This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!
Question: We have been searching for a home for over 6 months and have expanded both our criteria and budget, but still not finding something we like. We have heard that the housing supply is low, is that true for Arlington?
Answer: The housing supply shortage in Arlington is a big problem and it’s not just Arlington that is feeling the pain, it’s most of Northern VA and the greater DC Metro (nationwide as well).
You’re not alone in your experience either, we have a handful of clients who have been looking for the better part of a year while also expanding their search area and budget, but unhappy with what’s available.
So, is the housing shortage mostly anecdotal and buyers are just too picky or to cheap? Nope… here are some charts that highlight the alarmingly low housing inventory in Arlington:
Eight Consecutive Quarters of Fewer Homes For Sale, Year over Year (YoY)
After seven straight quarters of YoY decreases in the number of homes for sale, Q1 2018 brought us the largest drop in YoY homes for sale with 21.1% fewer homes for sale than Q1 2017, which was already 7.2% lower than the number of homes for sale in Q1 2016. The chart below represents all homes for sale in Arlington.
Existing Housing Supply Would Only Last 1.5 Months
Months of supply measures how long the existing housing inventory would last given the last 6 months of demands (absorption). Most economists say that 4-6 months of supply represents a well balance housing market and Arlington has hovered around 1.5 months of supply for the last 6 months.
I broke out the chart below by housing type (detached, townhouse, and condo) to highlight the fact that the problem exists across all housing types, but town-homes have historically been the least supplied type of housing in Arlington.
Good Homes Are Selling Much Faster
This chart shows the YoY change in the number of homes sold within the first 10 days on market, which has increased the last six quarters in a row. There was an impressive 53.4% YoY increase from Q1 2016 to Q1 2017, followed by yet another double digit increase in homes sold within the first 10 days from Q1 2017 to Q1 2018.
The $1M+ Home Market Is Healthy
The only sub-market in Arlington with a healthy supply are homes listed for over $1M, with around four months of supply, while everything priced from $300k-$800k is under one month of supply.
However, the $1M+ sub-market is only “healthy” on paper, take a deeper look and you’ll see two major problems (cue comments that the problem with $1M+ homes is that they are $1M+). First, most of those homes are actually $1.5M-$2M and second, most of those homes are tear down/new construction with very similar size and design, leaving wealthy buyers who don’t like new construction with very few options.
Tips For Buyers
Here are some tips for buyers searching for hard-to-find homes in a tough market:
- There are few, if any, great deals in an under-supplied market. In this market, good value is finding a home that meets most of your criteria, that you’ll be happy in, that you can afford.
- If you want to negotiate, your best bet is to find something that has been on market for at least 2-3 weeks otherwise you’ll accumulate more rejected offers than homes currently on the market
- Put in the time early in your search to understand the market so you can recognize the right home when it comes on market
- Base your offer on what the home is worth to you, not just the asking price
- Understand how Escalation Clauses work and use them to your advantage
- Find out if there are offer deadlines (usually the Monday or Tuesday following the first day on market)
- Understand the cost-benefit of contingencies (inspection, financing, appraisal are the standard contingencies) and how you can maximize the strength of your offer with limited risk exposure
- Consider doing a pre-inspection — a home inspection before you make your offer
- Have a strong financing approval letter from a reputable lender
A lot of readers have reservations about the value real estate agents provide in buying or selling homes, but without coming off as too much of a salesman for my industry, difficult markets like this are where having a strong agent makes a big difference. Not just somebody to open doors for you and draft a contract, but somebody who understands your needs that you trust to advise you on making the right offer, at the right time.
If you have an agent you trust, rely on them. If you’re looking for somebody, I’m available every day of the week to talk or meet, just send me an email at [email protected] and I’ll be happy to help.
If you’d like a question answered in my weekly column, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at www.EliResidential.com. Call me directly at (703) 539-2529.
Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, (202) 518-8781.
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Arlington and its neighbors have become more segregated in the last 10 years while fair housing legislation at the state level faces significant roadblocks. Arlington’s fair housing enforcement, education, and commitment to equity practices in housing policy and programs are beginning to show signs of improvement but much more needs to be done.
Join the NAACP Arlington Branch, HOME of Virginia, and Equal Rights Center for the 2nd Annual Arlington Fair Housing Conference on April 15th to discuss the threats and opportunities to advancing fair housing policy across the state and within Arlington.
The half-day, in-person event will feature speakers from fair housing advocacy organizations and government agencies including the U.S. Department of Housing and Urban Development, and focus on fair housing policy trends in Virginia and Arlington County. The conference aims to advance the understanding of issues and policies related to equity and affirmatively further fair housing among local officials, advocates, and members of the public.
2nd Annual Arlington Fair Housing Conference
Is home ownership a goal of yours in 2023? Now is the time to make it happen! Grab a (virtual) drink with the area’s top Real Estate experts, learn all about the home buying process and on how you can get $1,500 towards your closing costs immediately!
Did you know the average Arlington renter will spend $150K in 5 years of renting? Stop paying down someone else’s mortgage! Join us for a Rent vs. Buy Happy Hour on Wednesday, April 5th at 6 p.m. via Zoom. If this time doesn’t work, we also are offering times convenient for your schedule!
A lot has happened in the local market since the beginning of the pandemic. Sip on your drink of choice and learn from Northern Virginia, Arlington and Washingtonian Magazines top producing agents! We will discuss the latest market updates, the home buying process and rent vs. buy cost savings. Please RSVP by clicking here.
Call/text Manavi at 703-869-6698 with any questions!
Private School Fair
Congressional School to Host MONA Private School Fair Thursday, April 27 at 6:30 PM
Congressional School in Falls Church, VA is delighted to host the MONA (Mothers of North Arlington) at an upcoming Private School Fair. Private schools from around
WHS Spring Festival
Join us at the WHS Spring Festival on April 22, 2023, from 10am- 3pm at Wakefield High School(main parking lot). Come out to shop, play, and eat!
Shop local vendors, arts & crafts, new and used items, food vendors/trucks, and