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.

Cost of an Arlington Bedroom

Question: How much more can I expect to pay for a 5BR house compared to a 4BR house?

Answer: The primary criteria for most buyers is the number of bedrooms, so this week we will break down the cost of detached and condo housing in Arlington by bedroom count. The dataset includes all closed sales since Jan 1 2020 except a $45M sale, River Place Coop, and age-restricted housing. Below are some highlights from the data:

  • For detached homes, the biggest price jump is from four bedrooms to five, with an average price increase of 33.1%
  • The best value for a detached home, with the lowest cost per bedroom, is a four-bedroom house
  • Larger homes are much harder to find in South Arlington, with just 58 homes with five or six bedrooms sold since 2020 compared to 353 sold in North Arlington
  • Nobody builds smaller homes anymore. Of the sold homes built within the last 20 years, zero had two bedrooms, three had three bedrooms, and 33 had four bedrooms compared to 141 and 64 with five and six bedrooms, respectively.
  • Smaller, more affordable homes sell faster with ~70% of two-and-three-bedroom detached homes selling after just 1-10 days on market compared to ~40-45% of five-and-six-bedroom detached homes
  • For condos, going from a two-bedroom to a three-bedroom adds 78.1% and is even more expensive in North Arlington, nearly doubling the cost
  • The number of three-bedroom condos sold is <10% of the number of one-bedroom and two-bedroom units sold
  • If you are looking for a three-bedroom condo on a budget, focus on South Arlington, where the average comes in under $550,000 compared to over $1.7M in North Arlington
  • Expect to pay about 20% more for a property (detached or condo) built in the last 20 years

Hopefully this helps those of you currently searching for a home in Arlington or planning a housing search soon!

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

Quarterly Review of Arlington/DC Area Real Estate

Question: How did Q1 compare to other quarters and what does that mean for Q2?

Answer: The housing boom has been front-and-center in the national news cycle for about six months now and Q1 blessed many homeowners and builders with amazing results, while inflicting similar levels of frustration on buyers.

Despite the national, regional, and local craziness the Arlington single-family home (SFH) and townhouse (TH) markets actually didn’t look that different in Q1 2021 compared to the last couple of (post-Amazon HQ2) years so the pandemic-related housing boom hasn’t created nearly the systemic shock here as it has in other local markets like Fairfax County and Loudoun County. Months of Supply (measure of supply and demand) for SFH is down 36% YoY for Q1 in Arlington, but over 50% in Washington DC, Fairfax County, and Loudoun County with Loudoun County SFHs down an incredible 73.9% YoY in Q1.

Arlington Quarterly Market Performance

First, let’s take a look at a breakdown of the Arlington SFH/TH quarterly market performance, with some highlights bulleted below:

  • If you’re buying a SFH/TH that has been on the market for 10 days or less, prepare to pay an average of 2-3% over the asking price. 12% of buyers since 2020 have paid 5% or more over the asking price.
  • Since 2020, about two-thirds of SFH/TH properties go under contract in 1-10 days and only 21% have stayed on market for more than 30 days
  • You can expect price escalations on hot properties to be even further above the asking price in Q2 compared to Q1, based on historical data. The only exception to this was in 2020 because Q3 functioned like Q2 due to a delayed spring market caused by the pandemic.
  • Expect about one-third of 2021’s SFH/TH properties to be listed for sale in Q2, the most of any quarter by a significant margin
  • Among SFH/TH properties that went under contract in 1-10 days in Q1, the average sold price of those homes increased 11.8% over Q1 2020. Last year there was a 5.7% increase in average sold price of hot properties compared to Q1 2019.
Contract Year/QuarterAvg Sold to Org Ask (Properties 1-10 Days On)% 1-10 Days on MarketListing VolumeListing % of Annual Total
2016100.7%38.8%1640100%
Q1100.7%38.9%40525%
Q2101.0%46.6%55534%
Q3100.4%34.0%40224%
Q4100.2%31.3%27817%
2017100.9%41.0%1744100%
Q1101.0%47.1%48728%
Q2101.3%46.1%58733%
Q3100.7%36.5%41524%
Q4100.1%28.4%25515%
2018101.1%43.0%1614100%
Q1101.2%50.4%40025%
Q2101.5%48.1%54934%
Q3100.9%39.4%39024%
Q4100.5%31.3%27517%
2019101.9%56.9%1451100%
Q1101.8%63.4%38927%
Q2102.2%61.0%47833%
Q3101.9%54.6%34624%
Q4101.1%43.8%23816%
2020102.2%59.5%1600100%
Q1102.4%65.4%35622%
Q2101.8%58.1%39925%
Q3102.7%63.9%49331%
Q4101.9%50.0%35222%
2021102.7%60.3% 
Q1102.7%60.3% 

