Single Family Home

2023 Mid-Year Single-Family Home Market Review (Arlington)

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2023 Mid-Year Single-Family Home Market Review (Arlington)

Question: How was the market for single-family homes in Arlington during the first half of the year?

Answer: All it took was 7% interest rates to stabilize prices…which is exactly what the Fed’s goal was and the Arlington single-family home market is a great example of it working. Coming into the year, there were signs that prices would fall in 2023 if rates remained high, but due to a historic supply squeeze, prices remained stable despite a significant drop in demand (the drop is supply was more significant than the drop in demand).

The data below is based on sales of single-family homes in Arlington during the first six months of the past five years.

Competition Eases, Prices Stabilize

The Arlington single-family market will always be competitive, but the intensity of the last two years has softened and brought some stability to prices:

  • The average home price increased by 2.3% to over $1,360,000 and the median price increased by 1.7% to $1,220,000. If you remove new construction sales from the data, the average sale price actual decreased by .6% to just over $1,241,000.
  • Over the past five years, the average home price in Arlington has increased by nearly 27%
  • On average, homes are selling for just over their original asking price in 2023
  • 14% of homes sold in the first half of 2023 sold for $2M+ and only 32% sold for $1M or less
  • If you remove 2020 sales numbers (COVID lockdown), there were 26% fewer sales in the first half of 2023 than the 5yr average. That is almost exclusively due to low supply, not low demand.
  • 68% of sales in 2023 were at or above the asking price, less than 2021 and 2022 but just above 2019 and 2020
  • 64% of homes sold within 10 days on the market, last year it was 74%
  • Homes that went under contract within one week on market sold for an average of 3.9% over the asking price, in 2022 the average was 6.8% and in 2019 it was 2%
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Zip Code Prices All Over the Place

There was no consistency in average price change across Arlington zip codes:

  • Note: 22213 only has 8 sales in 2023 so the data isn’t very reliable, I considered not including it
  • 22201 led the way with an 8.9% year-over-year increase
  • After massive growth in 2021 and 2022, the 22205 zip code had the worst performance, down 8.5% from last year. However, this is not a reflection of actual home values dropping in 22205 by that much, but mostly the make-up of the data set
  • 22204, the zip code I now call home, remains the only zip code for a third year in a row with an average home price below $1M
  • 22207, the best bellwether for Arlington single-family market conditions, continued its steady appreciation clocking in at 4.2% over 2022 to an average of $1,609,000. Without new construction sales, the average price increased by 1.8% to $1,455,000.
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Looking Forward

There is no relief in sight for interest rates, with many rates returning to the 7%+ mark as of last week. Expect a noticeably less competitive, more balanced real estate market in the second half of the year. Buyers will have a better chance at finding value and sellers should level expectations.

The big question is when will rates come down (many expect to see 4-5% in the next 12-18 months) and what will that do to prices. If inventory remains low, which it’s likely to do for years to come, I think that we’ll see another surge in demand and prices when rates break through 5.5-6%. If that coincides with Q1/Q2 of 2024, expect that surge to be amplified. Until then, I expect prices to remain relatively flat with competition light to moderate, depending on the season.

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

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

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

2022 Arlington Single-Family Housing Review

reallivingathomeblog Arlington, Buyer, Home Owner, Seller , , 0 Comment
2022 Arlington Single-Family Housing Review

Question: How did the Arlington single-family housing market perform in 2022?

Answer: The 2022 housing market came in like a lion and left like a lamb. The way things were reported in the news, one may be led to believe the 2nd half of the year was a disaster, with home values crashing because of higher interest rates, falling stock portfolios, the Ukrainian war, and buyer fatigue. 

The truth, at least locally, is that the aggregate of the first half/second half, yin and yang housing market was still marked by strong price growth across all single-family sub-markets (I’ll analyze the condo market next week).

