Arlington Condo Mid-Year Review

Question: How has Arlington’s condo market performed in the first half of 2021?

Answer: Given the tremendous appreciation we’ve seen locally and nationally on prices for single-family homes and townhouses, the mostly unchanged values of condos in Arlington highlights how much the condo market has struggled compared to the rest of the housing market. We did experience some periods of value loss in the last quarter of 2020 and early in 2021, but the first half data (and my experience in the market) suggests that prices have recovered and leveled out to about the same values we saw in 2019.

The biggest question I have is whether we will sustain these prices or see a slow decline as people adjust to new work arrangements and housing preferences in the wake of COVID. While it’s possible that we could see a delayed price surge due to sustained low interest rates and returns to offices, I think that scenario is unlikely.

This week we will take a look at Arlington’s condo market in the first half of 2021. Note that the data does not include Cooperatives (e.g. River Place) or age restricted housing (e.g. The Jefferson).

Prices Relatively Flat, Listing Volume and Inventory Up

I think the biggest story in the condo market for Arlington and the DC Metro area is the historically high number of condos being listed for sale since Q3 2020. There is clearly a flight out of condos by homeowners and investors and the demand is not high enough to absorb the extra supply, so inventory levels have returned to 2015-2016 levels when we were in the midst of a near zero-growth condo market (in Arlington).

The return to 2015-2016 inventory levels isn’t a bad thing, but the suddenness of that shift was difficult for sellers to manage after we experienced a red-hot condo market from late 2018 (Amazon HQ2 announcement) to early 2020 (pre-pandemic).

Demand Metrics Down, Disaster Avoided

Demand metrics like days on market, percentage of homes selling within a week, and the percentage of sold price to the original asking price are all down to 2017-2018 levels (pre-Amazon announcement) and prices are more reflective of what we saw in the first half of 2019.

During the pandemic, there were concerns of a fundamental shift in the condo market that would lead to a significant re-pricing of condo values but that’s clearly not the case. Sure, it’s tough for condo owners to take a step backward while the single-family/townhouse market surges ahead, but the condo market looks to be recovered and safe at this point.

If you’re interested in seeing last week’s mid-year analysis of the single-family housing market, you can check it out here.

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

Arlington Single-Family Home Mid-Year Review

Question: How has Arlington’s single-family housing market performed in the first half of 2021?

Answer: The news has been full of stories and data about the explosion in real estate prices and intense competition for single-family homes across the country. Arlington has been no exception.

This week we’ll take a look at some charts and data that highlight what we’ve experienced so far in 2021 for single-family homes (SFH) in Arlington.

Overview: Prices Up, Listing Activity Up, Inventory Down

The year-over-year median price for SFHs increased 8.6% in Q1 and 20.6% in Q2 (remember that Q2 2020 had end-to-end strict COVID lockdowns), with both quarters exceeding a median price over $1.1M, the first time that has happened in any quarter in Arlington. If you want to skip 2020 because of COVID, Q1/Q2 median prices in 2021were up 17.4% and 21.1%, respectively, compared to 2019 median prices.

After back-to-back years of below-average listing volume, the number of SFHs listed for sale in the first half of 2021 exceeded 900 homes for the first time since 2017 and ended up well above the 10-year first half average of ~860 homes listed for sale during the first half.

Despite strong listing volume, active inventory hit a 10+ year low due to demand outpacing new supply. We finished Q2 with 1.3 months of supply, which is about twice as high as Loudoun County, which is struggling tremendously with inventory levels.

Bye-Bye Affordability

Of the six zip codes with enough SFH supply to generate reliable data (22206, 22209, and 22213 don’t have enough SFH sales), only one had an average sold price below $1,000,000, compared to four in 2019!

One of my biggest takeaways from the 2021 market so far is just how quickly prices have increased in the least expensive neighborhoods. The two zip codes with the lowest average SFH price, 22203 and 22204, increased by 16.8% and 20.7%, respectively, from the first half of 2020, while the four most expensive saw increases ranging from .4% to 8.8%.

In 2020, the average home in 22201 (most expensive zip code) was 95% more expensive than the average home in 22204 (least expensive zip code). In 2021, the gap closed quickly with the average 22201 home being 62% more expensive than the 22204 average.

Price Distributions Skew High

While the largest volume of sales still falls in a sub-$1,000,000 range, the price distribution in Arlington skews high. Despite the high average/median prices, Arlington doesn’t have much of an ultra high-end market, with just three sales over $3M and just two SFH sales over $3.5M in the last five years.

