Don’t Be Fooled By Current Housing Market Conditions

Question: I’ve noticed that the market has slowed down quite a bit the last few months. Do you expect that trend to continue into next year?

Answer: I’d be remiss not to mention the Thanksgiving pie poll results from last week! With 1,043 votes as of last night, ARLnow readers overwhelmingly prefer pumpkin pie (45%) for Thanksgiving, followed by apple (29%), and then pecan (26%). That’s exactly the order I eat my pie on Thanksgiving! Now back to your regularly scheduled programming…

Will The Slow Market Continue into 2024?

Like clockwork, the second half of the year is slower than the first half (except when COVID flipped 2020 upside down) and it gets especially slow in the 4th quarter as focus shifts to holidays, family/friend time, and travel. This period of seasonal slowness consistently succeeds in lulling the market to sleep, resulting in predictions that the prevailing economic/housing headwinds (whatever they may be at the time) will result in a slower/down housing market the following year.

These predictions are consistently wrong and the market usually proves that within the first 2-3 weeks of the new year.

The Data Says Prepare for a Rapid Increase in Demand

The data in the chart below is collected from Arlington sales going back to 2017, sans 2020 data. It shows market performance based on the week that properties go under contract – percentage of properties selling above the original ask, percentage of properties selling at or above the original ask, and the percentage of properties selling with 1-10 days on market (my preferred measure of market speed).

  • The highlight of the chart is how rapidly the market shifts in January, relative to the previous 3-4 months. By the second week of January, the market is moving faster than it has in over four months and by the third week of January, both pricing metrics are higher than they’ve been in roughly six months.
  • Only about 21% of properties that go under contract in the second half of the year are over the asking price, but by the third week of January, 1/3rd of properties sell above the asking price and that price pressure remains in place until summer hits.
  • For buyers in the market, it’s important to also prepare for just how quickly homes will start selling. In the last two months of the year, only 28.5% of homes were going under contract in the first ten days, but that jumps to over 46% by the second week of January and by early/mid February well over 50% of homes sell within the first ten days on market and the pace hovers around 60% through May.

These percentages will vary significantly based on the market conditions of a given year, but the important takeaway is how quickly demand shifts in the new year relative to the end of the prior year. As a reminder, Q4 ’22 to Q1 ’23, a period many predicted would result in a continuation of a slow/down market, delivered us the most significant whiplash effect through a new calendar year we have seen.

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You can see a similar rapid shift in annual market conditions from this chart from Altos Research showing the percentage of properties in Arlington on market that have had a price decrease. The steep drops you see start when the calendar turns to January.

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

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

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

Missing Middle is Not Achieving its Goals

Question: Are you seeing that Missing Middle is achieving its goals for housing supply creation in Arlington?

Answer: What is the goal of Arlington’s Missing Middle aka Expanded Housing Options (EHO) housing policy?

At first, it seemed the County was hoping to provide housing options for “middle income” home buyers. That shifted once it became obvious that any new housing product would be far too expensive for anything resembling middle income. The target became a blend of creating housing that filled a gap in property type(s) missing from the Arlington housing market and adding housing supply.

It also seems that the County hopes that most Missing Middle housing units will be delivered for sale rather than as rental units, because most of the conversation I’ve heard/read from them focuses on ownership opportunity related to Missing Middle, but there is nothing they are doing (likely nothing they can do) to make that a reality, aside from hoping the market delivers ownership opportunities instead of new rentals.

If you’d like a catch-up/review on my previous articles about Missing Middle, you can read my initial thoughts here, followed by more recent thoughts and observations here, which includes some doubt that many of the approved applications will actually get built.

What is Missing from Arlington’s Housing Market?

If you ask me what’s missing from Arlington’s housing market and in high demand, I’d say that it’s townhouse/duplex housing with 3-4 bedrooms with roughly 2,500-3,500 finished square feet and two off-street parking spaces, that suits a family with 1-2 kids. The data, summarized below, also supports this being an undersupplied category of housing. Arlington does not lack multi-family housing (condo or rental apartments), relative to other housing types.

I looked at the last five years of Arlington sales data and analyzed the breakdown of property types sold by bedroom count, total finished square footage, and property type:

  • 45% of homes were multi-family condo and just 19% were townhouse/duplex (most of the 19% were built well over 50 years ago) 
  • Over 50% of homes had 1-2 bedrooms
  • 55% of homes had 1,500 or less finished square feet
  • Only 10% of homes had 2,500-3,500 finished square feet, a range that I think is highly desirable for many buyers/families in Arlington
A pie chart of sales by property type

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A graph of sales by bedroom count

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What Are We Getting from Missing Middle?

Missing Middle provides for seven different options ranging from two-unit duplex/semi-detached properties to six-unit multi-family (apartment-style) properties. In addition to other zoning restrictions that may limit a building’s total envelope, the County set maximum sizes for the combined units in each Missing Middle property by establishing a maximum floor area (basically the sum of all horizontal, non-garage area in a property).

I created the table below using the Missing Middle max floor area limits set by the County for each Missing Middle option and added information on approved Missing Middle projects per the County’s online tracker, as of this writing. It is unlikely that any units delivers through Missing Middle will exceed ~2,600-2,700 and most units will likely offer 1,500 or less finished SqFt (as noted above, this is the size range of over 50% of Arlington’s housing sold in the last five years).

Note #1: The actual finished square footage of units will be less than the max floor area shown in the table below because stairwells, framing, etc will eat into the livable sqft for each unit

Note #2: A builder can choose to allocate the max floor area across each unit however they want. For example, a three-unit townhouse project might allocate 1,800 sqft to the interior unit and 2,850 sqft to the end units.