Strong, Stable Growth Continues for Arlington Single-Family Homes (SFH)

Like a blue-chip stock, the Arlington housing market is reliably strong and stable. We didn’t experience the double-digit annual appreciation of other national housing markets from ’20-’22 but we also benefitted by excellent growth prior to the pandemic buying craze (Amazon HQ2 and overall strong local market conditions). You can also count on the likelihood of stable growth to continue even if other markets struggle as they transition out of their reliance on pandemic-buying and ultra-low interest rates.

  • The average and median price of a SFH in Arlington increase 4.4% and 7%, respectively
  • Over the last five years, the average and median price of a SFH in Arlington increased by 25.3% and 29.1%, respectively
  • The average buyer paid 1.9% over asking to purchase a home in 2022
  • Homes that sold within ten days of being listed sold for an average 5% over asking and 57% of homes sold in 2022 were sold within ten days
  • Low supply was a big driver in keeping prices elevated despite difficult second half market conditions. There were 30% fewer SFHs sold in 2022 than in 2021.
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22205, 22201 Zip Codes Lead Growth

If we drill down into performance by zip code (note: 22206 and 22209 don’t have enough SFH sales to be included), we find some really good insights:

  • 22204 is the only remaining zip code with an average price below $1M. It was only 2017 that the entire County’s average price was below $1M.
  • 22201 extended its lead as the most expensive zip code to purchase a SFH, costing an average of over $100k more than the next most expensive zip code, 22213, and finishing the year with an average price of nearly $1.6M
  • 22201 and 22205 experienced the most appreciation, with YoY increases of 9.3% and 8.2%, respecively. The next highest zip code, 22203, grew by 4.9%.
  • 22205 was the most competitive/frustrating for buyers, with the average home selling for 4% over ask
  • Over the last five years, the 22202 zip code (area surrounding HQ2) has, unsurprisingly, benefited from the highest appreciation at 33.8% growth since 2018 due to the Amazon HQ2 boost followed by the pandemic buying craze
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New Construction: Bigger Homes, Bigger Prices

New builds have outpaced the appreciation of the rest of Arlington over the past two years, gaining 21% since 2020. New homes are also bigger than they’ve ever been with the average home claiming over 5,100 SqFt of finished living space, nearly six bedrooms, and more than five full bathrooms. Buyers are now paying almost $400,000 per bedrooms to own a new home.

You may notice the sharp drop-off in the number of new homes sold in 2022. This drop does not align with County data for new construction starts/completions and I think is more representative of the number of homeowners building outside of what’s being offered on the market – demolishing a home they already live in, acquiring their own lot and hiring a builder, or securing a lot/build with a preferred builder prior to it being marketed for sale.

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Price and Bedroom/Bathroom Distribution (for my Missing Middle friends!)

The biggest change in price distribution in Arlington has been at the ends of the spectrum, with the percentage of homes seller for under $800k dropping from 35% in 2018 to 11% in 2022. On the other end of the spectrum, the percentage of homes selling for $2M+ has increased from 3% in 2018 to 11% in 2022.

Most sales in Arlington fell between $800k and $1.2M. The median household income in Arlington is about $128,000 which at current interest rates, limited personal debt, and a 20% down payment qualifies for a roughly $900k purchase. If rates drop to 5%, the median income qualifies for roughly $1M.

Nearly 2/3 of SFHs sold in 2022 had three or four bedrooms, most of which had at least two full bathrooms, and the price of those homes averaged $940,500 and $1,155,000, respectively.

If we add townhomes and duplexes to this data, we’ll see an even higher concentration in the 3-4BR range and lower average prices, so we see here that the term “Missing Middle” is a bit of a misnomer…it’s not missing and the average costs generally align with median household income, but the supply simply of “middle” housing isn’t as high as County leadership and MM proponents would like it to be. I also expect that most Missing Middle housing built would be more expensive than the current average prices for 3-4BR homes, certainly when comparing existing “middle” housing and new Missing Middle housing in the same location.

