2020 Housing Market Review: Condos

Question: How did Arlington’s condo market perform in 2020?

Answer: I ended up writing a lot about the condo market during the second half of 2020 because of the historically high numbers of units listed for sale from July to November, falling demand, and falling market values (compared to the first half of the year). However, there were slightly positive signs in the last month of 2020 and early weeks of 2021 that the negative trends are reversing. Despite a 2nd half that looked very different from the previous three years, 2020 overall was still a strong market for condos in Arlington. Let’s take a look at how things played out…

Prices Up, Volume Down, Pace Mostly Unchanged…

The average and median price of condos increased by 4.2% and 6.3%, respectively, a strong performance but a bit short of the nearly 8% growth in 2019. I wouldn’t be surprised to see no appreciation or slightly negative appreciation in 2021 as a result of changing housing priorities from COVID.

Despite the late surge of condos listed for sale, the number of condos actually sold in 2020 dropped 8.3% from 2019 and 19.3% compared to 2018.

The speed of the market remained relatively unchanged, with average days on market staying put at 7 days and median days on market decreasing slightly from 19 days to 18.4 days. However, my preferred “speed” metric, the percentage of units selling within one week, dropped to 48% in 2020 from 52% in 2019, but still well above 2018’s 29%.

Six Interesting Charts

Below, I put together a series of charts to visualize how the Arlington condo market performed in 2020 and how that performance compares to the 2015-2019 markets.

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

2020 Housing Market Review: Single-Family Homes

Question: How did Arlington’s single-family housing market perform in 2020?

Answer: Despite the pandemic, the single-family housing market produced strong growth locally and nationally, primarily due to interest rates setting record lows throughout the year and a sharp change in housing criteria due to ongoing work/school-from-home demands. While Arlington experienced strong growth, less expensive markets further from DC saw sharp increases in demand and explosive growth.

More Expensive…

In Arlington, the average and median price for a single-family home increased by 4.9% and 5.7%, respectively, after similar increases in 2019. The growth showed up in all ends of the market, including Arlington’s most expensive homes, with another record-shattering year for the number of $2M-$3M homes sold. Only 17% of single-family homes sold for less than $800,000 and about half of those were tear-downs or required major renovations.

Volume Still Down…

Despite a very slow rollout of homes for sale in the first half of the year due to lockdown measures and pandemic fears, market volume caught up quickly in the second half of the year, ending up with 13 more homes sold in 2020 than in 2019, but still ~10% lower than 2015-2018.

Faster Pace Sales…

Average and median Days on Market dropped for the 5th year in a row to 7 and 22.2 days, respectively, and the percentage of homes selling in the first week increased for the 5th year in a row, hitting the 50% mark in 2020. The average and median price for a home purchase within the first week on the market was 1.1% and 2% over the asking price, respectively. The takeaway? If you’re searching for a home, be prepared to act quickly and pay above the asking price for something new-to-market.

Six Interesting Charts

Below, I put together a series of charts to visualize how the Arlington housing market performed in 2020 and how that performance compares to the 2015-2019 markets.

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

Analyzing the Pace of Housing Inventory and Demand

Question: When should I expect more homes to be put on the market for sale?

Answer: 2020 was an unusual year for housing inventory because we saw so little inventory come out during the spring, when the pace of new listings peaks, and an explosion of listings, especially condos, from late summer through the holidays. Here’s a link to a column I wrote that visualizes how unusual 2020 was for housing inventory in Arlington. Even though my analysis in this column and previous columns focuses on Arlington, similar patterns show up and can be applied across the DC Metro.

It is much more likely that the pace of new listings will follow a more traditional pattern this year, with the number of homes listed for sale increasing steadily from now to the spring, peaking for about mid-March to mid-May, and then dropping steadily through the rest of the year, with a brief post-Labor Day spike.

Weekly Pace of Listings, by Housing Type

I’ve always shared and seen monthly breakdowns of listing inventory, so I thought it would be interesting to break it down a bit further into a weekly chart and see if there’s a noticeable difference in the seasonal pace of new listings of single-family homes/townhouses and condos.