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The data from the pending applications and 19 approved projects is clear – six-unit multi-family properties are much more desirable for developers than any other Missing Middle option, with over 50% of approved Missing Middle units falling into this category. I shared in my initial thoughts on Missing Middle that I felt the policy did little to incentivize the development of larger units, suitable for families, that are actually lacking in Arlington’s housing supply. The data now supports that concern and to a larger extent than I imagined.

Missing Middle is Missing the Mark

The prevalence and popularity of six-unit multiplexes is, in my opinion, clear proof that Missing Middle is not an effective housing policy based on the County’s stated goals. Six-unit multiplexes will result in the smallest units, with average finished living spaces likely ~1,100-1,200 SqFt or buildings with a couple/few smaller units with 700-800 SqFt and a couple/fewer larger units of 1,300-1,500 SqFt, and will create housing that serves a nearly identical housing demand as existing multi-family condo and rental apartments, which already dominate the Arlington housing supply.

Per Arlington’s 2023 Profile (fantastic, interesting data the County reports on each year) we have added 5,800 housing units over the last five years (nearly all multi-family condo/apartment), totaling just over 121,000 housing units in the County as of 2023. Nearly 87,000 (71.5%) of those are multi-family and about 70% of approved Missing Middle units are 4-6 unit multiplexes (aka multifamily) and will look a lot like those existing housing units. There’s nothing “missing” or “expanded” about that.

Is that worth all the time and resources our County and residents have spent on this policy? Is it worth the negative effect on property value and enjoyment of the neighboring properties who will have six-unit multiplexes built next to them and suffer through up to a dozen extra cars on their street?

The other stated goal of Missing Middle is adding more housing supply to Arlington. You’ll likely hear these six-unit multiplexes promoted as proof that the policy is working because we’ve turned a single-family home into six new housing units for +5 net housing units. Winner Winner, right?

Arlington is offering 58 Missing Middle permits per year for the first five years. If the current application patterns continue (79 units across 19 projects) and the average Missing Middle project delivers four new units, and we max out all 58 permits (doubtful), that will be 232 new units per year and 1,160 units after five years. That’s a measly 20% of the current pace of new non-Missing Middle housing units being delivered to the market and 0.9% of the total housing units Arlington is forecasted to have by 2025.  And again, most of that will be multi-family style units that reflect most of the existing and planned housing units in the county.

If the County wants to expand the housing supply via multi-family housing and not actually help create housing types that we lack and have excess demand for, they’d be much better off strengthening their planning/investment efforts along established transit/commercial corridors where there is a demand for multi-family housing, rather than creating multi-family housing in non-transit focused neighborhoods that are not designed to support multi-family housing and likely do not have sufficient demand for it either.

I Support a Well-Formed Missing Middle Strategy

To be clear, I do believe that Arlington/Arlingtonians would be well-served by expanded housing policy that facilitates the smart development of homes for purchase that fill in existing gaps in our housing supply, as long as it can be done in a way that is a net-positive. Unfortunately, the Missing Middle/Expanded Housing Options policy we currently have does not accomplish that and currently projects to be a net-negative to the community.

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

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

Video summaries of some articles can be found on YouTube on the Eli Residential channel.

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

Class Action Lawsuit Against Realtors

Question: What are your thoughts on the recent class action lawsuit against the National Association of Realtors?

Answer: You’ve probably read headline news over the past week about the Kansas City jury that found the National Association of Realtors and two of the nation’s largest brokerages, HomeServices of America and Keller Williams, guilty of colluding to keep Realtor commissions high via the use of the “clear cooperation” rule, which required there to be an offer of compensation to buyer agents/brokers for properties listed in an MLS.

The lawsuit awarded plaintiffs in Missouri, Kansas, and Illinois damages of $1.78B, which gets automatically “trebled” (tripled) by the court to $5.36B. Numbers that the defendants don’t come remotely close to having in combined cash and/or assets.

If you missed it, here’s a Housing Wire article with a good summary of the lawsuit, without subjective commentary. The lawsuit and others like it (there was a similar lawsuit settled a month ago and another copycat lawsuit recently filed) are a huge deal for the residential real estate industry and consumers.

I’m not going to waste your time making predictions about the legal process this and similar lawsuits will follow, you can google the lawsuit for plenty of opinions. It’s a massively complex issue from a legal and practical standpoint and nobody can honestly say they know where this will lead in the next six months or six years. It could end up at the Supreme Court years from now or it could send shockwaves through the residential real estate industry by next year.

I’m going to share my thoughts on a few of the ideas the lawsuit was built on, some of the more popular opinions I’ve read in the news, and things I find particularly difficult to solve in all of this.

There are reasonable, strong arguments to be made on both sides of most of the issues revolving around this topic. Most of what you’ll read/hear in the media is going to focus on opinions and ideas that are anti-Realtor “Cartel” because it appeals to the masses and generates traffic and eyeballs. I’ll touch on both sides of the argument in some cases, in others I’ll offer my perspective from inside the industry.

This is Mostly About Seller’s Paying Buyer Agent Commissions

Most MLS’s and Associations require(d) there to be an offer of compensation to the buyer agent/broker on a property listed for sale in the MLS; you could not sell something on-market with zero buyer-agent compensation. The lawsuit claims that ~500,000 sellers in MO, IL, and KS included in the class action lawsuit would not have offered/paid this compensation had it not been required and the $1.78B is the amount they “overpaid” in commissions.