Northern VA and Washington DC Market Performance Comparison

As noted earlier, the pandemic created a much sharper change in the real estate markets outside of Arlington because Arlington had already experienced similar changes due to Amazon’s HQ2 announcement in November 2018. Below are some charts comparing the SFH markets (and one comparing the condo markets) in Washington DC, Arlington, Fairfax County, and Loudoun County, with some highlights bulleted below:

  • In 2018 and most of 2019, Months of Supply for SFH in Washington DC, Fairfax County, and Loudoun County was 2-3x higher than Arlington (indicating a more favorable market for buyers). In Q1 2021, Fairfax County and Loudoun County had about half the Months of Supply as Arlington and Washington DC, clearly a sign of buyer preferences for more space, lower $/SqFt, and de-prioritization of commute time and walkability.
  • The most dramatic pandemic-related market shift for Arlington has been the condo market going from the most favorable market for sellers pre-pandemic to a near tie with Washington DC for least favorable, by a significant margin
  • Fairfax County stands out for the huge drop in active SFH home listings, dropping from an average of nearly 2,000 listings/quarter in 2018 to less than 500 in Q1 2021
  • The data suggests relatively little change in average prices in Q1 2021 in Arlington and Washington DC, but I think this is more about the data composition than a reflection of actual pricing because everything I’ve experienced in the market suggests strong price growth in Q1 2021
  • Median days on market for SFH has been below 10 days in all four markets since the pandemic began

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

Demand For Home Pools Increasing

Question: Have you seen a change in demand for home pools since COVID began?

Answer: In 2017 I wrote that for most homes in Northern VA (and the DC Metro), having a pool had a negative impact on resale because most buyers see them as a hazard, unnecessary expense, and/or inefficient use of yard. However, COVID has changed the minds of many buyers and caused demand for homes with pools to increase significantly.

Demand For Pools Much Higher in 2020+

Below is a look at the data (as of April 4 2021) behind homes sold with a pool in Arlington County, Falls Church City, Alexandria City, Fairfax County, and Loudoun County since 2015. The numbers were pretty consistent prior to 2020, then demand clearly shifted in favor of pools due to COVID. All indicators improved significantly for people selling a home with a pool.

Year ListedAvg Sold to Original AskAvg Days on Market% Sold Within 10 Days# Sold
201695.4%6325%646
201796.1%5729%674
201896.2%5433%680
201996.3%5834%661
2020-2198.9%3653%772

Demand Similar Across Northern VA

I broke down the sales data since 2015 between each Northern VA jurisdiction to see if certain markets perform better or worse on sales of homes with pools. It turns out that there’s not much of a difference on where you’re buying in Northern VA, the interest in pools seems to be relatively similar across each market. Note how few homes in Arlington, Alexandria, and Falls Church have pools.

County/CityAvg Sold to OriginalAvg Days on Market% Sold Within 10 DaysAvy Lot Size# Sold
Alexandria City95.0%4138%0.4464
Arlington96.7%6232%0.3477
Fairfax96.3%5434%1.392445
Falls Church City97.7%5744%0.3516
Loudoun96.5%7134%5.56974
Average96.3%5934%2.483576

Looking For A Pool?

If you’re looking for a house with a pool in Northern VA, I wrote an article last year breaking down what sub-markets you’re most likely to find homes with a pool for sale and the sales data for those homes.

Unfortunately, it’s incredibly expensive to build your own pool here. Most people are shocked when they find out what it costs to build a gunite (concrete) in-ground pool around here, which usually runs $150k-$200k+ before additional patio and landscaping work.

I linked up with local Arlington landscape designer/expert Rob Groff, of Groff Landscape Design, to find out why it’s so much more expensive to build a pool here than elsewhere in the region/country and ask about a common strategy I’ve heard from homeowners to hire an out-of-town company to build a pool for less and pay for their travel/lodging during the project to save some money.

Q: Why is it so expensive to build a pool here?

A: It’s so much more expensive to build a pool here because permitting is more time consuming and expensive, materials and labor are more expensive, average lot size is smaller which oftentimes causes for problems, engineering, municipal related site preparation such as construction entrances, super silt fence, site restoration, drainage, etc are all a factor.

Q: Is it more cost effective for homeowners to hire an out-of-town pool company who builds pools for less money and pay for their travel/lodging?

A: A lot of pool companies don’t include all expenses up front and therefore there are a ton of surprise costs on the back-end of the pool project.  I’ve seen this a lot especially from out of area pool companies.  We actually setup a spreadsheet and accompany some of our clients in the vetting process.  We had a local company at 205k for a pool that a Fredericksburg based company had at 145k.  By the time the meeting was over and we corrected the Fredericksburg company to make sure they didn’t leave anything off, they were up at 215k.

