This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.
Question: I’ve been in the market for a 1 bedroom condo along the Orange Line and am getting really frustrated with how expensive it is. I can’t believe people are asking $450k for a standard 750 square foot condo! Do you think it would be a better investment to buy a townhouse in Ashburn for the same price?
People are often told that condos are an inferior investment to townhomes and single family homes. It’s probably true in many parts of the country, but you really can’t make that argument without taking location into consideration.
There is currently only one new construction condo building for sale along the Orange Line, which is a luxury building called Gaslight Square. In Ashburn, I am able to find 12 new townhouse developments currently for sale. That’s a lot of new inventory and I expect that number to continue climbing over the next few years. It’s going to be challenging to compete with all these new and resale townhouses when it is time to sell your property.
I also wonder how the growing cost of commuting is going to affect demand for homes along the Greenway, with tolls threatening to increase to $4.90 / one way. This adds insult to injury when commuters are already getting clobbered by high fuel costs.
When it comes to real estate investment, I think you can learn a lot from how an area has performed historically. Below are the average sales prices of 750 square foot units in the Clarendon 1021 condo building. As you can see, Clarendon 1021 held its ground pretty well during the economic downturn and rebounded quickly as the economic climate began to improve.
- 2006 average sales price = $389,666
- 2007 average sales price = $396,380 (+1.7%)
- 2008 average sales price = $382,900 (- 3.4%)
- 2009 average sales price = $370,500 (-3.2%)
- 2010 average sales price = $380,950 (+2.8%)
- 2011 average sales price = $394,467 (+3.5%)
- 2012 average sales price = $409,667 (+3.9%)
- 2013 average sales price = $446,240 (+8.9%)
Let’s look at 3BR townhomes in an Ashburn neighborhood called Belmont Land Bay, built around the same time as Clarendon 1021. As you can see, prices took a huge dip after 2006 and have still not fully recovered.
- 2006 average sales price = $631,510
- 2007 average sales price = $417,900 (-33.8%)
- 2008 average sales price = $368,833 (-11.7%)
- 2009 average sales price = $354,202 (-4.0%)
- 2010 average sales price = $420,667 (+18.8%)
- 2011 average sales price = $449,557 (+6.9%)
- 2012 average sales price = $391,250 (-13.0%)
- 2013 average sales price = $428,143 (+9.4)
I understand your frustration with the high cost per square foot in Arlington. I also understand that there are plenty of legitimate reasons why someone would enjoy living in Ashburn. But, from an investment standpoint I feel more confident about the relative stability in Arlington real estate. The good news is that once you are able to find the home for you, rising prices will shift from a source of frustration to become a welcomed indication that your asset is earning value.
If you enjoy reading my articles, you will probably also enjoy our Facebook posts on the Arbour Realty page. For every new page like we receive before Dec. 15, we are going to make a $1 donation to the Arlington County Secret Santa program, which purchases gift cards for children of low income families and in foster care, low income elderly and disabled Arlington residents that would otherwise go without during this upcoming holiday season. You are welcome to un-like us after Dec. 15 if you want.
The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.
Featured in the latest Just Listed is a 3 BD/2 BA home with a covered front porch. Explore the private backyard in the open house this Saturday from 11 a.m.-2 p.m. and Sunday from 1-4 p.m.
Seven years after the initial rollout of Arlington Public Schools’ digital learning initiative, and after a year of heavier use due to distance-learning, opinions on tech in schools remain divided….
It’s overcast and muggy right now, but it could be stormy later today in Arlington.
Amid a rise in coronavirus cases, community leaders and the Arlington County Public Health Division are continuing to find ways to target particular demographics for which more outreach is needed….