The way most market transactions are structured (and have been for 2-3 decades) is that the seller agrees, prior to selling, to pay their broker X% and that amount is usually split evenly between the seller’s broker and the buyer’s broker, which is explicitly stated in the Listing Agreement. For reference, here’s the study I did this year on 2022 buyer-agent commissions in Arlington. There is clearly a “market” price for buy-side commissions.

While required, there is nothing that prevented offers of compensation of $1 or something well below the market, but people (consumers, agents, brokers) rarely chose that option. The plaintiffs in the case were able to make a strong enough case that sellers were forced to offer compensation at market rates and did not know they had a choice.

What if Sellers Stop Paying Buyer Agent/Broker Commission?

This is where it gets interesting and difficult, practically speaking. I could write a few columns on this topic and may do so over time, but I’ll keep it simple here.

Representation on both sides of the transaction is important. Yes, there are plenty of examples of bad representation and consumers who saw little or even negative value in their representation, but for the most part, studies show that buyers and sellers value having independent, professional representation in real estate transactions.

Sellers paying buyer broker commission makes sense and doesn’t make sense all at the same time.

It makes sense because it’s a cost taken out of proceeds for the sale rather than an out-of-pocket expense, so it’s much easier for a seller to receive less than a buyer to pay more. Anybody who has owed taxes understands the significance of how different paying taxes feels when it’s taken out of your paycheck vs cutting a big check to Uncle Sam.

It doesn’t make sense because of the obvious…why should I pay for your representation?

The problem, and I mean problem for consumers not for Realtors because of lost commission, is that if there’s a fundamental change to commission structure and sellers generally stop paying buy-side commission, the result is that most buyers cannot afford to tack on additional closing costs to their transaction and lenders will not allow it to be rolled into the loan (maybe this changes in the future). Wealthier buyers may be able to afford to hire buyer agents, but this scenario all but guarantees an even more difficult path to home ownership for those who can’t afford it.

Is Buyer Representation Important?

So how do we feel about most buyers not being represented in their purchase? Other countries do it, right? I feel strongly that buyer representation is of critical value to most buyers, especially first-time buyers, less financially advantages buyers, buyers who don’t speak English as their first language, etc etc. This is particularly true in the new world of real estate that is critically under-supplied and constantly competitive.

Let me suggest this exercise for anybody who doesn’t mind seeing buyer rep go away…visit 10 Open Houses and consider how many of the hosting agents you’d be comfortable writing a contract with and relying on guidance from to purchase that house within 24-48 hours of seeing it, knowing that they have a fiduciary responsibility to represent the seller. You might feel comfortable with one or two.

It’s also worth noting that “dual agency,” whereby one agent represents buyers and sellers, is illegal in many states, including Maryland. It’s legal in Virginia, but in my opinion, it’s an inappropriate relationship for the majority of transactions because, if done ethically and correctly, neither party gets the type of representation they often want or need.

Home Prices Will Fall if Commissions Drop?

I’ve seen this claim made quite a few times recently; it’s a perfect headline. Buyers across the country are frustrated by high prices, high mortgage rates, and low inventory so let’s suggest a path to cheaper housing if Realtor commissions are reduced. Sounds nice! But that’s not how markets work.

For the most part, prices are set by how much buyers are willing to pay, not how much a seller wants. A seller wants too much? They’ll probably sit on market and be forced to reduce or withdraw. A seller is willing to accept too little? Buyers will show up in crowds and push the price up. Seller expenses do not define market values – supply and demand do.

Scenario #1: Sellers stop paying buyer agents and buyers don’t pick up the tab either. Buyer rep mostly disappears.

If sellers stop paying buy-side commission, effectively cutting their commission cost in half, and buyers aren’t paying for representation either, buyer budgets remain the same, prices don’t fall, and sellers net more. You could even make a case that prices increase because buyers are relying on listing agents who represent the seller to submit and negotiate offers.

Scenario #2: Sellers stop paying buyer agents and buyers start paying for representation.

Buyer budgets shrink to accommodate the cost of buyer rep and because that cost is cash, it likely shrinks budgets by many multiples above the fee being paid to the agent (via reduction in funds available for a down payment), and prices drop as a result. Sure, you can take this scenario are say prices dropped because of the change in commission structure, but it didn’t make buying a home less expensive, maybe even more expensive AND due to the multiplier effect of cash in a real estate transaction, sellers might net less in this scenario too.

Are Commissions Too High?

Overall, yes, there’s plenty of waste in our industry and not enough innovation; we have plenty of room for improvement. But find me an industry or company with tens of billions or more of revenue that doesn’t have waste and inefficiency.

One of the major differences between the Realtor industry and other large multi-billion-dollar industries is that the excess gets spread across well over one million Realtors across the country plus the secondary services that support the industry. For most people involved, these are modest paying full-time and part-time jobs for many people in every community. Realtors, as a whole, do not make as much income as you think. Compare that with other large businesses/industries and I think you’d find that less of our excess/waste floats to the top or to wealthy shareholders but goes towards normal working wage people.

I’m not excusing the excess and want to see progress made there, but I think proper perspective is important.

Was There Collusion to Keep Commission High? Yes and No

One of the lawsuit’s accusations was that agents, who are mostly independent contractors in competition with each other, receive training from brokerage and Association leadership on securing specific commission amounts (6% is the one everybody hears as the “standard”). I do think this is a problem in our industry – training and influence of groups of agents to set a specific price sure does feel like collusion.

