal counsel to establish compliant enforcement protocol
  • The new law includes a provision that allows owners to call a special meeting to vote and repeal a change in the smoking policy
  • Smoking ban policies might flip back-and-forth as new Boards are elected and the majority votes for a new/different smoking policy than the previous Board

Last week, I followed up with Mr. Gartner on the new law and he said that he has several clients (condo buildings) considering implementing a smoking ban and so far is not aware of any legal challenges or considerations that would change the opinions he shared last year when the bill was approved.

Please use the comments section or email me if you are in an Association who has taken advantage of this new law or is planning to!

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.

Real Estate Within Walking Distance of Metro

Question: I’m beginning my home search and want to be within walking distance of Metro. What do my options looks like?

Answer: It’ll be interesting to see if buyers value Metro proximity differently long-term because of lifestyle and professional changes brought about by COVID. I’ve certainly noticed a reduction in the number of buyers I meet with who include being walking distance to Metro as a core requirement, but it seems that we’re quickly returning to previous buying habits so I think preferences for Metro will mostly return to pre-COVID patterns.

If you’re searching for a home in Arlington within walking distance to a Metro, it’s helpful to go into your search understanding what type of inventory you’ll find. Unsurprisingly, condo buildings dominate the market within walking distance of Metro stations, making up over 69% of total sales over the last two years.

The following table summarizes sales over the last two years within 2/3 of a mile of each Arlington Metro station. I left out the Arlington Cemetery and Pentagon Metro stops.

  • The Metro with the highest average sale price is East Falls Church, but that is because it’s the only Metro station where the majority of sales within walking distance are detached homes
  • Pentagon City and Crystal City, the Metro stations that make up National landing, are the most difficult locations to find homes to purchase because so much of the surrounding housing is rental apartments
  • Virginia Square has had the most homes for sale within walking distance
  • Clarendon and Virginia Square are surrounded by the most expensive detached. Rosslyn and Clarendon boast the most expensive townhouse/duplex homes.
  • Rosslyn’s luxury condo buildings make it the most expensive condo market by average sold price, price per bedroom, and price per square foot
  • On average it costs $552 per SqFt and over $368,000 per bedroom to live within walking distance of a Metro in Arlington
Timeline

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If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to Eli@EliResidential.com. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.

Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.