The following chart does just that and pulls data from the five years spanning 2015-2019 (I threw out 2020 because it’s an anomaly). The weekly percentages represent that week’s share of total annual listings. Note that the data for the first and last weeks of the year aren’t always full weeks because of how Excel calculates weeks.

As it turns out, the pace of listing inventory for single-family homes/townhouses and condos is nearly identical throughout the year, aside from a slightly higher pace for SFH/TH in the middle of the spring and a slightly lower pace for SFH/TH during the dog days of summer.

What can buyers looking for a home in 2021 take away from this chart? You can expect a significant increase in listings beginning around mid-February, buckle-up for the most options in April and May, plan your vacations in July and August, look-out for the post-Labor Day surge, and hopefully you’ve found your dream home by the holidays!

Weekly Pace of Listings, by Year

The pace of new listings remains pretty consistent year-after-year, as shown by the chart below. There were only a handful of weeks with unusually low listing activity, compared to previous years. I’m guessing there was major weather activity during those weeks that caused some homeowners to delay or accelerate their listings by a week or two to avoid the drag of bad weather.

The consistency you see in the five-year chart below is also reflected in longer (ten and fifteen year) charts, but those get a little too messy for display.

Weekly Pace of Listings and Contracts

The pace of listing inventory and contract activity is highly correlated. The “chicken or the egg” question is whether more/less listing activity drives more/less contract activity (demand) or does demand dictate listing activity or do buyers and sellers just have similar patterns of behavior and thus the pace of supply and demand naturally correlate?

I think that it’s mostly due to number three, a natural correlation of behavior patterns that cause the pace of supply and demand to move in tandem. This is also supported by data like the new-listing-to-new-pending ratios not being very seasonal.

Using the chart below, one could even make the argument that the best time to list a property for sale is the last 2-3 months of the year, when the pace of contract activity (demand) consistently exceeds new listings (competition). However, I’ve analyzed “success metrics” like days on market and sale-to-ask-price ratio based on the month a property is listed and overwhelmingly found that February-May/June produce the most favorable results for sellers.

I hope these charts were interesting and helpful to you! If you’d like to discuss buying or selling strategies, don’t hesitate to reach out to me at Eli@EliResidential.com.

2021 Interest Rate Projections

Question: Do you expect mortgage rates to increase in 2021?

Answer: Happy new year everybody! Historically low mortgage rates in 2020 were one of a few factors that drove real estate prices up across the country (except in the condo market). This time last year, the Mortgage Bankers Association and Freddie Mac each predicted that rates would remain near 2019 levels through 2021, with an average 30yr Fixed Rate hovering around 3.7-3.8% through that period.

As it turns out, rates averaged about a full percent less than those projections. Rates fell consistently throughout the year, except for a brief but sharp increase in mid-March when markets went crazy with the first news of COVID-related shutdowns, until the Fed stepped in with liquidity. Below are some charts from Freddie Mac showing average mortgage rates over the last 50, 10, and 1 year.

Average Mortgage Rates Since 1971

Average Mortgage Rates Since 2010

Average Mortgage Rates in 2020

Rates in 2021+

The Mortgage Bankers Association and Freddie Mac each predict that 30yr Fixed Rates will increase slightly in 2021 and hover around 3%-3.2% in 2021. Beyond 2021, the Mortgage Bankers Association sees rates averaging 3.6% in 2022 and 4.1% in 2023.

An increase to 4% or higher mortgage rates will likely cause the rapid appreciation we’ve seen over the last couple of years to slow down, but I don’t think it will lead to a pull-back in prices unless it is combined with a migration from the DC Metro due to major changes in telework policy.

If you’re considering purchasing in 2021, I wrote a column in 2019 about my favorite mortgage programs that you might find helpful. If there’s anything I can do to help you prepare for a purchase, don’t hesitate to email me at Eli@EliResidential.com.

Most Expensive Homes Sold in the DMV in 2020

Answer: Happy holidays to you and yours! I hope you are finding new ways to enjoy the season and connect with family and friends this year. I’m going to keep my final post of 2020 light and take a look at the most expensive sales in the DMV in 2020, something we all enjoy doing!

