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Ask Adam: Are There Any Bargains Left in Arlington?

by ARLnow.com | December 11, 2012 at 11:15 am | 4,868 views | 36 Comments

This periodic sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty. Please submit follow-up questions in the comments section or via email.

Question: Are you seeing any bargains on the market still? My preference is not to deal with a fixer upper.

The usual knee jerk reaction is to hunt for the elusive foreclosure deal. At the time I’m writing this, there are seven foreclosure listings in Arlington. I used to sell foreclosures for the big banks, and I can tell you firsthand that they are not always the great values that consumers perceive them to be, especially when they turn into bidding wars. You should also take into consideration that many have not been maintained very well.

From my vantage point, homeowners who purchased new construction in 2012 saw very lucrative gains. Two new townhome neighborhoods that come to mind: Mosaic in Merrifield and MetroWest near Vienna metro station.

In an inclining market, the key is getting in early. The developers have a lot of homes to sell in these neighborhoods and they start off their sales, priced to be very competitive with resale inventory. Then they often begin steadily increasing prices throughout the remainder of their sales cycle. I have clients who purchased early in the two neighborhoods I mentioned, who saw nearly double digit percentage appreciation last year. I’m basing this off of the difference between what they purchased their homes for and what they are selling / appraising for today.

This an Arlington based website so I won’t go into much detail about these communities, which are located in Fairfax County. I do however, expect even greater demand (and appreciation) when similar neighborhoods become available in Arlington County this next year.

There is a construction site that recently broke ground in Ballston that looks interesting. It is a townhome development by local builder, Madison Homes.  It will consist of 28 new homes and will be called Ballston Park. If they deliver a good value and have initial housing options in the $600-$800k range, I expect that they will do very well.

I’m also keeping an eye out for the 44 townhome development that will occupy a portion of the 5-acres that was formerly a Rosenthal Jeep dealership at 3400 Columbia Pike. I hope to see these initially priced in the $500-700k range.

It would be nice to see some of the rental buildings that were originally slated to be condos, convert back to condos. Two prospects that would not surprise me at all are The Joule in Ballston and Zoso Flats in Clarendon. There is a huge shortage of newer condos along the Orange Line and I would expect to see people line up for either of these buildings, if priced well.

There is also a chance that JBG will decide to sell Sedona or Slate as a condo. They are 12 and 14 story residential buildings being constructed three blocks from Rosslyn metro station with 12,000 square feet of retail on the ground floors. As of right now the word on the street is that they will both be rentals, but I am sure they are exploring the possibility of going condo with one of them. JBG is planning to sell 25 townhomes as part of this development, which I am guessing will be offered in the luxury price range.

As for single family homes, unless someone buys a golf course, there really isn’t enough land left in Arlington for a new neighborhood. The best bargains I have seen for single family homes tend to be in emerging neighborhoods like Highview Park and Penrose.

With the large sums of money required in order to own a home in Arlington, it is hard to stamp any of them as “bargains”. That said, there are some good opportunities in Arlington to make lucrative investments. Though my response to your question focused on new construction, there are plenty of opportunities on resale homes that I would be happy to discuss in more detail.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

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  • Who is Adam G.?

    I’m consistently amazed at how a realtor can post repeatedly on this site and not give us load after load of BS. Many realtors I know do not come off like this. Thanks for offering your insights Adam. Oh and BTW, Bargains in Arlington, HA! Half a mill would be a bargain in this area for a house.

    • Juanita de Talmas

      I agree. I like that he doesn’t constantly parrot the standard Realwhore line of “there’s never been a better time to buy”, which they say no matter what the market is actually like.

      • drax

        But that was pretty much true no matter what the market was like…until 2008.

        • Juanita de Talmas

          Perhaps, but they never stopped saying it.

          • drax

            Or people stopped believing it.

        • R. Griffon

          I dunno, there’s a pretty strong argument that post-crash was the best time in a long time to buy. Low prices and rock-bottom lending rates? What more could you ask?

          • Juanita de Talmas

            That’s just the point. According to most Realwhores, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012 were all the best time to buy. But how can it always be the best?

    • bman

      i am consistently amazed at the original question…people always want something for nothing. Limited number of resources, and more people chasing the same thing.

  • Don

    Check out for sale by owner, Engleside Cooperative at 19th and Vietch St N….2 bedrooms, balcony, roof terrace, covered garage…..$200K!!

    • 350sbc

      More info?

      • Don

        call Arthur at 703-525-3876. He is the owner.

      • Greg

        A word of caution regarding coops and older buildings. The fees may be in excess of $1,000 a month, which is why it’s going for so little. You see that a lot in older buildings in Crystal City. Look into their reserve fund, planned improvements, and the general condition of the building, as well. I’m not a real estate expert and that list isn’t exhaustive but learned enough before making a huge mistake.

  • Allison

    Anything new in Pentagon City or Crystal city on the horizon?

  • Fairlingtonian

    Unfortunately, prices in Fairlington have been dropping over the last two years.

  • Penroser

    How is Penrose “emerging”? It’s full of nice (smallish) single family homes, has low crime, and is close to DC and mass transit.