Prior to this year, the percentage of sales under $800k was always greater than the percentage of sales over $1.5M. In the first half of 2021, not only were there a higher percentage of sales over $1.5M but the number of sales over $1.5M nearly doubled the number of sales under $800k!

Demand Intensifies

Arlington had more time than other markets to adjust to such intense demand because the market really took off after Amazon announced plans for HQ2 in November 2018, but the pressure of COVID and low interest rates have intensified that demand.

The number of homes sold within one week and the numbers of homes sold at or above the asking price both exceeded 60% of total sales for the first time.

Looking forward, it’s hard to see market conditions changing too dramatically any time soon. Things have slowed down a bit off peak demand as is usually the case in the summer and around the holidays, but I expect another strong fall season and a quick pick-up in January/February 2022 from a holiday lull.

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

The Right Lender Makes A Big Difference

Question: Does it matter which lender/mortgage company I choose when I purchase a home?

Answer: Choosing a good lender is one of the most important decisions you make during the home buying process. In a competitive market like we’re in now, choosing the right lender goes beyond a low interest rate and access to good loan products; it can be the difference between having your offer accepted or passed over.

Stronger Offers

Better Pre-Approval: When I review offers on behalf of a Seller, I put a lot of value in the quality of the lender/bank who wrote the pre-approval letter for the Buyer. A lender who has taken the time to review credit and financial documents, and get a thorough understanding of the Buyer, means the risk of financing falling through is much lower than with lenders who generate pre-approvals based on a short form with inputs from the Buyer, without verification.

Most agents representing a Seller will contact the lender on the pre-approval letter to ensure they’re responsive, personally familiar with the Buyer’s financial qualifications, and are confident in closing based on the contract terms (price, settlement timeline, etc). Having a lender on your side who will answer the phone and understands the importance this communication can make all the difference in a competitive market.

Close Faster: Online lenders, larger banks, and credit unions often have difficulty closing in less than 35-45 days, but a good lender can often settle in less than three weeks. If you find yourself competing for a property, working with a lender who can close quickly will significantly increase the probability of your offer being chosen compared to a lender who needs at least five weeks.

Don’t Miss Settlement

Good lenders do not miss the settlement date. Their reputation and business rely on it. If you miss the contracted settlement date, you’re (usually) in default and expose yourself to risks including loss of Earnest Money Deposit, incurring the Seller’s carrying costs, or having the contract voided by the Seller.

A good question to ask your lender is where their staff works. There are quite a few people involved in getting your loan approved including the loan officer, processor, and underwriters. Lenders with a history of missing settlement deadlines often have staff working in different locations, that don’t regularly work together. If your lender works in the same physical office as those people, that’s a good indication that they can handle issues efficiently and have a higher probability of meeting the settlement date.

Don’t Get Duped (Interest Rate vs APR)

Be careful when you’re comparing interest rates, especially online rates. Make sure you’re comparing the Annual Percentage Rate (APR), not the interest rate. Many lenders advertise lower rates by including points (you pay cash up-front for a lower rate) or they charge higher fees. The APR is a measure of the total cost of the loan, including points, fees, and interest rate and allows for an apples-to-apples comparison.

Additionally, the advertised rates are often based on the ideal borrower profile and loan amounts. A true rate quote requires the lender to have your credit information, debts, income, purchase price, and down payment. Even with that information, I’ve seen lenders quote low rates to capture a Buyer’s attention and then increase the rate/fees once it comes time to lock everything in. Be careful and ask questions.

Reliable Pre-Approvals

A reliable pre-approval gives you the confidence that you’ll qualify for the loan you’re applying for. Weak pre-approval letters lead to surprises during the loan application process, which can lead to rejection letters, delays, and/or a lot of wasted time and money. The last thing you want is to find out you don’t qualify after you’ve spent money on a home inspection, appraisal, and started packing for a move that may not happen. Having a lender review all of your documents early also gives you time to fix credit scores, debt ratios, and more in order to increase your purchasing power and/or lower your interest rates.

Further, in competitive markets like this, it’s common for winning offers to waive the Financing Contingency (protects your deposit in the event you don’t qualify for your mortgage). Having a thorough pre-approval done can give you the confidence needed to waive this contingency, and be competitive, with limited risk.

Loan Consultant

In most cases, buyers should be considering multiple loan products and finding the best fit. This is particularly true if you’re buying and selling a property, if you’re exploring low down payment options, or if you’re planning to own the property for less than 10 years and can benefit from the lower rates of an Adjustable Rate Mortgage (ARM). A good lender will have access to a wide range of great products and be able to advise you on the type of loan that nets you the best long-term results.