Despite its Missing Ultra High-End Market [sarcasm], Arlington boasts the most expensive sale in the DMV in 2020, by a LOT, with the sale of a massive estate along the Potomac River for $45,000,000. This price tag earns the new owner over 31,000sqft of living space, 3.2 acres, a 30-car garage, and gorgeous views of the Potomac River.

Listing and photo by Russell Firestone, TTR Sotheby’s International Realty (409 Chain Bridge Rd, Arlington)

Top 5 Most Expensive Sales in Arlington

Arlington’s five most expensive sales in 2020 include the region-leading $45M sale mentioned above and four sales ranging from $2.88M-$3.35M, including two condos in Rosslyn’s iconic Turnberry Tower.

Listing and photo by Nancy Taylor Bubes, Washington Fine Properties (1881 N Nash St #2301, Arlington)

Top 5 Most Expensive Sales in Alexandria

Alexandria’s five most expensive sales in 2020 include four homes in Alexandria’s new waterfront condo and townhouse community, Robinson Landing, and one incredibly unique single-family home on ¼ acre in the heart of Old Town (pictured below).

Listing and photo by MaryEllen Rotondo, McEnearney Associates (217 S Fairfax St, Alexandria)

Top 5 Most Expensive Homes in Fairfax County

Fairfax County’s five most expensive sales in 2020 include three homes in Great Falls and two homes in Mclean ranging from $5.6M-$24M. Pictured below is what $7M gets you in Great Falls – over 20,000sqft, 5 acres, and stunning landscape and architectural design.

Listing and photo by Piper Yerks, Washington Fine Properties (576 Innsbruck Ave, Great Falls)

Top 5 Most Expensive Homes in Loudoun County

Loudoun County’s five most expensive sales in 2020 include sales ranging from $3.75M-$16M. At a price tag of $16M, you could have secured a 1,550+ acre cattle farm in Upperville, surrounded by vineyards and a short drive to Middleburg.

Listing and photo by Kathryn Harrell, Washington Fine Properties (33542 Newstead Ln, Upperville)

Top 5 Most Expensive Homes in Washington DC

Washington DC’s five most expensive sales in 2020 range from $6.1M-$17.75M, with Georgetown commanding four of those sales. Want a 10,000sqft home with a detached 2-car garage and 6/10th of an acre in Georgetown? That’ll run you $17.75M in 2020.

Listing and photo by Michael Rankin, TTR Sotheby’s International Realty (1405 34th St NW, Washington DC)

Top 5 Most Expensive Homes in Montgomery County

Montgomery County’s five most expensive sales in 2020 range from $5.475M-$15M, including my personal favorite, a $10M mansion on Chevy Chase Circle sitting on nearly two acres (pictured below).

Listing and photo by Daniel Heider, TTR Sotheby’s International Realty (9 Chevy Chase Cir, Chevy Chase)

Top 5 Most Expensive Homes in the DMV, Outside the Greater DC Metro

The DMV’s five most expensive sales in 2020, outside of the greater DC Metro area, range from $6.2M-$10M, including four homes fronting the Chesapeake Bay. My personal favorite, pictures below, is a 36 acre waterfront estate just outside of St. Michaels, and includes a WWII replica fighter plane hung from the ceiling of the great room.

Listing and photo by Doc Keane, Washington Fine Properties (26310 Saint Michaels Rd, Easton)

I hope that was a fun tour through 2020’s most expensive homes in the DMV! Happy New Year everybody!

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

Positive Signs in the Condo Market, Finally

Question: Can you provide an update on how the condo market is doing?

Answer: Arlington’s condo market began shifting in favor of buyers this summer, after two years of a very strong seller’s market, when historical numbers of condos began hitting the market at the same time demand subsided. I’ve written about these changes four times since (falling values, visualizing high inventory, first signs of a trend, and first signs of a shift).

November Might be a Turning Point

For the first time since June, we’ve seen a reduction in the Months of Supply (MoS) of Arlington condos. Months of Supply is a great measure of supply and demand (lower MoS = stronger market with higher demand and less inventory).

While the reduction in MoS is slight, it’s a positive sign nonetheless that the market is either closer to finding its level again or may soon show signs of strengthening. However, one month, particularly a winter month, is not enough to establish any real change, we will need to see what the next 3-6 months bear.