There is a fine line between what feels like collusion (training for 6% commissions or any specific number for that matter) and acceptable training for agents to help them maximize their income, but that has to be done without telling agents en masse what that rate should be.

On the other hand, I have a hard time fully buying the collusion argument (aka the Realtor Cartel/Monopoly) when there are endless service and pricing options available to consumers in every market for buyer or seller representation. Redfin carved out a massive market share offering listing services for roughly half of the average sell-side commission and crediting buyers a percentage of the buy-side commission at closing. There are low flat-rate options, listing-entry services, and plenty of agents who charge well above average too. And there’s also nothing preventing somebody from buying or selling without representation of an agent.

Does the industry need to change some of its training practices to ensure Realtors are acting more independently and competitively in determining their rates? Yes, for sure. Is there a monopoly that has cornered the market on commission rates? No, consumers seeking different pricing and services can find it in every market.

Consumers Also Need to Take Responsibility for Their Decisions

I am pretty pro-consumer in my belief system and apply that to this lawsuit with clear eyes (I think), but consumers also have a responsibility to do proper due diligence and make informed decisions in what is likely their largest transaction(s) by many multiples in their lifetime. Heck, I just spent 12 hours researching robot vacuums before making that purchase!  I landed on a Roomba j7+ (on sale, of course), which arrives tomorrow, and I’m very excited.

I bet many of the same sellers who were part of the class action spend months shopping for a car, scrutinizing dealership fees, and negotiating. Some of them probably spend Sunday mornings clipping coupons and driving to different grocery stores to get the best deals. Was that same energy given to the sale of their home?

Sellers have every opportunity to read the contract, ask questions, and meet with different Realtors prior to selling a home so in that respect, this lawsuit doesn’t make a whole lot of sense to me.

And the Result Will Be…

Nobody knows. Personally, I think the media and pundits are getting carried away with how much of a shockwave this is going to create in the real estate industry. It will surely lead to change, but class-action lawsuits are more about money and a couple of class-action lawsuits don’t help answer the deep, complex issues that need to be reckoned with to create a more efficient, balanced industry that supports homeownership across all classes and demographics. It’s quite possible that these lawsuits lead to massive structural changes in the industry in the name of consumers and we end up with a landscape that is a net negative for consumers. We shall see…

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

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

Video summaries of some articles can be found on YouTube on the Eli Residential channel.

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

Poll: Why Do you Own a Home (or want to own)?

What is Your Why?

Any way you slice it these days, it’s tough to be a buyer. Your selection of homes available for sale is lower than usual because so few homes are being listed for sale and mortgage rates are the highest they’ve been since ~2000, but prices (and competition) remain high, and are unlikely to fall because of tight supply.

Most of the conversation around the advantages of home ownership focus on the financial benefits – wealth/equity accumulation, appreciation, tax incentives, etc but those financial incentives have weakened over the last 12-14 months for many buyers but there are plenty of non-financial reasons people have for wanting to own their home like stability, greater choice, control over your environment, and fulfilling personal goals.


What is the primary reason you own or want to own a home?

Participate in the poll at ARLnow.

Non-Financial Considerations

The conversation around homeownership vs renting must include the financial pros and cons, but too often the non-financial reasons don’t get enough attention. For example, I often find that people in a transitional period in their lives do not properly value the flexibility of renting. That flexibility can even turn into a financial benefit as well.

On the flip side, I rarely hear people factor in the importance of being able to control their own environment when they’re weighing homeownership. You are a product of your environment and being able to invest in the improvements and maintenance that are important to you can have a significant effect on your day-to-day happiness and well-being.

If I missed your primary reason for home ownership in the poll, please add yours to the comment section.

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

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

Video summaries of some articles can be found on YouTube on the Eli Residential channel.

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

Rent vs Buy: Data to Aid Your Decision

Question: How have rental prices and purchase prices changed in relation to each other over the last few years?

Answer: This is not going to be a column about whether you should rent or buy, there are plenty of those. Rather, I’m offering a data comparison of how rental and purchase prices and demand metrics in Arlington have changed in relation to each other since 2018.

We all know that both have gotten mind-numbingly expensive over the last few years, but there’s not really a third option (aside from crashing with Mom and Dad) so everybody is faced with the same decision of whether it’s a better decision/value proposition for them to rent or buy – hopefully this column helps with that decision.

Note: the rental data used below is limited to what is in the MLS, which is a limited data set of the Arlington rental market but it is more than enough data to allow us to capture an accurate reading of the rental market

Buy a Condo, Rent a House?

Since 2018, the average price of a single-family home has gone up by significantly more (+28.3%) than the average cost of renting a house (+20.7%) in Arlington (note: this does not take mortgage rates into consideration) whereas the average cost of renting a condo (+12.9%) has gone up much more than the average cost of buying a condo (+8%) during that time.

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Another way of looking at the price relationship between sale prices and rental rates is to look at the multiple of the average cost to buy compared to the average cost of a 12-month rental. Using the table below, we learn that condo prices are the cheapest they’ve been since 2018 relative to the cost of renting, which may very well be due to high mortgage rates pushing more demand towards renting and away from buying condos.

We can see a modest decrease this year in the cost of buying a house relative to renting, after five straight years of that multiple increasing. This is also likely due to mortgage rates shifting more demand than usual towards renting.

The other key takeaway from the table below is just how much more it costs to buy a single-family home relative to renting one in comparison to buying vs renting a condo.