If you’re considering buying or in the process of talking to lenders, I’d be happy to make some recommendations based on your financial situation, type of purchase, and goals. Feel free to reach out to me at Eli@EliResidential.com.

Reserve Studies Required Every Five Years for Condos/HOAs

Question: How often do Condo Associations and HOA/POAs need to conduct a Reserve Study?

Answer:

Virginia Requires New Studies Every Five Years

In light of the recent condo tragedy in Miami, I thought it would be a good time to remind everybody that Virginia requires Condominium Associations and Home Owner/Property Owner Associations to conduct a new Reserve Study at least once every five years.

In addition to providing valuable financial/budget guidance, Reserve Studies are also an important way to ensure your building/community remains in safe working order and structurally sound.

What is the Purpose of a Reserve Study?

During the Study, an engineer, or team of engineers, will inspect all common elements of the building/community to provide an assessment of current condition, useful life expectancy, and projected cost of repair/replacement. A building inspection includes everything from the elevators, to foundation, to hallway carpet.

After the inspection, the Study team will provide a detailed report of their findings and an assessment of the future financial needs of the Association over the next 30 years to maintain and replace the common elements of the building/community.

In most cases, these annual financial needs are analyzed against the current Reserve Balance (Association’s savings to pay for common maintenance and replacement costs) and the current Reserve Contribution amounts to determine if adjustments need to be made to the contribution levels in future budgets. Accelerating savings for an under-funded Reserve are one of the most common reasons Associations increase dues. If the funding requirement is high enough and the repair/replacement needs are urgent, that is when Associations will consider charging a Special Assessment to fund the Reserves immediately.

Don’t Forget About Presentation

I have reviewed tons of Reserve Study reports over the years and there is a wide range in quality. In my opinion, a quality report should not only be incredibly detailed in the inspection findings, but also as detailed in the presentation of the financial projections/recommendations. It’s also critical that this information be presented in an organized and easily understood format, which is not an easy feat when dealing so much information. If you are helping your Association choose a company to lead the Reserve Study, don’t forget to review reports they’ve produced for other communities so you can see how well they present their findings.

Important for New Buyers Too

In addition to Reserve Studies being important for building maintenance and budgeting, every new Buyer into your community will receive a copy of the Reserve Study (along with a other Association documents) once they’re under contract and has a three-day review period in which time they can void the contract for a refund of their deposit. So having a current and easily understood Reserve Study report is also a critical part of keeping Buyers under contract and the resale market in your community from under-performing.

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

Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.Reserve Studies Required Every Five Years for Condos/HOAs

Is The Real Estate Market Slowing Down?

Question: Have you noticed a change in the real estate market lately?

Answer:

Summer Slowdown is Normal, Likely More Pronounced in 2021

It is normal for the real estate market to slowdown as we transition from the intensity of the spring market into the summer market and we (myself, my colleagues, and lenders I’ve spoken to) have seen that shift over the last few weeks.

I don’t think we are anywhere close to experiencing a market correction, but I do think the change in market conditions from the spring market (which really began in January/February 2021) to the summer market will be more pronounced this year because of COVID.

Buyers More Distracted By Travel/Events

Now that most of our buying population is vaccinated and businesses/events are open, Buyers’ attention is finally being focused on trips, events, and visiting friends & family rather than solely on their home search. Diversions are usually highest in the summer and around the holidays, thus historically slower markets, but this summer and holiday season will be met with an unusually high number of distractions for Buyers (that’s a good thing!).

Asking Prices Catching Up

Another factor in the shift in this summer’s market is that asking prices are finally starting to catch-up, in many cases, to actual market values. During the first 3-4+ months of 2021, the sales data (sold prices) wasn’t there or wasn’t enough to give Sellers the confidence to increase their asking prices 5-10%+ over 2019-2020 prices, which is why we’ve seen such extreme price escalations this year. Now that asking prices are falling more in-line with what the market is willing to pay (based on my experience over the last 4-8 weeks), the number of offers and wild escalations should subside.