Figure 1

Multiple Key Indicators Show Positive Signs

My hope for a settling or strengthening of the condo market is not solely based on one metric, there are other key metrics that suggest November may be the first month of a settling or strengthening condo market.

Absorption Rate (Figure 2), a measure of demand, increased ever-so-slightly in November, the first increase since May, albeit still down nearly 68% from the December 2019 Absorption Rate.

The number of condos for sale during November decreased for the first time since May (Figure 3), albeit slightly. The better news, however, is that the decrease in total condo inventory doesn’t seem to be caused by frustrated sellers pulling their condos off the market, rather due to promising contract activity (Figure 4), which was up 41% year-over-year in November.

Figure 2
Figure 3
Figure 4

Looking Ahead, Eyes on March-May

Over the next few months, I’ll be looking closely at whether these trends (stronger demand, falling inventory) continue, find a level, or revert back to what we’ve seen since this summer. I’ll be particularly interested in what year-over-non-COVID-year numbers looks like and if we settle into normal spring activity for inventory and demand.

For example, while the charts above are positive indicators for the condo market, Figure 5 shows just how much inventory (new listings) is still coming onto the market, with November generating nearly 79% more condo listings in 2020 than in 2019, but only a 41% increase in contract activity.

Figure 5

I think that March-May 2021 are going to be very interesting months, statistically speaking, and will be excellent indicators of what the market might look like for the next few years, until the next major market event (e.g. Great Recession, Amazon HQ2, COVID). I think/hope that by then, we will also have a better understanding of how the Federal Government and private companies will address teleworking beyond COVID and thus whether commute time will be prioritized differently by buyers.

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

Deep Dive into Arlington’s Townhouse Market

Question: I need more living space and single-family homes are out of my budget, so I’ve been searching for townhouses in Arlington, but finding that the options are limited. Can you provide some guidance on what the townhouse market in Arlington looks like?

Answer: I spend a lot of time digging into the condo and single-family home markets, but not much time on the townhouse/duplex market. Why? Because townhouses and duplexes make up such a small part of our housing inventory. According to this Missing Middle Study, townhouses and duplexes make up just 5.9% of Arlington’s housing inventory (3.7% are townhouses).

Fortunately (for some), we’ve recently had an unusual surge in new townhouse developments hit the market including:

  • Arlington Heights: 27 townhouses developed by NV Homes, walking distance to the East Falls Church Metro, ranging in price from about $1.1M-$1.4M
  • Trenton Square: 19 townhouses developed by Madison Homes, near the intersection of Rt 50 (north side) and Glebe and a short distance to Ballston, starting at around $1M
  • Morrison Hill: 17 townhouses developed by Beazer Homes, near the intersection of Columbia Pike and George Mason (across from the new Harris Teeter), ranging in price from about $800k-$900k+
  • Towns of 24th: 8 townhouses developed by Evergreene Homes, in the Nauck neighborhood near the intersection of 395 and Glebe, starting in the mid-$800s
  • Park Nelson: 3 townhouses developed by District Line Development, in the Nauck neighborhood, ranging from $900k to $935k.
  • Townes at South Glebe: 16 townhouses across two sites developed by Christopher Companies, off of S Glebe between Columbia Pike and Shirlington, with prices starting in the upper $800s

Explanation of Data

For the data below, I looked at sales of townhouse and duplex properties over the last five years (except the last chart). I decided to separate these properties into ownership type: Condominium and Fee Simple.

Condominium ownership is generally used in multi-family buildings (apartment-style), but was popular in many of South Arlington’s townhouse communities in the mid 1900s. In condominium ownership, the HOA is generally responsible for what’s outside the walls of the home (roof, fencing, some plumbing, etc) and HOA fees are therefore (significantly) higher.

Fee Simple ownership means that you own the entire structure and the land your home sits on. The HOA fees are usually much lower because there’s less common ownership.

Over the last five years, we’ve had a nearly 50/50 split between condo and fee simple townhouse/duplex sales.

5-Year Townhouse Market Performance

Unsurprisingly, the townhouse/duplex market has followed the same general trends as the rest of the housing market, with a strong 2018, followed by a white hot 2019 and 2020, where the average townhouse/duplex sold for more than the asking price and 60% or more of homes listed sold within the first week.