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Renting Ain’t Easy

Unfortunately for those fed up with purchase prices, high mortgage rates, and low inventory for purchase, deciding to rent isn’t exactly an easy way out. Not only have rents increased significantly since 2021 — by 10.5% for single-family homes and 15.1% for condos (yes, it’s higher than the increase since 2018 because rents fell in 2020 and 2021) – but the rental market has gotten much more competitive in that time with properties renting more than twice as fast as they did in 2019 and about six times faster than they did in 2018!

The demand metrics below show just how competitive the rental market has gotten over the last two years, because of higher prices and mortgage rates pushing more demand towards rentals. For reference, depending on the season and type of property, about 40-60% of homes for sale go under contract within seven days and usually sell for 99-101% of the original asking price.

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How to Use this Data to Decide on Buying vs Renting

The data in the first section suggests that the smart financial decision is to buy a condo and rent a house, right? No, not really. This data isn’t meant to answer your buy vs rent question, rather it can be a helpful input amongst the many other considerations that factor into which decision is right for you/your family.

For example, you may walk away from this column feeling that renting a house is a better financial decision, but the reality of renting a single-family may not actually work for you – it’s harder to find what you want from a rental, you give up a lot of control over the home’s maintenance and condition, you may not be able to live there as long as you’d like, etc.

Condos (and apartments) are a different story though, you have significantly more options from individually owned condos to commercially managed apartment buildings and there a fewer maintenance and condition issues that might negatively affect your day-to-day living and enjoyment of the property.

At the end of the day, the decision to rent or buy should include a wide range of factors and be based on your individual situation, not the opinion of one or two people in the business of making content or who financially benefit from your decision. I do think that a mistake many people make is that once they’ve owned a home, they never consider renting as an option again. I think that for every move you need/want to make, you should give serious consideration to both renting and buying, allowing yourself to revisit assumptions you’ve made, challenge your reasoning, and consider current market conditions.

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

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

Video summaries of some articles can be found on YouTube on the Eli Residential channel.

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

Missing Middle Thoughts and Observations

Question: In the six months since Arlington passed Missing Middle, what have you seen and what do you think of it?

Answer: It’s been about six months since Arlington passed the Expanded Housing Options (EHO) aka Missing Middle (MM) zoning changes, allowing the construction of 2-6 unit properties on lots that were previously zoned exclusively for single-family homes. There has been much excitement and angst about it changing the fabric of our community, but it seems to me that the outcome will be much milder than many people expect. Unfortunately (or not?), it seems like it won’t go far enough to make the proponents happy but goes far enough to make the opponents angry.

For those who want more of an introduction to Missing Middle, you can read my initial thoughts on MM from March. This week, I’ll share an assortment of thoughts and observations I’ve gathered over the last few months while I try to better understand what MM means for Arlington. I’ll caveat the entire column saying that MM is all very new, very much undeveloped, and we probably won’t understand where and how it will be most utilized for another 4-5 years.

Don’t Expect Floodgates to Open

More than a dozen Missing Middle applications were submitted during the first week the County opened applications (on July 1), but according to Arlington’s application tracker, there are currently 22 applications submitted and under review and 5 applications approved. I consider this to be a modest pace of applications, suggesting there’s not a huge appetite yet to build Missing Middle. I’ve run at least a dozen scenarios with builders and architects and have mostly found that the numbers don’t make sense or that the margins are too tight to justify given the risk of the unknowns (outsale prices/demand, permits, lawsuit, etc). 

Initially, I expected MM to add significant value to many older, smaller Arlington homes right away and cause a bit of a frenzy in the marketplace. The limitations of the new zoning code coupled with uncertainties about market demand for MM products and the County’s permit process seem to have kept, from my observations, developers and investors from paying a premium for tear-down homes intended for Missing Middle development (the pending lawsuit is also a significant factor).

Based on my conversations, it seems that the approach many are taking is to apply a similar valuation to an acquisition as they would for single-family development so there’s a safe exit if the Missing Middle project doesn’t work out or the lawsuit prevents further development. Each investor will evaluate potential MM deals differently, but it seems unlikely, for now, that we’ll see a frenzy of buying at a premium over previous tear-down valuations. There will of course be exceptions for certain lots that set-up perfectly for MM.

Applications Don’t Mean Much

So far, all we’ve seen are applications for Missing Middle construction not actual construction, but it’s important to understand that applications, even the five approved applications, are a small first step towards delivering a Missing Middle project. The County does not charge an application fee and the requirements for an application are simple:

  • Floor plans 
  • Building elevations 
  • Existing property plat and building location survey 
  • Proposed property plat and building location survey 
  • Landscaping and/or tree preservation plans

I think that many approved applications won’t get any further, especially after going through Arlington’s ever-changing Land Disturbance Activity (LDA) and Stormwater requirements (this comes after the MM application gets approved), which adds a lot of cost and complexity to construction projects in Arlington and hamper profitability.

I also wouldn’t be surprised if a lot of the owners are hoping to sell their home with an approved Missing Middle application and set of plans, but don’t intend on actually building it themselves. That means they may not have done a true cost/profit analysis to determine if MM is financially viable or more profitable that a single-family development, so they might not get built.

One question I have for the County is that, given the limits on the number of applications they’ll allow each year, how will they clean out the application pool of applicants who decide not to build, sit on their application, or get stuck in the application process?

Large Lots, Largely Untouched

Of the 27 properties listed on the County’s application review tracker (as of this writing), none are located in R-8, R-10, or R-20 zones, which are home to most of the larger lots (“large” is relative) in the County and mostly located north of Langston Blvd. Note: the higher the number after the “R” generally the larger the lots are in that area/neighborhood.