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*Note: this table displays the most common BR/BA combinations, but does not show all sales

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

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

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

2022 Arlington Mid-Year Single-Family Home Review

reallivingathomeblog Arlington, Home Owner , , , , , , 0 Comment
2022 Arlington Mid-Year Single-Family Home Review

Question: How did the Arlington single-family home market perform in the first half of 2022?

Answer: We have reached two years of the average single-family home (SFH) in Arlington selling for over the asking price, but like the rest of the economy, things are finally cooling down. However, the “cool-down” data won’t start showing up for another month or two and the data you’ll see here, a review of the first half of 2022, reflects what was mostly a red-hot market.

More Competitive, Less Price Growth?

By nearly all measures, the first half of 2022 was more competitive than the first half of 2021, yet we got lower average and median price growth in ’22 than in ’21, compared to the first half of the year prior.

The competition in the first half of 2022 was unlike anything we’ve seen in Arlington before with the average SFH selling for 4.2% more than the asking price, compared to an average of 1.8% over ask in the first half of 2021. In 2022, an insane 79% of homes sold within the first 10 days on market, compared to 70% in 2021 and 73% of homes sold at or above asking price in 2022, compared to 66% in 2021.

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With such intense demand, one would expect to see higher price growth in 2022 than in 2021, but that’s not the case. The average and median price change in the first half of 2022 was 7.1% and 5.6%, respectively, compared to the first half of 2021. From 2020 to 2021, the average and median price change was 9.6% and 16.6%, respectively.

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I think the reason for conflicting demand and appreciation data is two-fold. First, the 2021 appreciation is based on the first half of 2020, which included the first few months of COVID lockdowns when the market basically froze, so those prices may have been somewhat artificially deflated. However, the counter argument to that is comparing the first half 2020 prices to 2019 prices, we got a healthy 5% appreciation in average price.

The second reason, and this is just a theory, is that by 2022 the market (sellers and listing agents) knew that buyers were accustomed to paying significantly over the asking price and thus set more conservative (lower) asking prices to ensure competition instead of setting prices that were more reflective of actual/likely market values. Doing so would artificially inflate some demand measures without causing a coinciding explosion in prices.

Since the beginning of the pandemic in the first half of 2020, the market has experienced the following:

  • Median price increased by $225,000 or 23%
  • Average price increased $197,000 or 17.5%
  • Average seller credit (towards buyer closing costs) decreased by 75%
  • The number of homes sold for $2M+ increased from 5% to 11% of total sales
  • The number of homes sold for under $1M decreased from 53% to 31% of total sales

22205 Leads Growth, 22201 Still Most Expensive

The 22201 and 22207 zip codes remain significantly more expensive than other Arlington zip codes as the only two with an average price higher than the county-wide average. The 22205 zip code has benefitted from tremendous growth over the past five years and led the way in the first half of 2022 price growth, adding 12.7% to its 2021 first half average.

After gaining 19.8% in 2021, 22204 settled back down to a 5.1% increase on average price in 2022 and remains the only zip code with an average price below $1M, but with more new construction popping up throughout the 22204 neighborhoods, I don’t expect the sub-$1M average price to last much longer. 

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Market Conditions Are Demand-Driven

We hear a lot about under-supply being the main cause of extreme competition and significant price appreciation. While that is true — we have been running low over the last few years on homes actively listed for sale — the reason for the low supply is almost exclusively demand-driven (high absorption rates) not because the number of homes being listed for sale has collapsed. As you can see from the chart below, illustrating the number of SFH listed for sale in each quarter over the last decade, the amount of inventory coming to market has remained relatively consistent. 

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What has changed is how quickly those homes are being purchased and that has caused the average number of SFH actively for sale to drop significantly, per the chart below. One thing that is particularly well illustrated is how much more of an effect the Amazon HQ2 announcement (November 2018) had on demand, and thus active supply, compared to the COVID market that had such a dramatic effect on other regional and national markets. 

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Looking Ahead

We have absolutely seen a shift in market conditions over the last couple of months. Good homes are sitting on the market through the first week(s), more sellers are reducing their asking price, and buyers are negotiating more contingencies.