What Likely Will/Will Not Happen

Homeowners planning to sell should not worry that the bottom is falling out of the market, but expectations should change compared to previous months. Here’s what I think the shift will and will not look like:

  • WILL result in fewer total offers on competitive homes
  • WILL result in fewer properties selling within the first week
  • WILL result in Buyers negotiating better/more contingencies
  • WILL result in less extreme price escalations
  • Will result in fewer homes listed for sale (likely a 20-30% drop compared to March-May)
  • WILL NOT result in prices falling (prices should stabilize)
  • WILL NOT result in a Buyer’s market

Spring vs Summer, 2016-2019

Let’s take a look at how the Arlington real estate market shifted from spring to summer from 2016-2019 to give some historical perspective. I did not include 2020 because it will always be an outlier that provides little value for historical trends/context. I looked at four data points that I use to measure market conditions:

  1. Percentage of homes that went under contract within one week of being listed
  2. Percentage of homes that sold for at or above the original asking price
  3. Average sold price compared to the original asking price
  4. Number of homes listed for sale

Here is a summary of findings from the charts shared below:

  • Intensity of demand (under contract within a week and homes sold for at or above ask) dropped from the spring to summer season all four years, with the exception of a slight increase in the homes being sold for at or above ask in the summer of 2019 (likely due to a significant drop in supply due to the Amazon HQ2 announcement in November 2018 putting upward pressure on prices all year)
  • The average sold price to original asking price dropped each year except 2019 (remained almost unchanged) suggesting less extreme escalations and more price negotiations
  • The number of homes listed for sale in the summer dropped by about 20-30% each year compared the spring market
VA Market Trends: Arlington vs Fairfax & Loudoun County

Question: How does Arlington’s housing market compare to what you’re seeing in Fairfax County and Loudoun County?

Answer: The Arlington single-family home (SFH) market has been competitive, and prices have increased, but the shift hasn’t been nearly as dramatic as what we’ve seen further west in Fairfax County and Loudoun County.

The Arlington condo market has improved from the end of 2020/early 2021, and prices seem to be coming back, but inventory levels are still much higher than they were in the years preceding the Amazon HQ2 announcement.

Listing Activity Up In Arlington, Normal In Fairfax And Loudoun

The number of SFH listings in Arlington this spring is up noticeably compared to prior years, but the biggest story continues to be the amount of condos being listed for sale. I previously wrote about the historical volume of condo listings we had last fall and that trend has continued through this spring, with the total number of condos listed for sale from March-May significantly higher than any other spring market in the last 10+ years.

The number of SFH listings in Fairfax County and Loudoun County have been consistent with past spring markets, down slightly compared to 2018 and 2019.

Demand Meets Or Exceeds New Supply, Except Condos

Despite higher-than-average listing activity in Arlington, the SFH inventory levels remain very low because there is enough demand to absorb the extra supply. SFH inventory has remained at about one month of supply throughout 2021.

Condo demand has not met the higher-than-average listing activity and condo inventory has steadily increased through the spring, after dropping (and flattening) from 5-year highs this winter. The Arlington condo market has settled at around 2.5 months of supply for the last 6 months, which represents a market that is more favorable to sellers than buyers, but still a significant shift from the post-Amazon HQ2 market with 2-3 weeks of supply for about 18 months.

Demand in Fairfax County and Loudoun County has been exceptionally high and inventory levels remain dangerously low with just 2-3 weeks of supply for nearly the last 8 months.

Prices Are Up (Of Course)

Prices for SFHs in Arlington are up, with the median price of a SFH in Arlington exceeding $1.2M for the first time ever in May. While the prices in Arlington are up noticeably, it’s nothing compared to the massive appreciation seen in Fairfax County and Loudoun County over the last four months where we’ve seen up to 15-20% year-over-year increases in prices throughout both markets.

Condo prices have increased from late 2020/early 2021 and seem to be settling in a bit below pre-pandemic numbers. I didn’t include a chart for condo prices because there’s too much variability and it doesn’t provide much value.

Escalations Over Ask Are The Norm, Likely To Change Soon

This spring, the average SFH in all three markets has closed for 3-4.5% over the original asking price. I expect this number to come down over the next few months as asking prices catch up with what the market is willing to pay and the attention/priorities of buyers starts to shift to other things like travel, events, and seeing family and friends.

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

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

Are Buyers Really Waiving Inspections? The Many Approaches to Home Inspections

Question: What are the different ways of structuring a Home Inspection Contingency and how do they affect the odds of my offer being accepted?

Answer:

Last Week’s $1,000 Donation Poll

Before I jump into today’s column, I want to announce that based on last week’s vote, our team donated $1,000 to the Fisher House Foundation on behalf of the ARLnow community in honor of Memorial Day. Fisher House Foundation builds comfort homes where military & veteran families can stay free of charge, while a loved one is in the hospital. Thank you to everybody who voted and commented with feedback about the various charities.