I think this is mostly because the County, intentionally or not, made MM development unappealing for developers, compared to building single-family homes, on large lots by limiting number of townhouses that can be built to three modestly sized units. A developer must go with a multi-family/apartment-style product if they want to build more than three units and it’s hard to imagine demand being too strong for mid-sized condos without amenities, that are located away from the commercial/Metro corridors, where most of these larger lots are located.

I believe this trend will hold unless changes are made to allow 4+ townhouses to be built on a lot or there’s a significant increase in how large the building envelope (gross floor area) can be for developments on larger lots.

Creative Opportunities for Aging in Place, Families, Singles

One of the ways I can see Missing Middle being utilized is allowing homeowners to partner with a builder on the redevelopment of their property to create multiple units, one or two of which would be designed to their own specificationsn/eeds, with the cost of their new unit being reduced through the sale of the other units. For example:

  • Aging in Place: a homeowner who requires care could build themselves a first-floor condo and a separate studio for a caretaker, then sell the other units
  • Families: a family might build out the entire top floor for themselves, buildout a separate unit for their parents (a truly separate and self-sufficient in-law suite), and sell the rest
  • Savvy Singles: a savvy single might build a small 1BR or studio for themselves to maximize the value and size of the rest of the units to earn themselves a free or very inexpensive home

Classic Cottages Leading the Way

Classic Cottages, a well-recognized custom homebuilder in Arlington (and surrounding Northern VA communities) seems to be taking the lead in Missing Middle development projects, with a handful of applications in across the County. They will likely be one of the first to give us a glimpse of what early Missing Middle will be, and can be.

None of their projects will be rentals, a fear many Arlingtonians have that neighborhoods will fill up with small rental buildings, and they intend to build to a similar design aesthetic and quality standard as they do in their $2M+ homes. They’re one of many local builders who will likely dabble in Missing Middle construction who don’t want to spoil their custom-home brand by building a weak product that reflects poorly on them. 

I think we’ll see a high-quality product that is meant for sale, not rental, from most other developers too. The Arlington consumer rewards builders with high price premiums for higher-end construction, so the margins and incentives exist to deliver quality. I’m also convinced that in most cases, the cost of acquisition and construction are too high for rentals to pencil out and most MM construction will be sold to homeowners, not investors.

Lawsuit Won’t Change the Long-Term Path

The current lawsuit filed against the County may slow down the implementation of Missing Middle, but I see that as only a short-term victory for MM opponents, not something that will prevent upzoning from being established to Arlington in the long-run. Variations of Missing Middle are picking up momentum all over the region (City of Alexandria, Fairfax Co, Montgomery Co) and increased zoning flexibility seems to be the only way to feed a starving housing market. Even if the lawsuit is successful, it should only be bump in the road to more housing density.

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

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

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

What is the MLS and Bright MLS?

Question: I often hear people reference the MLS or Bright when referring to properties for sale. Can you explain what these are?

Answer: If you’re buying or selling a home anywhere in the US, you may hear the term “MLS” and if you’re buying in the Mid-Atlantic “Bright” used a lot. The simplest way I describe it to people is that the MLS, short for Multiple Listing Service, is the real estate industry’s database(s) of record for property sales. There are hundreds of regional and local MLS’s across the country that act as the aggregator of properties for sale/rent.

Bright (MLS) is the name of our regional MLS and, with just over 110,000 participating agents, it is the second largest MLS in the country behind the California Regional MLS. Prior to 2017 it was called MRIS (Metropolitan Regional Information Systems), but in 2017 it was rebranded to Bright after a merger with 8 other regional MLS’s mostly from PA, NJ, and DE.

The map below shows the current Bright MLS footprint, meaning brokerages/agents in all of these areas input their listings into the same platform. It covers 40,000 square miles and 20M people.

Our Reach Map

What is the MLS (Multiple Listing Service)?
The MLS is a real estate information exchange platform and database created by cooperating residential real estate brokerages to improve the efficiency of their real estate market.  As a privately created and managed organization, each MLS is primarily funded through the dues of the brokerages and agents within the market it serves. There are hundreds of MLS’s across the country and each operates under its own direction and rules & regulations.

The information you find on consumer-facing websites like Zillow comes from various MLS’s and each MLS has the right to negotiate its own relationship (syndication agreements) with these sites and determine what information is made available.

Without the MLS concept, we would have an extremely fragmented industry that would make it difficult for buyers to ensure they are seeing most/all of what is for sale within their sub-market and it would be much more difficult for sellers to get top dollar because they would not have access to the entire buyer market.

What is Bright MLS?
Bright is the MLS that serves the mid-atlantic region including all of, or most major markets in, Virginia, Washington DC, Maryland, Pennsylvania, New Jersey, West Virginia, and Delaware.
The Executive Committee and Board of Directors is made up of representatives from the region’s major brokerages and directs the business of Bright, which has developed into a full-blown software, services, and technology company. Bright has adopted a strict set of rules & regulations to provide data uniformity and ensure fair play such as restrictions on marketing properties for sale that are not entered into the MLS, as discussed in this article.

MLS is a Net Benefit to Consumers and Agents
Your interaction with Bright MLS is likely to come from listings that your real estate agent sends you directly from the system, but you are also indirectly interacting with Bright whenever you search a 3rd party real estate site like Zillow because their data is pulled from Bright (and other MLS systems across the country).

While at time frustrating for brokerages, agents, and consumers (personally, I think there’s so much more they can do with data and their consumer-facing tech), the MLS structure is a tremendous net benefit for the industry and consumers by combining home sale data into one database with a common set of requirements and rules of engagement. This allows the entire industry to function more efficiently than it did prior to the MLS concept, which has led to lower commission fees.