Here are a few highlights from the data below:

  • There are a few ways of looking at appreciation here, but overall, the data suggests the townhouse/duplex market has appreciated ~20% in the last five years, with most of that coming in the last two years
  • The apparent drop in market value, by average sold price, of Fee Simple in 2019 is a misrepresentation of the market and due to the difference in the distribution of sales (more inexpensive/fewer expensive listings), the $/sqft tells a more accurate story for 2018-2019 Fee Simple pricing
  • The ~10% appreciation of the Condominium townhouse/duplex market (smaller, older, and less expensive than the Fee Simple market) in 2020 is likely due to buyer demand shifting away from similarly priced apartment-style condos in buildings towards private entry townhouse/duplex living with easier access to outdoor space (COVID related)
  • While quite different in size, price, age, and HOA fees, the Condominium and Fee Simple styles of townhouse/duplex ownership generally move in close parallel
Year Sold / Ownership TypeAvg Sold PriceAvg $/sqftAvg Sold to Org Ask $% Sold <7 days# Sold
2016$587,687$34999.0%39%441
Condominium$473,288$33398.8%38%260
Fee Simple$752,016$38199.4%42%181
2017$617,917$34599.1%40%558
Condominium$486,161$33399.4%43%313
Fee Simple$786,243$36798.8%36%245
2018$632,371$36799.2%45%533
Condominium$501,229$35899.3%47%292
Fee Simple$791,265$38199.2%44%241
2019$642,569$413101.0%60%481
Condominium$502,037$385101.4%63%220
Fee Simple$761,025$436100.7%57%261
2020$703,644$435100.4%62%561
Condominium$552,263$416100.8%61%267
Fee Simple$841,123$453100.1%63%294

What to Expect from Townhouse/Duplex Inventory

Below is a chart showing what your average Condominium and Fee Simple townhouse/duplex has offered buyers over the last five years of sales. While Fee Simple homes are roughly 43% larger, with an extra bedroom/bathroom, and about 25 years newer (likely to have a more open floor plan, larger bathrooms, and larger closets) the average Fee Simple home in 2020 was about $290,000 more expensive.

Ownership TypeAvg BedroomsAvg Full BathsAvg Half BathsAvg Total SqftAvg Year Built# Sold
Condominium2.21.90.51,41819591352
Fee Simple3.02.51.02,02519841222

Sales Since 2019, by Decade Built

I also thought it would be interesting to compare what inventory looks like based on the decade it was built. The following table details what you can expect to find in townhouse/duplex inventory by decade built, based on sales since 2019.

Below are a few highlights from the data:

  • There are three “generations” of townhouse/duplex inventory: 1930s-1950s, 1960s-1980s, and 1990s-current. In each “generation” the size of homes being built increased significantly.
  • The oldest, least expensive homes sell the fastest, with an incredible 71% of 1930s townhouses/duplexes selling within one week on market. On the flip side, the newest, most expensive inventory can take a little longer to sell, with less than 50% of these homes selling within one week. However, even at 40% and 47%, that is still a fast pace for any market.
  • Of the 1,012 townhouse/duplex homes sold since 2019, 279 (27.6%) had an attached garage. On average, a townhouse/duplex with a garage sold for just over $967,000 and 77% of these homes were built in the 1990s-2010s. 75% of homes with a garage had a two-car garage, representing only about 20% of total townhouse/duplex sales and requiring an average purchase price just over $1M.
Decade BuiltAvg Sold Price% Sold <7 daysAvg Total SqftAvg BRAvg Full BathAvg Half Bath# Sold
1930s$451,59371%1,0181.91.30.4129
1940s$535,77961%1,3612.21.90.1301
1950s$441,07154%1,1172.51.40.654
1960s$685,41760%1,8713.22.21.330
1970s$697,34163%1,9532.92.31.283
1980s$690,40867%1,6182.62.31.1198
1990s$966,94467%2,1283.12.61.399
2000s$1,057,05747%2,5603.22.61.260
2010s$979,36540%2,2183.53.21.188

For those of you exploring the purchase or sale of a townhouse/duplex in Arlington, I hope this information was helpful! If you’d like to discuss buying or selling strategies, don’t hesitate to reach out to me at Eli@EliResidential.com.