Home Inspection Contingency Overview

Not only is this market pushing Buyers to offer well over asking price, it’s also pushing them to take on a lot of risk by reducing or eliminating the protections offered by standard contingencies: Inspection, Financing, and Appraisal Contingencies are the “Big Three.”

Of the “Big Three” contingencies, the Home Inspection Contingency represents the most risk to a Seller because it gives the buyer a nearly unilateral option of voiding and/or the ability to request Seller repairs or Seller credits based on the findings of the inspection. Thus, Buyers who reduce or eliminate the risk of a Home Inspection Contingency to a Seller are viewed much more favorably than Buyers who do not.

A home inspection is when a Buyer hires a licensed Home Inspector to provide a report on the condition of a home. They examine and test things like appliances, the roof, water drainage, and the electrical system to help Buyers understand what they’re buying. Depending on the size and age of a property, inspections generally cost anywhere from ~$300-$800+ before common add-ons like radon tests and chimney inspections.

If you’re buying a home, there are a few different ways of approaching the home inspection.

Home Inspection with Right to Void or Negotiate Repairs and/or Credits

This option is most favorable for Buyers and least favorable to Sellers because it allows the Buyer to void the contract (and get their Earnest Money Deposit back) if they don’t like the results of the inspection (or even if they just get cold feet) and also allows Buyers to make any requests they want for Seller repairs or Seller credits.

If a Buyer decides to void, there’s nothing the Seller can do, as long as the Notice to Void is issued within the proper window of time. Buyers can make any requests they want of the Seller for repairs and credits, but the Seller can also negotiate or reject whatever requests they want. If the Buyer and Seller are unable to reach an agreement on repairs and/or credits within a specified number of days, the Buyer has the option of accepting the Seller’s latest offer for repairs and/or credits or voiding the contract.

Most people would consider this the standard/default type of inspection, but in hot markets like we’re experiencing now, this structure is much less common.

Home Inspection with Right to Void Only

Also known as a Pass/Fail inspection. This option is less favorable to Buyers and thus, better for Sellers. In this scenario, Buyers retain their ability to void the contract after doing the home inspection, but give up the negotiation period to request repairs or credits from the Seller.

The idea behind this inspection structure is to communicate to the Seller that the Buyer just wants to ensure there are no major issues, but is willing to take on the cost/burden of smaller issues. Of course, there’s nothing stopping the Buyer and Seller from agreeing to repairs or credits within this structure, and it happens more often than you might think. This is especially true if a larger issue is discovered that is a surprise to both parties such as water penetration or a cracked foundation.

In many cases, the timeline that Buyers have to complete their inspection and make a decision to void or not is much faster than a “full” inspection, which is another benefit to the Seller. If the contract is going to be canceled, Sellers want that to happen sooner than later.

Pre-Inspection

In this scenario, the Buyer does their home inspection before making an offer. It allows the Buyer to make a significantly more appealing offer to the Seller because it does not include a Home Inspection Contingency (no right to void based on the inspection), while giving the Buyer all the benefits of being informed by a complete home inspection.

The biggest downside to this approach is that Buyers are paying for a home inspection before they know whether or not their offer will be accepted so Buyers can pay hundreds of dollars and spend 2-3+ hours at an inspection for a house that they get significantly outbid on. In many cases I’ve experienced with hot homes, multiple buyers are doing pre-inspections. I recall a house in Arlington in early 2020 that had something like 20 pre-inspection done!

This approach is not always an option because there may not be enough time to schedule a pre-inspection before the Seller is reviewing offers or the Seller may not allow pre-inspections because they take up large chunks of time and get in the way of other Buyers seeing the property.

No Inspection or Info-Only Inspection

Unfortunately, the market has gotten so competitive that many Buyers are purchasing homes without doing a home inspection or doing one for informational purposes only, whereby the inspection is done after an offer is accepted without any contractual ability to void, thus risking the (likely high) Earnest Money Deposit if the results of the inspection are bad enough to warrant terminating the deal.

This is a particularly unhealthy place for the market to be because it transfers a massive amount of risk onto Buyers who choose to commit their deposit without any due diligence or makes it very difficult for Buyers who refuse to take on that type of risk to actually buy a home.

What Should We Do?

While I doubt it will ever happen, I’d like to see the state or our Realtor Associations introduce a basic/minimum inspection requirement for homes being sold to non-builders/contractors/investors (like the “accredited investor” threshold that the SEC has for certain investments).