The biggest example for consumers (and I’d also argue to Realtors) is that since Zillow and other consumer-facing sites began aggregating listing information for public use, real estate agents are no longer the “gate-keepers” of listing information and consumers have direct access to practically everything that is on the market (entered in an MLS) in nearly real-time.
If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at

If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to To read any of my older posts, visit the blog section of my website at Call me directly at (703) 539-2529. Video summaries of some articles can be found on YouTube on the Eli Residential channel.

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

Predicting the Upcoming 2023 Real Estate Market

Question: Can you provide any additional data on what the market will do for the remainder of the year?
Answer: If you have enjoyed my real estate columns over the years, I would greatly appreciate your vote for Arlington Magazine’s Best Of Arlington, Real Estate Agent (in the Home section) and encourage you to support all of your favorite Arlington businesses with a meaningful vote!
Last week I published an article highlighting that the second half of the year is easier on buyers than the first half. This week we can explore some other predictable market trends to help buyers and sellers anticipate the upcoming market.
New Listings to Spike in Two Weeks, Then Fall SharplyThere will be a predictable spike in new listings after Labor Day, proceeded by a rapid decline through the end of the year.

  • Just 17% of total annual listing volume comes to market in Q4, with less than 7% of total listing volume over the last two months of the year
  • 46% of homes are listed for sale during 1/3 of the year from early March to late June
  • The market goes on summer break with everybody else from late June through August
  • Note: this chart is for Arlington but the same trends can be applied across the region
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Our Q4 Lows Will be REALLY LowBroken record time…we are experiencing historically low listing volume with sales down 25% from the historical average across the DC Metro. Total listing volume in Q2 (when we have the most inventory come to market) was on par with Q4 volume in previous years (least amount of inventory) so we will likely see just a trickle of homes hitting the market in Q4 this year.

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Buyer Activity/Demand Will Also Jump Soon, Then Fall Around HolidaysAlong with a pop in listing volume after Labor Day, there’s usually a coinciding jump in buyer showing and contract activity that lasts through mid/late October before nose-diving in November.

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But Sellers Will Continue to Reduce Asking PricesCourtesy of Altos Research, the chart below highlights the annual cycle of the percentage of homes reducing the asking price. The diamond and circular markers represent Aug 13 of each year and show that we are just past the halfway point of a sharply increasing number of price reductions through the end of the year as sellers fight to attract buyers before the holidays.

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If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at
If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to To read any of my older posts, visit the blog section of my website at Call me directly at (703) 539-2529. Video summaries of some articles can be found on YouTube on the Eli Residential channel.
Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH @properties, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.

Will New Homes Prices in Arlington Drop Due to Toll Brothers Project?

Question: What impact will the new Toll Brothers community have on the Arlington housing market?

Answer: If you have enjoyed my real estate columns over the years, I would greatly appreciate your vote for Arlington Magazine’s Best Of Arlington, Real Estate Agent (in the Home section) and encourage you to support all of your favorite Arlington businesses with a meaningful vote!

Toll Brothers will open sales of 40 new single-family homes at The Grove at Dominion Hills very soon (projected by this fall) starting in the $1.9Ms (really $2M) and I suspect most of the homes will have a final price tag of $2.1M-$2.3M.

All 40 homes will not be available at once, rather they’ll be released in phases based on the pace of sales, but the addition of these homes to the market will have a significant impact on the supply of new construction homes in Arlington and I expect will put downward pressure on the price of new builds under ~$2.6M.

The Grove Will Be a Big Percentage of New Construction Supply

Arlington has averaged just over 95 new homes sold per year since 2018 (per MLS, which includes most but not all new homes sold) so even if it takes two years for Toll Brothers to release all 40 home sites, those homes will represent a significant percent increase in the supply of new homes in Arlington.

If you look at the sales of comparably priced homes ($2M-$2.4M), The Grove will bring an increase of 60-70% more new builds to market over the next 18-24 months (assuming that’s the timeframe they release all 40 home sites within).

Most new homes in Arlington are located in the 22207 zip code, with 52% of new home sales (275 of 524) since 2018. The Grove is in the 22205 zip code and while it’s just 1.5 miles from 22207 and 22205 also commands premium pricing and shares many of the same characteristics as the 22207 zip code, there’s no data to support whether or not the 22205 market is prepared to absorb 40 new homes at this price point. Of the 73 new homes sold in 22205 since 2018, just seven have closed at or above $2.1M – one more is under contract and three are for sale.

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And New Homes Are Already in a Softer Sub-Market

Adding that kind of supply to any market is bound to put downward pressure on prices, but I have no doubt that the market would happily gobble up dozens of 2,500-4,000 SqFt homes in the $1M-$1.5M+ range. However when you get into the 5,000+ SqFt market (I imagine most of the 40 homes will finish with 4,500-5,000+ SqFt) and in the $2M-$2.5M range, you enter into that is already pretty well balance between buyers and sellers, softer than the rest of the housing market, without the inventory from The Grove.

The first chart, courtesy of Altos Research, shows the percentage of homes with a price reduction in the “upper” price range of the Arlington single-family home market, which The Grove community will fall within. Notice the upward trend of price reductions this year highlighted by ~30% of homes reducing price this spring compared to previous spring markets with just 20-25% of homes with a price reduction.