Condo Values Fall as Inventory Builds

Question: Have you seen a decrease in condo values with all of the inventory currently on the market?

Answer: Over the last few months, I’ve written about the shift in the condo market (links here and here and here), which began around July and can be attributed to a historical number of units listed for sale while demand simultaneously dropped due to COVID. Indicators such as Months of Supply, Absorption Rate, Days on Market, and Sold to Ask Price Ratios have shown a more favorable market for buyers for the last four months, but it takes longer to establish changes in pricing (need enough data).

It’s been my experience working in this market over the last few months that prices seem to be down about 2-5% in many sub-markets, compared to late 2019 and the first half of 2020 (after surging since 2018). However, I dug into the data a bit more to see how condos that went under contract after July 15 compare to the sales of condos that went under contract from Jan 1 – July 14 2020. I used July 15 because that is when I really start to see changes taking shape in the condo market.

One point I’d like to make prior to sharing the data findings is that the data is based on condos that have sold/closed and there are many condos still sitting on the market or under contract that won’t show up in this analysis. The market has also worsened (for sellers) each month since July, so properties that went under contract in July/August likely did better than those later on in the year. Therefore, it’s likely that as the units close that are currently struggling to sell, or just now coming to market, the data will get worse (larger decrease in values).

Data Summary

I chose to segment the market in a few different ways to get a sense of how different sub-markets are experiencing the condo shift. When comparing relatively small data sets (like we have here), the best conclusions can be drawn by analyzing market segments that have lot of similarities such as condos along the R-B Corridor built in the last 20 years or mid-1900s (older) buildings. Here are some highlights from the data sets I reviewed:

  • 1BR and 2BR condos along the R-B Corridor, built in the last 20 years, sold an average of 2.2% and 5.8% less, respectively, after mid-July. If you look at $/sqft, prices have dropped 1.1% and 3.6%, respectively. I believe this is the data set that most accurately reflects what’s happening in the condo market.
  • Older, less expensive condos across the County seem to have held onto their values better than newer, more expensive units. More expensive condos are closer in price to townhouses and I’ve seen more buyers favor lower-priced townhouses over higher-priced condos, as a result of COVID concerns. Buyers of less expensive condos don’t have many alternatives at that price point, other than renting.
  • The apparent appreciation of South Arlington since July 15 can be attributed to a different distribution of sales (higher volume of more expensive properties and lower follow of less expensive properties) than comparable units actually selling for more
  • The indicators (Sold to Ask, % Sold in <7 Days, and Days On) are what I find most interesting and a sign that the actual decrease in condo pricing isn’t fully reflected yet in the current data set:
    • Across every sub-market, including those where the average price didn’t drop, buyers negotiated significantly more off the original asking price. Earlier in the year, three sub-markets averaged buyers paying at least full price and since July 15 there were none.
    • The most interesting indicator is the huge drop in the percentage of units that go under contract within the first week.

Looking Forward

As I mentioned in the third paragraph, I expect future data sets for condos sold in the last quarter of 2020 and very early 2021 to show even larger decreases in values, relative to the first half of 2020. However, I think that with more positive news on COVID-19 vaccines, the start of the 2021 spring market, and more people returning to work (and realizing they value commuting convenience over extra space) I believe there’s a good chance the negative trends of the last 4-5 months will level off soon and begin to reverse by February/March.

I will continue to track trends in the Arlington condo market and provide transparency into what we’re experiencing. The townhouse and single-family home markets remain strong and I fully expect another appreciation cycle in 2021 for those sub-markets.

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

Visualizing Arlington’s Explosion in Homes Listed for Sale

Question: Did the volume of homes listed for sale recover after a slow spring/summer?

Answer: There has been a surge of new inventory coming to market since July. For condos, it has been historically high, by a wide margin, resulting in a 20% increase in 2020 over the 20-year average. While the single-family and townhouse listing volume has spiked since July too, overall, we’re just .5% above our 20-year average.