Q: Are there more affordable options for in-ground pools that you recommend?

A: In Northern Virginia, a gunite (concrete) pool has been the standard for a long time.  On average, we see these coming in at $150k-$200k in Northern Virginia (not including the pool patio and other surrounding elements like landscaping, lighting, etc).  Fiberglass pools are growing in popularity and their base price is closer to $55k-$65k (River Pools and Spa). These fiberglass pools don’t feel the same to many homeowners as a true gunite pool, but they save enough money to make people consider them. There are a ton of good videos on their website that explains the differences between gunite and fiberglass, etc.

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

2021 Home Design Trends

Question: What design trends are you seeing this year?

Answer: Over the last few years, home design has turned from neutralized white/grey trends that have been popular for most of the last decade, especially in new construction, to include warmer colors and more natural looks, although these trends have yet to show up in most new construction projects I’ve seen (single-family and condo).

Each year every design magazine, paint company, and furniture store comes out with their annual design trends. I collected some of the most common trends I found across all of them, as well as those that I’m seeing show up more in homes in the DC Metro, and compiled them into some fun graphics.

The impact of COVID shows up in a big way in many trends including trying to bring the outside in (plants/indoor gardens and wood-grain kitchens) and getting more out of existing spaces (closet-offices and outdoor kitchens). Let me know what you think and if you’ve introduced any of these colors, designs, or improvements to your home recently!

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

Housing Market Performance by Price Point

Question: Are you able to tell how much of the appreciation in the overall Arlington housing market is from homes in the upper or lower price ranges?

Answer: I’ve often wondered if the appreciation in Arlington’s housing market is driven more by the lower, middle, or upper end of the market. My theory, prior to doing an analysis, was that homes in the lower price ranges were appreciating faster than those in the upper ranges, thus affordability was suffering more than any other category of housing.

To test this theory, I split each year into a lower, middle, and upper third and found the median price within each price range (note: the numbers for average prices looked very similar). I split the market into single-family/townhouses and condos for a more accurate picture of actual market behavior.

As it turns out, for the single-family/townhouse and condo markets, the upper third of the market has appreciated more over the last ten years than the lower and middle thirds. As is usually the case, single-family homes and townhouses appreciated much faster than condos during the same period, with single-family/townhouses practically doubling the rate of condo appreciation over the last ten years.

Explanation of Charts: Appreciation and Market Speed

Below you will see charts showing the median price of the lower, middle, and upper price tiers for single-family/townhouses and condos in Arlington over the last ten years. I also included a chart showing the cumulative appreciation for each price tier to highlight when each market experienced the greatest price jumps or most price stability.

The last two charts show the same concept but applied to Days on Market. Specifically, looking at what percentage of homes went under contract within the first 1-7 days on market. I’ve always felt like this metric is one of the best ways to understand how fast the market is moving and the intensity of demand.

All three price tiers show similar speed/intensity of demand over the years, with the only noticeable different being the upper third of single-family/townhouses, which is likely skewed by new construction, which often has a much higher days on market because of how often homes are listed before they’re finished.

I hope you find these charts as interesting as I do! If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.

Condo Smoking Bill Passes in Virginia

Thank you to the ARLnow reader who brought Virginia House Bill 1842 to my attention because it is likely to be a game-changing law that will allow condo Boards to more easily ban smoking inside units and on balconies, not just in common areas. As of February 17 2021 the bill passed the Virginia House and Senate and, per my conversation with staff of the bill’s sponsor, Delegate Mark Keam, it is now on its way to the Governor’s desk to become Virginia law as of July 1 2021!

This is incredible news for many condo owners/residents who have suffered from the health and environmental hazards of a neighbor who smokes inside their unit or on their balcony. Over the years, I’ve written more about condo smoking bans than any other non-market related topic because of how much interest and positive feedback I received on the topic. So much so that in 2019 I hosted a panel discussion about it.

A full summary of the bill is pasted later, but the key text from the bill includes “…the executive board of a condominium unit owners’ association to establish reasonable rules that restrict smoking in the condominium, including rules that prohibit smoking in the common elements and within units…”

Under current laws, a smoking ban within units can only be done by way of a formal by-law amendment, which can be overly burdensome for most communities and take years to see through. The only “easy” smoking ban allowed by law was a ban in general common areas. Even limited common areas (e.g. balconies) require a by-law change under the current laws.

I am no legal expert and I’m sure the language in the bill can be interpreted a number of different ways, but this bills seems to give condo Boards/owners a very good chance of banning smoking within units. I’d love to hear from any readers who have the legal background to interpret just how likely or unlikely the language in this bill is to allow complete smoking bans.