This is all, in my opinion, a very good thing. This is not the bottom falling out in Arlington, rather just regaining some much-needed balance.

Will softer market conditions lead to a drop in prices? Maybe a little. There will certainly be some sales from the first half of this year that seem extraordinarily high versus comparable sales in the second half of the year, but I think on aggregate we won’t see much of a dip in pricing, mostly just a leveling off.

The best support for that theory comes from the fact that we didn’t experience the same extreme shift in demand/pricing during the COVID market that other regional and national markets did. We were already experiencing a competitive, moderately high-growth market prior to COVID due to natural market forces created by increased demand on the news of a massive new employer, Amazon, so I expect our market to be able to hold most, if not all, of its value through the cool-down. I also expect things to pick right back up in 2023 if interest rates come down a bit by the end of the year, like they’re expected to.

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

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

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

Which Property Types Appreciate Faster?

reallivingathomeblog Arlington, Buyer, Seller , , , , , 0 Comment
Which Property Types Appreciate Faster?

Question: What type of property appreciates faster – condo, townhouse, or single-family?

Answer: Since 2012, the data is clear – single-family homes appreciate the fastest, followed by townhouses/duplexes, and then condos. Since 2012, the average single-family home has appreciated 69% compared to 27% for condos.

This pattern was true before the pandemic market sent single-family home prices through the roof
(see 2016/2018 numbers below), but was amplified over the last two years as demand intensified for
single-family homes.

South Arlington Appreciating Faster Than North Arlington

Based on appreciation since 2012, South Arlington has been a better investment than North Arlington for all three property types. I expect that trend to continue as new construction picks up steam in South Arlington, Columbia Pike development continues to thrive, and Amazon HQ2 expands hiring.

Two-Bedroom Condos Appreciate Faster Than One-Bedroom

Two-bedroom condos consistently offer a higher return than comparable one-bedroom units. South Arlington condos have appreciated so much since 2012 that even a one-bedroom condo in South Arlington has produced a higher percentage return than a two-bedroom condo in North Arlington since 2012.

Of course, return on investment isn’t the only consideration when buying a home and you certainly need a lot more money to afford a single-family home (avg over $1.3M in 2022) than a condo (avg $533k in 2022) and a 2BR condo (avg $633k in 2022) over a 1BR (avg $377k in 2022), but for most buyers, having a good understanding of how historical returns compare by property type and size should influence decision-making. But please don’t forget that most single-family homes will also require a much higher maintenance, repair, and replacement budget than townhouses and condos (even accounting for condo fees) in order to access those higher long term returns.

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

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

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

Single-Family, Townhouse, Duplex Trends in 2021

judson726 Arlington , , , , , , , , 0 Comment
Single-Family, Townhouse, Duplex Trends in 2021

Question: Is the single-family home market still as intense as it was earlier this year?

Answer: In January I’ll do a deep dive into the 2021 market performance with a focus on home values, but this week I wanted to dig into some key supply and demand metrics for single-family, townhouse, and duplex homes in 2021 to highlight how the intensity of the market has shifted over the course of the year.

I’m focusing on the single-family, townhouse, and duplex (non-condo/apartment-style) market here because that was the market that exploded locally and nationwide in the wake of COVID. It’s important to note, however, when looking at the Arlington market that we didn’t experience nearly the extreme change as many other regional or national markets because things were already competitive thanks in part to Amazon HQ2 and because COVID-based demand tended to favor less expensive markets and markets that offered more space (land and house).