In July I wrote a column with charts showing how low Arlington’s listing volume was compared to the 20-year average and I made some predictions that the inventory we lost in the spring/early summer would return in the late summer/fall. This week we’ll take a look at how those predictions played out and dig further into listing volume over the last four months and overall in 2020.

Inventory Comes Back, And More

Historically, March-June bring about the highest listing volume, but this year, due to COVID-19, many homeowners held off on putting their home on the market. In July, I predicted that a lot of the “missing” inventory from March-June would be listed from July-October, which would result in a delayed spring market.

As it turned out, the number of condos listed from July-October FAR exceeded the amount of “missing” inventory from March-June, by nearly 3x! For single-family homes and townhouses, July-October listing volume also exceeded the amount of “missing” inventory from March-June, but by a much smaller margin.

In the chart below, missing and excess inventory is calculated off of the 20-year average for monthly listing volume.

Condo Volume at Historical Levels, By a LOT

Just how extreme have the last four months of listing volume been in the condo market? There were 801 condos listed for sale from July-October. Prior to that, the highest four-month listing volume was 650 units from April-July 2004.

Segmenting Listing Volume by Zip Code and Bedroom Count

Overall, the 2020 single-family home and townhouse listing volume is up just .5% over the 20-year average through October and the 2020 condo listing volume is up 20% over the 20-year average through October.

Below are charts breaking down how changes in listing volume have been distributed by zip code and bedroom count. My theory, prior to charting the data, was that there would be a bigger increase in listing volume for smaller properties (1BR over 2BR condos, 2-3BR over 4BR-6BR single-family/townhouses), but it turned out to be the opposite. Go figure!

Current Supply Levels

The market has been able to absorb the extra single-family and townhouse inventory, despite it coming during a time of year with historically lower demand. However, the market hasn’t come close to absorbing the condo inventory, which continues to build at a rapid rate.

See the below chart of changes to Months of Supply (measure of supply and demand, higher MoS favors buyers) over the last three years between single-family homes and condos.

The result is that the single-family and townhouse market remains competitive, with prices remaining stable through the fall and winter, while the condo market shifts to a more favorable market for buyers, creating substantial downward pressure on condo prices.

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

$2,000,000 Isn’t What It Used To Be

Question: Is it just me or have there been a lot more $2,000,000+ homes for sale this year than in the past?

Answer: The $2,000,000 mark used to represent a significant resistance point for homes in Arlington, reserved only for the best-of-the-best and difficult to sell, but we’ve seen a surge of $2,000,000+ homes for sale in Arlington this year and demand to absorb it.

One of the more interesting differences between Arlington’s real estate market and other expensive markets is that while a huge percentage of our homes sell for over $1M, we have very few homes that sell over $3M (link to previous article). For some context, there have been 82 single-family homes listed for sale for $2M-$3M in Arlington in 2020, but just 19 listed for sale/sold since 2010 for over $3M (four of them are currently for sale).

Below is a chart showing the number of single-family homes sold that were listed for $2M-$3M since 2010. 2020 also includes homes currently for sale or under contract that are listed for $2M-$3M (and we still have 5 weeks left in the year for more homes to be listed).

Here are some interesting details about the $2M-$3M single-family home price point:

  • The average sold price to original asking price from 2015-2019 was nearly identical, ranging from 94.1%-94.7%, but this year that average shot up to 96.5%. Also, from 2015-2019, the average days on market was 93 days, but in 2020 it dropped to 58 days. Both of these changes indicate a much stronger appetite from buyers for $2M+ homes.
  • Since 2010, 92.3% of homes were/are located in the 22201 (20.1%) and 22207 (70.2%) zip codes
  • I was surprised that only about half of the sales are new construction. I would have expected new construction to make up a much higher percentage of these high-price sales.
  • Prior to 2019, a $2M+ home usually meant at least 1/3 of an acre, but in 2020 it brings an average of just ¼ of an acre
  • Bedroom/Bathroom count has remained pretty consistent over the years, with an average of 5-6 bedrooms, five full bathrooms, and one half bathrooms
  • If you’d like to click through the $2M-$3M single-family homes since 2010, here’s a link!

If you’re as curious as I was about what the chart for $1M-$1.999M single-family homes looks like, it’s quite different. Enjoy!

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