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.
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.
Question: I need more living space and single-family homes are out of my budget, so I’ve been searching for townhouses in Arlington, but finding that the options are limited. Can you provide some guidance on what the townhouse market in Arlington looks like?
Answer: I spend a lot of time digging into the condo and single-family home markets, but not much time on the townhouse/duplex market. Why? Because townhouses and duplexes make up such a small part of our housing inventory. According to this Missing Middle Study, townhouses and duplexes make up just 5.9% of Arlington’s housing inventory (3.7% are townhouses).
Fortunately (for some), we’ve recently had an unusual surge in new townhouse developments hit the market including:
Arlington Heights: 27 townhouses developed by NV Homes, walking distance to the East Falls Church Metro, ranging in price from about $1.1M-$1.4M
Trenton Square: 19 townhouses developed by Madison Homes, near the intersection of Rt 50 (north side) and Glebe and a short distance to Ballston, starting at around $1M
Morrison Hill: 17 townhouses developed by Beazer Homes, near the intersection of Columbia Pike and George Mason (across from the new Harris Teeter), ranging in price from about $800k-$900k+
Towns of 24th: 8 townhouses developed by Evergreene Homes, in the Nauck neighborhood near the intersection of 395 and Glebe, starting in the mid-$800s
Park Nelson: 3 townhouses developed by District Line Development, in the Nauck neighborhood, ranging from $900k to $935k.
Townes at South Glebe: 16 townhouses across two sites developed by Christopher Companies, off of S Glebe between Columbia Pike and Shirlington, with prices starting in the upper $800s
Explanation of Data
For the data below, I looked at sales of townhouse and duplex properties over the last five years (except the last chart). I decided to separate these properties into ownership type: Condominium and Fee Simple.
Condominium ownership is generally used in multi-family buildings (apartment-style), but was popular in many of South Arlington’s townhouse communities in the mid 1900s. In condominium ownership, the HOA is generally responsible for what’s outside the walls of the home (roof, fencing, some plumbing, etc) and HOA fees are therefore (significantly) higher.
Fee Simple ownership means that you own the entire structure and the land your home sits on. The HOA fees are usually much lower because there’s less common ownership.
Over the last five years, we’ve had a nearly 50/50 split between condo and fee simple townhouse/duplex sales.
5-Year Townhouse Market Performance
Unsurprisingly, the townhouse/duplex market has followed the same general trends as the rest of the housing market, with a strong 2018, followed by a white hot 2019 and 2020, where the average townhouse/duplex sold for more than the asking price and 60% or more of homes listed sold within the first week.
Here are a few highlights from the data below:
There are a few ways of looking at appreciation here, but overall, the data suggests the townhouse/duplex market has appreciated ~20% in the last five years, with most of that coming in the last two years
The apparent drop in market value, by average sold price, of Fee Simple in 2019 is a misrepresentation of the market and due to the difference in the distribution of sales (more inexpensive/fewer expensive listings), the $/sqft tells a more accurate story for 2018-2019 Fee Simple pricing
The ~10% appreciation of the Condominium townhouse/duplex market (smaller, older, and less expensive than the Fee Simple market) in 2020 is likely due to buyer demand shifting away from similarly priced apartment-style condos in buildings towards private entry townhouse/duplex living with easier access to outdoor space (COVID related)
While quite different in size, price, age, and HOA fees, the Condominium and Fee Simple styles of townhouse/duplex ownership generally move in close parallel
Year Sold / Ownership Type
Avg Sold Price
Avg $/sqft
Avg Sold to Org Ask $
% Sold <7 days
# Sold
2016
$587,687
$349
99.0%
39%
441
Condominium
$473,288
$333
98.8%
38%
260
Fee Simple
$752,016
$381
99.4%
42%
181
2017
$617,917
$345
99.1%
40%
558
Condominium
$486,161
$333
99.4%
43%
313
Fee Simple
$786,243
$367
98.8%
36%
245
2018
$632,371
$367
99.2%
45%
533
Condominium
$501,229
$358
99.3%
47%
292
Fee Simple
$791,265
$381
99.2%
44%
241
2019
$642,569
$413
101.0%
60%
481
Condominium
$502,037
$385
101.4%
63%
220
Fee Simple
$761,025
$436
100.7%
57%
261
2020
$703,644
$435
100.4%
62%
561
Condominium
$552,263
$416
100.8%
61%
267
Fee Simple
$841,123
$453
100.1%
63%
294
What to Expect from Townhouse/Duplex Inventory
Below is a chart showing what your average Condominium and Fee Simple townhouse/duplex has offered buyers over the last five years of sales. While Fee Simple homes are roughly 43% larger, with an extra bedroom/bathroom, and about 25 years newer (likely to have a more open floor plan, larger bathrooms, and larger closets) the average Fee Simple home in 2020 was about $290,000 more expensive.
Ownership Type
Avg Bedrooms
Avg Full Baths
Avg Half Baths
Avg Total Sqft
Avg Year Built
# Sold
Condominium
2.2
1.9
0.5
1,418
1959
1352
Fee Simple
3.0
2.5
1.0
2,025
1984
1222
Sales Since 2019, by Decade Built
I also thought it would be interesting to compare what inventory looks like based on the decade it was built. The following table details what you can expect to find in townhouse/duplex inventory by decade built, based on sales since 2019.
Below are a few highlights from the data:
There are three “generations” of townhouse/duplex inventory: 1930s-1950s, 1960s-1980s, and 1990s-current. In each “generation” the size of homes being built increased significantly.
The oldest, least expensive homes sell the fastest, with an incredible 71% of 1930s townhouses/duplexes selling within one week on market. On the flip side, the newest, most expensive inventory can take a little longer to sell, with less than 50% of these homes selling within one week. However, even at 40% and 47%, that is still a fast pace for any market.
Of the 1,012 townhouse/duplex homes sold since 2019, 279 (27.6%) had an attached garage. On average, a townhouse/duplex with a garage sold for just over $967,000 and 77% of these homes were built in the 1990s-2010s. 75% of homes with a garage had a two-car garage, representing only about 20% of total townhouse/duplex sales and requiring an average purchase price just over $1M.
Decade Built
Avg Sold Price
% Sold <7 days
Avg Total Sqft
Avg BR
Avg Full Bath
Avg Half Bath
# Sold
1930s
$451,593
71%
1,018
1.9
1.3
0.4
129
1940s
$535,779
61%
1,361
2.2
1.9
0.1
301
1950s
$441,071
54%
1,117
2.5
1.4
0.6
54
1960s
$685,417
60%
1,871
3.2
2.2
1.3
30
1970s
$697,341
63%
1,953
2.9
2.3
1.2
83
1980s
$690,408
67%
1,618
2.6
2.3
1.1
198
1990s
$966,944
67%
2,128
3.1
2.6
1.3
99
2000s
$1,057,057
47%
2,560
3.2
2.6
1.2
60
2010s
$979,365
40%
2,218
3.5
3.2
1.1
88
For those of you exploring the purchase or sale of a townhouse/duplex in Arlington, I hope this information was helpful! If you’d like to discuss buying or selling strategies, don’t hesitate to reach out to me at Eli@EliResidential.com.