This would mean that in a hot market where Buyers are being pressured not to do a home inspection, Sellers would pay a relatively small amount ($200-$300) for an inspection report on the core systems of the home to be conducted by a licensed Inspector, with that report available prior to offers being made or after accepting an offer, but with a short review period that includes a right to void (like the required HOA/Condo document review period).

The best advice I can give is that it’s important to understand the risk-reward balance of any decision you make in real estate, especially as it relates to structuring or removing the Home Inspection Contingency.

VOTE: An ERG Charitable Donation

Thank you to all that have served and to their families who have sacrificed or lost loved ones for our freedom. I hope you and yours had a special Memorial Day Weekend, back with friends and family to celebrate our country.

The Eli Residential Group will be making a $1,000 donation to one of three Veteran/Military Non-Profits. Please vote below and the charity with the most votes will be chosen for the donation.

  1. Fisher House Foundation
  2. K9s For Warriors
  3. Wounded Warrior Project

To vote please visit the poll on ARLnow by clicking below.

How Many Homes Sell Off-Market or Pre-Market in Arlington?

Question: A friend of mine found a house off-market through their neighbor. Do you have any data that shows how many homes get sold before every hitting the market?

Answer: Most people assume that there are a lot more pre-market and off-market home sales than there really are. The data I used to determine likely pre/off-market activity suggests that only about 4-5% of Arlington homes sell without being listed first.

However, within that 4-5%, you have a wide range of circumstances that cause homes to be sold pre/off-market that aren’t really part of the “standard” sale process including tenants buying from their landlords, investor deals, custom homes, new construction condos, deals between neighbors/family/friends, and others. In this case, I’m loosely defining the “standard” sale process as a homeowner who begins the process of preparing their home for sale with the intention of offering it to the public.

So, the actual percentage of “standard” sales that follow a more traditional sales process that end up selling pre/off-market is likely much lower, and probably closer to 1-3% of total sales.

To come up with my pre/off-market estimates, I looked at the number of sold (Arlington) homes in the MLS that had zero days on market and the number of homes with zero and one days on market. A home with zero days on market was almost certainly sold pre/off-market and a portion of homes with one day on market were sold pre/off-market, but it’s impossible to tell from the data how many of those were pre-market vs how many were listed and the seller accepted an offer on the first day.

Not every pre/off-market sale gets entered into the MLS so those sales won’t show up anywhere in my data, however, I think this dataset gets us pretty close.

The chart below shows the percentage of homes each year that sold with zero or zero/one days on market.

Changes in Pre/Off-Market Rules

You’ll notice from the chart that there was a steady rise in pre/off-market deals through 2019, followed by a quick reduction in those deals since 2020.

For years prior to 2020, in order to gain a competitive advantage, agents and brokerages were creating their own “shadow” pre/off-market listing platforms/feeds that circumvented the cooperative agreements established through the MLS.

In the fall of 2019, Bright MLS (our regional MLS) announced major changes to protect the cooperation agreements of the MLS and required a home to be entered into the MLS within one business of any public marketing or advertising (For Sale sign, social media, email blasts, mailers, website, etc). Since this announcement, the number of pre/off-market deals have dropped substantially, for the betterment of both buyers and sellers, in my opinion.

I wrote about these rule changes in more detail and explained the MLS/Bright MLS concepts further in this October 2019 column.

Best and Worst Months to List a Rental

Question: What time of the year is most and least favorable for putting a property on the market for rent?

Answer: The rental market follows similar seasonal trends as the resale market in that spring tends to be the best time to list a property and the market is slowest during the winter months. For this market analysis, I looked at all rentals in Arlington from 2015-2019 (I kept 2020 out because it’s an anomaly) to determine how the month a property is listed for rent impacts a landlord’s negotiation leverage and the days on market. I split the data into apartment-style properties and detached/townhouse properties to see if there was much variability, but the trends are similar for all property types.

Best Months to List: March – July

Worst Months to List: September – December

The data I looked at to determine the best and worse months are the percentage of the final rental price to the original asking price (indication of how much leverage landlords have), the average days on market, and the percentage of properties rented within two weeks of being listed for rent. These data points provide some of the best indications of how successful you will be renting a property at different times of the year.

While there are clearly certain months of the year that are better/worse to rent, I think it’s also important to note that the gap between the best and worst month(s) is not massive, but it’s enough that landlords should work to put themselves on a spring/early summer leasing cycle and avoid signing leases that expire in the late fall/winter.

If you are a tenant, you can expect the most properties coming to market from May – July and a dramatic reduction in options from October – December.

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