I have seen this play out anecdotally as well with more new builds reducing the asking price or accepting larger discounts from ask than in years past. I would expect this trend to continue as the market adjusts to the Toll Brothers inventory rolling in later this year and in 2024-25

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The Months of Supply (MoS) chart below, a good measure of supply and demand where higher MoS suggests a market more favorable for buyers, shows us that the market for homes with 5,000+ SqFt is very much in balance between buyers and sellers, with about six Months of Supply. Most housing economists say that six MoS is a balanced market, below six favors sellers, and above six favors buyers. For comparison, the overall Arlington market measured 1.4 MoS in Q2 2023.

So this chart tells us that unless demand picks up sharply for large homes, the extra supply added by Toll Brothers will likely push this sub-market (~5,000+ SqFt) into a buyer’s market.

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Local/Smaller Builders Will Bear the Burden

Most likely, none of this will matter to Toll Brothers and it will be a problem for their competition (everybody else building in Arlington) to bear. Toll Brothers can afford to wait for premium buyers longer than smaller builders can, Toll Brothers has an exceptionally efficient and proficient sales machine including full-time sales staff, model homes, and a nationally recognized brand, and Toll Brothers can offer incentives smaller builders can’t compete with, most notably through the Toll Brothers mortgage company.

If I was a builder in Arlington, I would be careful over the next couple of years on projects in the $2M-$2.5M range with tight margins.

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

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

Video summaries of some articles can be found on YouTube on the Eli Residential channel.

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

Interest-Only Mortgage May Help Some Solve Mortgage Payment Issues

Question: Do you have any recommendations for ways to reduce the burden of high interest rates?

Answer: Hearing somebody suggest an interest-only mortgage may initially sound like a gimmick and bad financial advice, but for some buyers, an interest-only mortgage might be a great option to responsibly purchase more house within budget, with more control over your payments.

I was recently discussing mortgage options for a client with Skip Clasper of Citizens Bank ( and he brought up their interest-only mortgage product so I thought I’d share it here in case it can help anybody else. Most banks attach a higher interest rate to their interest-only product, but Citizens Bank does not (currently).

Standard Mortgage vs Interest-Only

A traditional mortgage is designed so that every payment is a combination of interest and principal, so that the loan is fully paid off after 30 years if you make the same minimum monthly payment each month. In the early part of the loan, most of your payment goes towards interest.

An interest-only mortgage is a loan that does not include any payment towards principal with each minimum monthly payment and thus lowers the amount you pay each month. Any money you pay over your minimum monthly payment goes directly towards principal and you can choose when and how much to make those extra payments. Note that in a standard mortgage, you can also pay additional money towards principal at any time, but you must make the minimum payment, which includes interest and principal.

The difference in payments between the two products isn’t massive because so much of your initial payments on a traditional mortgage are interest, but you can see from the table below that the difference in payments is enough to move most buyers into a new pricing tier (better/bigger home) or to become more competitive in the price tier you’re in (better chance of offer being selected). The table below doesn’t contain a $500k loan amount because the interest rates on lower loan limits are usually too high to justify.

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Who Should Consider an Interest-Only Loan

There are a handful of buyer profiles that I think should consider an interest-only mortgage to give themselves more spending power and/or more control of their loan payments:

  • Professionals with high bonus/commission compensation structures like attorneys, partners/executives, salespeople, and business owners. The key is making sure that you are allocating money from these windfall bonus/commission payments towards paying down your principal, but it helps keep your cashflow more manageable during the months where you have less or no income.
  • Homeowners who have high short/mid-term expenses like childcare. A family with two young kids in childcare may be paying $4,000+ per month and for most families, that cost will go away within a couple/few years. Once those costs drop off your budget, that money can be redirected into paying down the principal, if you haven’t yet been able to refinance into a lower interest payment.
  • Buyers where a new job or promotion is highly likely within a few years that will cause your income to increase enough that can start paying down the principal and make up for lower, interest-only payments early on. A good example of this is a couple where one person works and the other is in grad/medical school.
  • Buying a “forever home” and you’re finding yourself coming up a short on the budget you need to get into the right home and you don’t want the difficulty of managing higher payments in the first 2-3 years to prevent you from buying what you need for the next 20-30 years. There must be a reliable way for you to be able to be able to start paying down the principal (and catching yourself up) after a few years.

Waiting for Interest Rates to Drop to Refinance

A lot of buyers in today’s market are taking on higher mortgage payments than they can’t afford long-term and counting on interest rates to drop in a year or two so that they can refinance. While the odds are good that there will be a refi opportunity in the next 12-24 months, it’s far from certain and if you can’t sustain your minimum required payment on a traditional mortgage for more than 12-24 months, you’ve got a problem.

For buyers who are willing to take a gamble on a refi, an interest-only loan may be a safer way to wait for rates to drop because if it takes longer than expected, you have more control over how you pay down your mortgage prior to rates dropping enough for a refi.

Fiscal Responsibility is Key

The key to using an interest-only loan is to use it responsibly and have a solid plan in place to make payments towards principal rather than waking up 8-10 years into your loan payments with little to no dent in your loan balance (principal). If you do not trust yourself to do this, don’t even consider taking on an interest-only mortgage.

Qualifying is More Difficult

Interest-only mortgages are a riskier product for banks, so the lending standards are higher than a traditional loan. For most banks, you must qualify based on a 20yr amortization payment scheduled instead of a 30yr, meaning your debt-to-income ratio must be a lot stronger. Most banks also require you to have a significant amount of reserves after closing (retirement funds can usually be applied) and you need at least 20%-25% down.

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

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

Video summaries of some articles can be found on YouTube on the Eli Residential channel.

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