The trends for Arlington can be summarized below, highlighted by charts to follow:

  • Supply: Supply usually follows a familiar seasonal trend with low supply early in the year, lots of supply coming to market in the spring, followed by a consistent downward trajectory from summer through the end of the year. This year supply did peak in the spring, but maintained a more consistent volume of new supply through the rest of the year, with a surprisingly high number of homes offered for sale in Q4. My best guess for the strong Q4 numbers is that homeowners witnessed such impressive appreciation of their homes in the first half of the year (and second half of 2020) that they wanted to take advantage of current prices instead of timing the market for peak spring demand. It will be interesting to see if this negatively impacts listing volume in 2022.
  • Demand: Demand trends were consistent with their normal seasonal trends, albeit above average through the course of the year. Demand picked up quickly in Q1 and peaked in the spring, followed by a tapering of intensity in the 2nd half of the year. I believe that the tapering of the demand metrics in the 2nd half of the year was a combination of factors including, but not limited to, sellers raising prices based on first-half market performance, many of the most desperate buyers finding homes, buyers dropping out, and buyers focusing less on their home search as vaccines allowed people to return to travel and other plans. I expect strong demand in 2022, but without the crazy price appreciation we had in 2021.

The charts below highlight my supply and demand findings. A few notes on the data that makes up the charts:

  • The data is based on when a property was listed for sale, not when it sold. This gives us an accurate assessment of how the market performed at specific times during the year vs a trailing indicator of demand (using date sold)
  • I broke the year into two-week periods because I think it gives the right perspective on the information we want from the data
  • To aid your reading of the charts Period 5 starts on Feb 21, Period 10 starts on May 2, Period 15 start on July 11, Period 20 starts on Sept 19, and Period 25 starts on Nov 28
  • I removed new construction from the data because the way it’s listed often doesn’t reflect actual market conditions
  • I removed homes with zero days on market because it generally reflects a pre-market/off-market deal and they aren’t helpful in this type of analysis

The Market Moved Quickly, Gave Buyers Little Time to Think

Many buyers were forced to make significant purchase decisions in a matter of hours or even sight unseen to secure a good home. During peak spring demand, less than 20% of homes listed for sale sat on the market for more than two weeks and nearly 60% went under contract in less than one week.

Most Buyers Paid Over Asking Price

On average, buyers paid .2% over the asking price this year and for those who went under contract during a home’s first week on the market, the average buyer paid 2.8% over asking, peaking at an average of 5% over ask in the 9th Period (homes listed April 18-May 1). Remember, these are averages, there were plenty of people paying significantly more than that over the asking price.

Things have gotten slightly more manageable for buyers in the 2nd half of the year with a lot more homes selling at or below asking price, but even with tapering demand, buyers in the 2nd half of the year who go under contract in the first two weeks a home was listed paid an average of 1.5% over ask.

Supply Unusually High in 2nd Half, Average Days On Market Increasing

As noted above in my summary, supply volume broke familiar seasonal trends with a consistently strong flow of listings coming to market through the 2nd half and even into Q4. Thus, slightly less demand and unusually high new supply has led to modest increases in average days on market and less fierce competition.

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

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

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

2020 Housing Market Review: Single-Family Homes

elieliresidentialcom Arlington, Buyer, Home Owner , , , , , 0 Comment
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.

Landscaping For Resale and Current Trends

judson726 Seller 0 Comment

Question: I’m planning to sell my single family home in North Arlington this year and it seems that in my neighborhood, homes with great landscaping sell for top dollar. Our sale price justifies an investment in our lot, so I’m curious what the Arlington home-buyer demand from landscaping and if there are certain types of landscaping that offer the best Return on Investment.

Answer: Every spring I get a lot of landscaping questions and like to bring in my friend Jeff Minnich of Jeff Minnich Garden Designs to update Arlingtonians on what homeowners are doing in their yards and provide cost-effective tips for investing in your exterior for resale. If you’d like to continue the conversation with Jeff, you can reach him at jeff@minnichgardendesign.com or 703-525-4540.

Enjoy Jeff’s expert response to this week’s question:

In Arlington, homeowners take great pride in their gardens. Our temperate climate is such that we can enjoy our gardens for the majority of the year. Over the last 15 years, there has been a trend toward extending the interior living space seamlessly into the outdoor living space–outdoor rooms, kitchens, fire pits, play areas, fencing, to name a few.  The desirability of a well-designed garden space is a solid investment, and attractive to potential Arlington homebuyers.

