This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. Please submit your questions to him via email for response in future columns. Enjoy!
Question: I’ve seen a lot more condos come to market and also some staying on market longer than before, is that part of a larger trend in the condo market?
Answer: In July, I predicted there would be a surge in housing inventory that was held off the market this spring because of COVID. That has proven to be moderately correct for single-family housing and very accurate for condos. The market has had no trouble absorbing the extra single-family housing, albeit with less competition than before, but the condo market has not absorbed the extra inventory and has undergone a significant shift in the last two months.
In short, listing volume for Arlington condos reached historically high levels in July and August, absorption (demand) is down, and months of supply is the highest it’s been since the fall of 2017.
Historically High Listing Volume
July (253 listings) and August (229 listings) had the 5th and 13th highest months for listing volume in the last ten years. Prior to this year, the top fifteen months for condo listing volume fell in April or May (peak demand offsets higher listing activity), with the exception of June 2015. This is the first time that the number of condos listed in July or August has ever exceeded 200.
Pre-Amazon HQ2 Demand
Since Amazon announced plans for HQ2 in November 2018, condo demand was through the roof with 15 straight months of more condos going under contract than listed for sale (over 1.0 in the chart below), beginning January 2019. Absorption levels, a strong indicator of demand, are now more reflective of 2016-2017 which brought very little real appreciation in the condo market.
Monitor Months of Supply
The Months of Supply metric combines inventory levels and rate of absorption (supply and demand). It measures how long it would take to sell out of existing inventory given the current pace of sales. Most housing economists say that ~6 months of supply is needed for a well-balanced housing market, a number we’ve never come close to in Arlington.
Given that it takes ~6 months of supply for a balanced market, Arlington is still very much a seller’s market, but nowhere close to what it’s been over the last two years. In August, Months of Supply exceeded 2.25, higher than it’s been since October 2017 (2.32). Compare that to December 2018 — March 2020 with an average of .67 (just over two weeks of supply) and high of .88, and it becomes clear why many buyers and sellers are experiencing a different market now than they were as recently as June.
Condo Market Stronger Across Northern Virginia
The rest of Northern Virginia also experienced an increase in condo supply in July and August, but not nearly to the extent of Arlington. Absorption (demand) has also remained pretty close to the strong numbers seen since January 2019. As a result, Months of Supply for the entire Northern Virginia condo market has increased slightly over the last two months and fits normal seasonal patterns.
What About Washington, D.C.?
It’s worth noting that while the overall Northern Virginia condo market is performing well, the Washington, D.C. condo market looks more like Arlington. In July and August, Months of Supply (2.73 and 2.80, respectively) reached the highest levels since October 2012 and were the first and third highest monthly listing volume over the last ten years. July (863 condo listings) is the first time in over a decade that more than 800 listings came to market. Previously, the record was 762 set in September 2019. There were 757 condos listed for sale in August.
It’s still too early to know if/how prices will be affected, but it almost certainly means longer days on market and fewer multiple offer scenarios. The effect on pricing will likely depend on whether this is a short-term shift that will correct itself come Q1 2021 or a more long-term change in urban buying patterns. My money is on this being short-term and the market returning closer to its two-year averages by February or March 2021.
In the meantime, I think we’re in for a frustrating few months for many condo owners due to the combination of surging listing volume (increased supply), an upcoming Presidential election (fear of an unknown future), and uncertainty around the timing of a widely available COVID vaccine (less demand for multi-family/urban living).
If you’d like to discuss buying or selling strategies, don’t hesitate to reach out to me at [email protected].
If you’d like a question answered in my weekly column or to set-up an in-person meeting to discuss local real estate, 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 D.C., and Maryland with RLAH Real Estate, 4040 N. Fairfax Dr. #10C Arlington, VA 22203, (703) 390-9460.
Wednesday is forecast to be a “Code Orange” day in Arlington and across the D.C. area. That’s according to the Metropolitan Washington Council of Governments, which says local air quality…
(Updated at 5:45 p.m.) When Braylon Meade died in a car crash, a juvenile court judge handed down a sentence of one year of incarceration and two years of probation…
Are you looking for a flexible master’s degree that will help you advance in your career? Consider George Mason University’s Global Commerce and Policy master’s program! Broader than an MBA…
Velocity Bike Cooperative is hosting a grand opening for its new Arlington location this weekend. The location at 2647 N. Pershing Drive has been serving customers for a few months,…
🌿 𝐄𝐦𝐞𝐫𝐚𝐥𝐝 𝐌𝐚𝐬𝐬𝐚𝐠𝐞 𝐂𝐞𝐧𝐭𝐞𝐫: 𝐑𝐞𝐣𝐮𝐯𝐞𝐧𝐚𝐭𝐞 𝐘𝐨𝐮𝐫 𝐁𝐨𝐝𝐲 𝐚𝐧𝐝 𝐒𝐨𝐮𝐥 🌿Local business is the heart of a strong community, and at Emerald Massage Center, we’re proud to be a vital part of that heartbeat. Our passionate team of Licensed Massage Therapists is dedicated to providing you with a sanctuary of relaxation, rejuvenation, and renewal.🌟 𝐖𝐡𝐚𝐭 𝐖𝐞 𝐎𝐟𝐟𝐞𝐫 🌟Our wide range of massage services includes Swedish, deep tissue, prenatal, sports massage, hot stone, aromatherapy, and more — all tailored to your individual needs. Whether you’re seeking relief from stress, muscle tension, or chronic pain, our skilled therapists will help you achieve total wellness.🏆 𝐎𝐮𝐫 𝐂𝐨𝐦𝐦𝐢𝐭𝐦𝐞𝐧𝐭 🏆Your satisfaction is our top priority, and we’re committed to providing a clean, comfortable, and serene environment for you to unwind. We use only the highest-quality natural products to ensure a luxurious experience that nourishes your body and mind.💚 𝐒𝐮𝐩𝐩𝐨𝐫𝐭 𝐘𝐨𝐮𝐫 𝐋𝐨𝐜𝐚𝐥 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 💚By choosing Emerald Massage Center, you’re not only investing in your well-being but also strengthening our community. We appreciate your support and are grateful for the opportunity to serve you.Book your appointment today and discover the transformative power of Emerald Massage Center. Together, we can create a healthier, happier, and more connected community. 💆🏻♀️💆🏽🍃✨ Visit www.EmeraldMassageCenter.com to schedule your rejuvenating session now! ✨
Join MoCA Arlington Summer Camps at Marymount University and learn the fundamentals of handbuilding, throwing on a wheel, glazing, and much more. In this two-week course, students will explore hand building techniques, wheel throwing, and strengthen ideas that exemplify individual artist expression guided by professional working artists. Students of all skill levels are welcome!
Visit MoCA Arlington’s Website here and the registration page to secure your space today!
Homebuying 101: Steps to Getting Pre-Approved
Are you ready to jump into homeownership or started considering it but don’t know where to start? Financial preparation is key when thinking about purchasing your first home and the first step to getting pre-approved.
Join ACFCU’s mortgage loan officers
4th of July Celebration & Fireworks
Treat yourself this Independence Day with a world-class, private 4th of July extravaganza at the Military Women’s Memorial – a premier National Capital Region site.
Great food, fun, and the best views of Washington DC’s spectacular fireworks display. Relax, enjoy,