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: Did the volume of homes listed for sale recover after a slow spring/summer?
Answer: There has been a surge of new inventory coming to market since July. For condos, it has been historically high, by a wide margin, resulting in a 20% increase in 2020 over the 20-year average. While the single-family and townhouse listing volume has also spiked since July, overall, we’re just .5% above our 20-year average.
In July I wrote a column with charts showing how low Arlington’s listing volume was compared to the 20-year average, and I made some predictions that the inventory we lost in the spring/early summer would return in the late summer/fall. This week we’ll take a look at how those predictions played out and dig further into listing volume over the last four months and overall in 2020.
Inventory Comes Back, And More
Historically, March-June bring about the highest listing volume, but this year, due to COVID-19, many homeowners held off on putting their homes on the market. In July, I predicted that a lot of the “missing” inventory from March-June would be listed from July-October, which would result in a delayed spring market.
As it turned out, the number of condos listed from July-October FAR exceeded the amount of “missing” inventory from March-June, by nearly 3 times! For single-family homes and townhouses, July-October listing volume also exceeded the amount of “missing” inventory from March-June, but by a much smaller margin.
In the charts below, missing and excess inventory is calculated off of the 20-year average for monthly listing volume.
Condo Volume at Historical Levels, By a LOT
Just how extreme have the last four months of listing volume been in the condo market? There were 801 condos listed for sale from July-October. Prior to that, the highest four-month listing volume was 650 units from April-July 2004.
Segmenting Listing Volume by Zip Code and Bedroom Count
Overall, the 2020 single-family home and townhouse listing volume is up just .5% over the 20-year average through October, and the 2020 condo listing volume is up 20% over the 20-year average through October.
Below are charts breaking down how changes in listing volume have been distributed by zip code and bedroom count. My theory, prior to charting the data, was that there would be a bigger increase in listing volume for smaller properties (1BR over 2BR condos, 2-3BR over 4BR-6BR single-family/townhouses), but it turned out to be the opposite. Go figure!
Current Supply Levels
The market has been able to absorb the extra single-family and townhouse inventory, despite it coming during a time of year with historically lower demand. However, the market hasn’t come close to absorbing the condo inventory, which continues to build at a rapid rate.
See the below chart of changes to Months of Supply (measure of supply and demand, higher MoS favors buyers) over the last three years between single-family homes and condos.
The result is that the single-family and townhouse market remains competitive, with prices remaining stable through the fall and winter, while the condo market shifts to a more favorable market for buyers, creating substantial downward pressure on condo prices.
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 DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. 703-390-9460.