Here is a link to details about the bill and the full summary below:

Property Owners’ Association Act; Condominium Act; rulemaking authority of property owners’ associations and unit owners’ associations; smoking. Permits (i) except to the extent that the declaration provides otherwise, the board of directors of a property owners’ association to establish reasonable rules that restrict smoking in the development, including (a) rules that prohibit smoking in the common areas and, (b) for developments that include attached private dwelling units, rules that prohibit smoking within such dwelling units, and (ii) except to the extent that the condominium instruments provide otherwise, the executive board of a condominium unit owners’ association to establish reasonable rules that restrict smoking in the condominium, including rules that prohibit smoking in the common elements and within units. The bill clarifies the authority of executive boards of condominium unit owners’ associations to establish, adopt, and enforce rules and regulations with respect to the use of the common elements of the condominium and with respect to such other areas of responsibility assigned to the unit owners’ association by the condominium instruments, except where expressly reserved by the condominium instruments to the unit owners. The bill also permits unit owners, by a majority of votes cast at a meeting of the unit owners’ association, to repeal or amend any rule or regulation adopted by the executive board. This bill is a recommendation of the Virginia Housing Commission. Property Owners’ Association Act; Condominium Act; rulemaking authority of property owners’ associations and unit owners’ associations; smoking. Permits (i) except to the extent that the declaration provides otherwise, the board of directors of a property owners’ association to establish reasonable rules that restrict smoking in the development, including (a) rules that prohibit smoking in the common areas and, (b) for developments that include attached private dwelling units, rules that prohibit smoking within such dwelling units, and (ii) except to the extent that the condominium instruments provide otherwise, the executive board of a condominium unit owners’ association to establish reasonable rules that restrict smoking in the condominium, including rules that prohibit smoking in the common elements and within units. The bill clarifies the authority of executive boards of condominium unit owners’ associations to establish, adopt, and enforce rules and regulations with respect to the use of the common elements of the condominium and with respect to such other areas of responsibility assigned to the unit owners’ association by the condominium instruments, except where expressly reserved by the condominium instruments to the unit owners. The bill also permits unit owners, by a majority of votes cast at a meeting of the unit owners’ association, to repeal or amend any rule or regulation adopted by the executive board. This bill is a recommendation of the Virginia Housing Commission.

State of the Arlington and Northern VA Housing Market

Question: How is the real estate market doing so far this year?

Answer: 2020 ended with a surging single-family and townhouse market, especially further west, from buyers looking for more house and yard space, but a struggling condo market from an unusually high volume of condo inventory for sale and tepid condo demand. So what have we seen in the first six weeks of the 2021 real estate  market?

Single-Family and Townhouse Prices Up

The single-family and townhouse market is appreciating even further above where prices settled in 2020, with more competition (double-digit multiple offers). Through deals I’ve been involved in and conversations with colleagues, my unofficial estimate is that many single-family homes and townhouses are selling for 5-10% more than 2020 prices. I’m seeing this type of appreciation at all different price points too.

Condo Market Better, Slow Improvement Expected

The condo market worsened monthly from about June 2020 – November 2020, but reversed course a bit in December and remained slightly improved in January. I see the condo market picking back up at a slow pace and likely to continue improving through the spring, as demand hopefully/probably picks up, but I don’t see a return to the pre-COVID condo market any time soon.

Let’s take a look at some key charts for Arlington and Northern VA (Fairfax and Loudoun County)…

Arlington Months of Supply

Months of Supply is one of my favorite metrics because it combines supply and demand. The lower the Months of Supply, the more favorable a market is for sellers. Housing economists say that a well-balanced market has about six months of supply.

Single-family homes in Arlington hit an all-time low for Months of Supply in December and January, coming in at just a touch over one month, while the condo market has settled into just under 2.5 months of supply, which is about average for Arlington condos, save the two years after the Amazon HQ2 announcement.

New Listing Volume in Arlington

The number of condos listed for sale in January remained high, coming in 66.7% higher than January 2020. The number of single-family homes listed for sale remained stable, with an increase of just 11.9% over January 2020.

Dramatic Shift in Fairfax and Loudoun

If you think buying a house in Arlington is difficult, just try buying a house in Fairfax or Loudoun County, where single-family Months of Supply has dropped below one month to 2-3 weeks! This represents a much bigger shift in market conditions than what we’ve experienced in Arlington, which has been more competitive for longer.

Northern VA Condo Supply

All three Northern VA counties charted below (Arlington, Fairfax, Loudoun) have seen a spike in condo supply over the last 6+ months, but condo absorption has actually increase by enough in Loudoun County to not only offset the increase supply, but cause Months of Supply to drop to 10+ year lows of two weeks. Arlington County and Fairfax County have gone the other direction, with significantly higher Months of Supply.

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

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.