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: Can you provide an update on how the condo market is doing?
Answer: Arlington’s condo market began shifting in favor of buyers this summer, after two years of a very strong seller’s market, when historical numbers of condos began hitting the market at the same time demand subsided. I’ve written about these changes four times since (falling values, visualizing high inventory, first signs of a trend, and first signs of a shift).
November Might Be a Turning Point
For the first time since June, we’ve seen a reduction in the Months of Supply (MoS) of Arlington condos. Months of Supply is a great measure of supply and demand (lower MoS = stronger market with higher demand and less inventory).
While the reduction in MoS is slight, it’s a positive sign nonetheless that the market is either closer to finding its level again or may soon show signs of strengthening. However, one month, particularly a winter month, is not enough to establish any real change, we will need to see what the next three to six months bear.
Multiple Key Indicators Show Positive Signs
My hope for a settling or strengthening of the condo market is not solely based on one metric. There are other key metrics that suggest November may be the first month of a settling or strengthening condo market.
Absorption Rate (Figure 2), a measure of demand, increased ever-so-slightly in November, the first increase since May, albeit still down nearly 68% from the December 2019 Absorption Rate.
The number of condos for sale during November decreased for the first time since May (Figure 3), albeit slightly. The better news, however, is that the decrease in total condo inventory doesn’t seem to be caused by frustrated sellers pulling their condos off the market, rather due to promising contract activity (Figure 4), which was up 41% year-over-year in November.
Looking Ahead, Eyes on March to May
Over the next few months, I’ll be looking closely at whether these trends (stronger demand, falling inventory) continue, find a level or revert back to what we’ve seen since this summer. I’ll be particularly interested in what year-over-non-COVID-year numbers look like and if we settle into normal spring activity for inventory and demand.
For example, while the charts above are positive indicators for the condo market, Figure 5 shows just how much inventory (new listings) is still coming onto the market, with November generating nearly 79% more condo listings in 2020 than in 2019, but only a 41% increase in contract activity.
I think March to May 2021 are going to be very interesting months, statistically speaking, and will be excellent indicators of what the market might look like for the next few years, until the next major market event (e.g. Great Recession, Amazon HQ2, COVID). I think/hope that by then, we will also have a better understanding of how the Federal Government and private companies will address teleworking beyond COVID and thus whether commute time will be prioritized differently by buyers.
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.
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The 44th Leeway Overlee Community Day and Yard
Sale will be along the John Marshall Drive/Ohio Street greenway on
Saturday, June 3 from 9 a.m. until 1 p.m. The community will be out in
force to exchange information and greetings, sell unneeded household
items, and pick up a few bargains.
About 100 families set up tables for the festivities, which take
place along the six-block stretch of the greenway from near Langston
Blvd. to Washington Blvd. Attendance is free, but
a $10 fee will be collected from individuals and families selling
household items during the event. Ensure that all goods and rubbish are
removed from the greenway by 1 p.m. Leave dogs at home.
For more info, call 703-532-6101. If planning to sell, start labeling
your items for sale NOW! Event will take place as long as there is not
active rain. Rain date is June 10.
36TH FESTIVAL ARGENTINO
ARLINGTON JUNE 3RD, 2023
Sat, June 3rd I 3:30 pm / Shows 5:50 pm I Kenmore Auditorium I Glencarlyn
The 36th Festival Argentino USA celebrates Argentine Day and Cultural Freedom. The folkloric group Los 4 de Córdoba and 25 more artists from Argentina, World, and Solidarity Tribute, 200 years of friendship between USA and Argentina!.
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,