Most people involved in the landscape industry have seen a surge in business the last few years, as the economy recovers. This year is particularly busy.

There are really two kinds of investment in a home and garden: doing what will bring pleasure, enjoyment, and ease to day-to-day life in the home; and doing what might add value to the property, if resale is in the cards.

When preparing to sell a home in Arlington, it is important to remember that many buyers have the means and desire to put their own personal stamps on their new homes and gardens. Therefore, I always recommend concentrating on safety items, tidiness, and color.

Fix that uneven sidewalk or replace rotten wood on the deck. Fix gates. Replace the burnt out bulbs in your outdoor lighting system (lots of potential buyers drive by and have a look at night, too). Have the windows cleaned and check the exterior paint job, particularly the front door (yes, these items are part of the outdoor landscape, too). Power wash the house, sidewalks, patio, deck, driveway…make sure your hardscapes sparkle.

Weed, re-edge and mulch the planting beds. Remove old/dead shrubs and trim existing ones. Look up into your trees–does a tree or branch look dead or precarious? Have a tree professional look at it. Potential homebuyers do notice these things. Cut the grass and make sure your lawn is not full of blooming dandelions! This one item can be a big turn-off.

Finally, finish the job by adding some flowers to windowboxes, pots, and beds. Remember, you cannot take back that first impression–the outside of your home is the first thing potential buyers see before walking through the front door, and it can often make or break a sale.

 

Once new homeowners get settled on the inside, they start to ponder what to do in their new gardens.

The most common request from new homeowners is a master landscape plan, which is a great starting place so they can prioritize, then phase, the work they’d like to do, all within a broader vision.

Safety issues should be addressed quickly–items like unstable walks or decks, handrails; and the often boring, but absolutely necessary, issues like grading, drainage, and where to put trash cans.

Fencing is a relatively quick and easy project to prioritize early on, and fences can give instant privacy, keep children and pets in the yard, and define a space. Nice fencing is particularly attractive to potential buyers with these concerns.

Outdoor living spaces are the next most-desired items, and these often involve building. It’s always a good idea to start with hardscapes–patios, sidewalks, decks, porches, walls, outdoor kitchens, etc.–and end with softscapes–plants, lawns, lighting, irrigation–as construction is messy and, try as they might, workers can still damage plants and surrounding areas.

Privacy from fencing and thoughtful plantings can screen unsightly views and enclose outdoor spaces.

Those interested in safety might find low-voltage outdoor lighting desirable. Outdoor lighting opens up the garden for nighttime use, too, and can be used to highlight architecture, specimen plantings, or specific pieces within the landscape.

For those who often travel and have very busy schedules, an irrigation system is a must. It really takes the edge off watering duties, yet should never 100 percent replace a discriminating eye and hand-watering intervention when gardens get really hot and dry.

I often say my outdoor lighting gives me the nighttime and my irrigation system gives me freedom, so they are very valuable to me.

Beautiful plantings are the icing on the cake and tie everything together. Much of North Arlington is blessed with large shade trees — a big reason potential buyers consider North Arlington — and lush evergreen and deciduous underplantings help potential buyers imagine living in these outdoor spaces.

Without a doubt, garden projects that define and enclose personal outdoor spaces–things like fencing and nice gates, patios and seating areas, and beautiful plantings–are items that not only increase the day-to-day enjoyment of the homeowner, they greatly increase the value of the property, as well.

Real Estate Investor Activity in Arlington

judson726 Arlington, Buyer, Investor, Seller , 0 Comment

Question: By year and areas of Arlington, what percentage of original house sales have been to developers and what percentage have been to individual/family occupants?

Answer: The numbers suggest that since 2009, just over 1,000 detached home sales in Arlington are to an investor. Unfortunately, it’s difficult to accurately determine the true numbers because so many investors buy properties off-market, but I’ll walk you through the data I used, some caveats, and my findings to get as close to an answer as I can.