    It is a shame, though, that the County did not try to take over the golf course by imminent domain.

    • What about?

      What about Douglas Park and Green Valley? These seem to be the best places to buy IMHO. Douglas park if you want less crime and a more established neighborhood, or Green Valley if you want more diversity and are willing to deal with smaller lots and neglected homes.

    • drax

      Imminent domain is just about to happen!

      • janedough

        nice…..subtle, not condescending….

  • ColFor

    I really don’t see how Columbia Forest gets ignored as a good value and emerging neighborhood in Arlington. It may be the last remaining reasonably price neighborhood. There is a lot of potential and opportunity there. It is located directly on the trolley line, across from the new Wakfield and has great proximity to Carlin Springs to go North, George Mason to Rt 7 Skyline and Four Mile to Shirlington/395 or just stay on the Pike to a plethora on new options. There has been some nice turnover and rehabbing of properties that has brought some much needed change. Where else in Arlington to do you land 4 beds, 3 bath for $400K or 3 bed, 2 bath for $300K? Very safe and a good # of families. Things are changing in this part of Arlington.

  • Hadur

    Ah, my semi-regular reminder that I will never be able to afford property in Arlington!

  • veeta

    “Bargain” should probably be defined by the questioner, but you are not likely to find a bargain unless you are willing to fix one up. They are there–if you want to live close in but can deal with not living on a metro line, but you are guaranteed to need to do renovating. If you are planning on living there a long time, why not?

  • NPGMBR

    I’ll echo the same feelings about Condos in SArl along the Pike. I’ll be ready to buy by this time next year and as of right now I’m almost completely priced out of Arlington. I was hoping the Halstead or Penrose or the other new building would convert back to condos but I have no idea if thats gonna happen. As of now, im looking in the Woodbridge area where I’d get an awful lot for my money but of course I’d LOVE to buy in ARL.

  • C.H. Smith

    There are two ways to expand the pool of qualified home buyers, and they both rely on expanding leverage: A) lower the down payment from 20% cash to 3%, and B) lower the mortgage rate to 3.5%.

    Lowering the down payment increases the leverage from 4-to-1 to 33-to-1, a massive leap.

    Increasing leverage increases risk. Over 90% of all mortgages are guaranteed or backed by Federal agencies such as FHA. This “socialization” of the mortgage industry means that losses ultimately flow through to the taxpayers, who are subsidizing the housing industry via these agencies.

    Lowering the mortgage rate increases the leverage of income. It now takes much less income to qualify for greatly reduced monthly payments.

    With mortgage rates barely above the prime rate and Treasury bond yields negative in terms of inflation, there is simply no room left for lower rates or down payments. The “increase home sales by expanding the pool of buyers” game plan has been run to the absolute limit.

    The pool of buyers cannot be expanded any further; that boost to sales is done.

    The unintended consequence of enticing marginal buyers to buy homes is that defaults are rising: 1 out of 6 FHA-insured loans are delinquent. This is the “blowback” of qualifying everyone with an income above the poverty line as a homebuyer.

    • Greg

      Rates are already below 3.5%. I got an email from PenFed that they’re offering 3.125% 30 year fixed.

    • Greg

      One more thing: the pool of buyers can (and will) be expanded by the increasing number of renters who decide to buy once they can afford a house and families moving from DC. There are a LOT of people in their mid-late 20s and early 30s who are looking to become 1st time condo/homebuyers in Arlington. As long as the local economy remains strong and interest rates remain low, there will be more buyers each year.

    • bman

      we already had no down payments, look where that got us. Once down payment goes up again, the music stops playing and people are trapped again.
      Same problem when interest rates will go up.

    • Lee-n-Glebe

      Of course, increasing the pool of qualified home buyers drives up home prices.

  • Autoexec.bat

    TLDR; No.

  • 30Something_Barren_Workaholic

    Ah yes, the ole “Housing is a great investment line.” Isn’t that what got us in this problem in the first place. If I can only hold out a few years, then Scrooge McDuck will be rich!

    • R. Griffon

      No, what got us here was primarily the deregulation of financial markets and questionable lending practices, augmented by fairly steady economic expansion coupled with record low interest rates.

  • Wild Bill

    again is Adam paying Arlnow for this bs ?

    • Tame Will

      Do you know what the word “sponsored” means?

  • Wild Bill

    I do have an MBA and 40 years of owning my business but sponsored does not necessarily
    mean he is paying for it – correct?

    • Wordsmith

      sponsored past participle, past tense of spon·sor (Verb)
      Verb

      Provide funds for (a project or activity or the person carrying it out).
      Pay some or all of the costs involved in staging (a sporting or artistic event) in return for advertising.

    • Greg

      In case you were wondering why people don’t put as much credence in an MBA as you do…

  • Govleach

    Renting versus buying should utlimately be thought of as a Net Present Value problem in finance, and buying residential real estate should not be toughted as the greatest investment as it historically has. If you’re going to be hear 2-3 years, then renting better. If you’re going to be here a long time, then buy the nicest thing you can afford and consider primarily it to be: (1) consumption good; and (2) maybe a financial investment. And only do so only after you’re maxing out your 401(k), TSP, or other such vehicle.

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