The Data

  1. Data set includes all 8,004 sales recorded in MRIS (REALTOR database of record for “on-market” sales) of detached/single family homes in Arlington from Jan 1 2009 to Aug 20 2016
  2. Despite attempts with tax records and the County, I couldn’t come up with a good way to account for off-market deals. Since many tear-downs are off-market purchases I’ve attempted to back into the data using the sales of the finished home.
  3. Defining investor activity
    • I targeted tear-down/new build sales by parsing out homes sold within three years from when they were built
    • I targeted flips by parsing out two transactions at the same address where the second sale had a % return and time to market that suggested investor activity (quick re-sale w/ high mark-up)

Tear Down/New Build Sales:

Of the 8,004 detached home sales, 711 are likely tear-down/new build investor projects. Most should have a 1:1 corresponding purchase, but are small developments where multiple homes were built on one or more sub-divided lots (one purchase results in multiple new home sales).

Ask Eli Aug 30 2016 table FINAL

Tear Down/New Build Sales Stats:

I was able to locate corresponding purchase data in MRIS for 188 out of the 711 tear-down sales summarized above. Some sales statistics for those 188 sales below:

Ask Eli Aug 30 2016 Table 2

 

House Flipping:

While not quite as common, I identified 232 likely flips by investors in which two sales occurred over a short period of time (usually within 12 months) and the second sale sold for a significantly higher price. Here’s a summary of the non-tear down investor sales. Each has a corresponding purchase recorded in MRIS:

Ask Eli Aug 30 2016 Table 3

Based on the above data, I’ve identified 420 sales by investors since 2009 with corresponding purchases in MRIS and approximately 500 off-market, tear down purchases. There’s also likely to be a small number of off-market flip deals, but not nearly as many as off-market tear-down purchases.

There are currently 91 detached homes listed for sale or under contract that were built since 2014 that have a corresponding purchase by an investor either on or off-market. Additionally, the historical flip numbers suggest that there are about 20-30 flips purchased in the last 12 months by investors that have yet to be sold.

This brings us to approximately 1,050-1,100 homes sold to investors since 2009, which represents approximately 10-12% of total home sales. With each investor purchase having a corresponding sale by the investor, the total transaction activity for detached homes in Arlington attributed to investors is around 20%.

This week’s question was brought to us by one of ARLnow’s most prolific commenters and I enjoyed the challenge! It certainly put my data/Excel skills (and patience) to the test. I enjoy this type of data-driven article and welcome similar questions from other readers.

Landscaping for Homeowners and Sellers

judson726 Seller , 0 Comment

Question: What are some good landscaping tips for selling my home this spring?

To answer your question, I sat down with my good friend and long-time Arlington resident, Jeff Minnich (you should see his yard!) of Jeff Minnich Garden Design, to discuss smart ways to boost the outdoor appeal of your home before listing it and talked about some of the current landscaping trends he’s seeing.

High ROI Landscaping for Sellers

  • DAPPR: Define bed edges, Add fresh mulch, Pull the weeds, Prune the bushes, andRemove dead leaves
  • Lawn is King: Tall Fescue grass works the best in Arlington. The best time to seed your lawn is March – April and September. Water 1-2x per week. Give it about a month to grow.
  • Blast of Color: Azaleas are beautiful around here in April and May. Pansies are good options fall thru spring. Geraniums are great in the summer.
  • Grand Entrance: Your front door is a focal point – hit it with a fresh coat of paint or replace all together. Power wash your driveway and walkways. Flagstone aka Pennsylvania Bluestone offer great value if you need to replace or add a walkway (also perfect for patios).
  • Create a Scene: Help potential buyers picture themselves relaxing in their future yard by staging an area of your yard with chairs, table, umbrella, hammock, lemonade pitcher, etc.
  • De-clutter: Just like you removed personal items from inside the home, put things like statues and lawn gnomes away
  • Condos too: If you have some outdoor space (balcony, patio, etc) pot some plants (see Blast of Color) and stage it (see Create a Scene)

Landscaping for Homeowners

Trends:

  • Outdoor living spaces are the biggest trend in Arlington. This includes kitchens, fire pits, entertainment areas, and lighting
  • Hydrangeas and other “old fashioned” shrubbery are back in style. Dogwoods and azaleas are always trendy in Arlington.

Approaching a landscaping project:

  • Step 1 Hardscaping: Install patios, walkways, living spaces, water features, etc. This can cost anywhere from $10,000-$25,000+
  • Step 2 Sheds and Storage: Establish space for these items next
  • Step 3 Plantings: Work from biggest (trees) to smallest (flowers)
  • A full project usually takes 1-3 months to complete
  • There’s no such thing as maintenance-free

Thank you Jeff for all of your great advice. To learn more about Jeff or see examples of his work, please visit his website (link) or send an email tojeff@minnichgardendesign.com. Jeff received his horticulture degree, with an emphasis on landscape design and nursery management, from Virginia Tech. His garden design/build firm, Jeff Minnich Garden Design, Inc. takes the client from initial design concept through the completed garden design. Enjoy the wonderful colors of his personal Arlington garden at 2268 N. Upton St.

The Cost of an Extra Bedroom

judson726 Arlington, Buyer , 0 Comment

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Question: What is the price per bedroom ($/BR) in Arlington?

This is a GREAT question and I’ve been looking forward to answering since early December. Before I jump into the data, I want to point out that giving a dollar-value is impossible on such a large scale because $/BR is relative to the cost/type of home, so instead of a dollar value, I discuss the % increase to add a bedroom in order to normalize the data.

 

Cost of a Condo Bedroom

I compared one and two-bedroom condo sales within high rises with at least thirty sales since 2008 and a healthy balance of one and two-bedroom sales. Thirty-nine buildings made the cut, with 1,748 one-bedroom and 1,616 two-bedroom sales representing the data. Instead of lumping all one and two-bedrooms together and taking the average, I calculated % difference within each building first and averaged them together (thank god for pivot tables!).

RESULTS

·         The average two-bedroom condo costs 52.6% more than a comparable one-bedroom (standard deviation of 16.6%)

·         88% of the time a second bedroom also comes with a second bathroom

·         The average two-bedroom condo is 421 square feet larger than a one-bedroom

·         The cheapest buildings to add a bedroom are Ballston 880 in VA Square/Ballston (16.1% increase) and Tower Villas in VA Square (20.4% increase)

·         The most expensive buildings to add a bedroom are Waterview in Rosslyn (81.8%) and Horizon House in Pentagon City (83.8%)

·         The relative cost to add a bedroom was almost identical in North and South Arlington, although the dollar value increases significantly in North Arlington

 

Cost of a Detached/Single Family Home Bedroom

I chose to compare Craftsman style homes because they’re the most popular home design in Arlington right now and are mostly newer builds/renovations with similar quality (good for data). In all, there have been 495 Craftsman-style homes sold in Arlington in the last 10 years. 94% of those sales were for three, four, or five-bedroom homes (22%, 56%, and 16% respectively), so this is where we’ll focus.

RESULTS

·         Adding a fourth bedroom costs an average of 28.5% more than a comparable three-bedroom

·         Adding a fifth bedroom costs and average of 10.5% more than a comparable four-bedroom

·         The cost difference closely tracks the increase in square footage, with a 22.6% and 7.3% increase in square footage between three and four-bedroom and four and five-bedroom homes, respectively

·         The 22201, 22205, and 22207 zip codes were responsible for 82% of the total Craftsman sales volume (last 10 years) with average sale prices of $1.16M, $1.43M, and $1.56M for three, four, and five-bedroom homes, respectively

 

I also found that the relative cost to add a bedroom remained consistent over the last 10 years, despite the dollar value increasing as home prices go up.

 

ATTN Readers!! In March I’m starting a monthly neighborhood spotlight and looking for Arlingtonians who would like their opinions incorporated into this column (favorite running trail, best neighborhood bar, neighborhood personality, etc). Send me an email if you’re interested!