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: How is the real estate market doing so far this year?
Answer: 2020 ended with a surging single-family and townhouse market, especially farther west from buyers looking for more house and yard space, but a struggling condo market from an unusually high volume of condo inventory for sale and tepid condo demand. So what have we seen in the first six weeks of the 2021 real estate market?
Single-Family and Townhouse Prices Up
The single-family and townhouse market is appreciating even further above where prices settled in 2020, with more competition (double-digit multiple offers). Through deals I’ve been involved in and conversations I’ve had with colleagues, my unofficial estimate is that many single-family homes and townhouses are selling for 5-10% more than 2020 prices. I’m seeing this type of appreciation at all different price points, too.
Condo Market Better, Slow Improvement Expected
The condo market worsened monthly from about June 2020 to November 2020, but it reversed course a bit in December and remained slightly improved in January. I see the condo market picking back up at a slow pace and likely to continue improving through the spring as demand hopefully/probably picks up, but I don’t see a return to the pre-COVID condo market any time soon.
Let’s take a look at some key charts for Arlington and Northern Virginia (Fairfax and Loudoun counties).
Arlington Months of Supply
Months of Supply is one of my favorite metrics because it combines supply and demand. The lower the Months of Supply, the more favorable a market is for sellers. Housing economists say that a well-balanced market has about six months of supply.
Single-family homes in Arlington hit an all-time low for Months of Supply in December and January, coming in at just a touch over one month, while the condo market has settled into just under 2.5 months of supply, which is about average for Arlington condos, save the two years after the Amazon HQ2 announcement.
New Listing Volume in Arlington
The number of condos listed for sale in January remained high, coming in 66.7% higher than January 2020. The number of single-family homes listed for sale remained stable, with an increase of just 11.9% over January 2020.
Dramatic Shift in Fairfax and Loudoun
If you think buying a house in Arlington is difficult, just try buying a house in Fairfax or Loudoun County, where single-family Months of Supply has dropped below one month to two to three weeks! This represents a much bigger shift in market conditions than what we’ve experienced in Arlington, which has been more competitive for longer.
Northern Virginia Condo Supply
All three Northern Virginia counties charted below (Arlington, Fairfax and Loudoun) have seen a spike in condo supply over the last 6-plus months, but condo absorption has actually increased by enough in Loudoun County to not only offset the increased supply but to also cause Months of Supply to drop to 10-plus year lows of two weeks. Arlington County and Fairfax County have gone the other direction, with significantly higher Months of Supply.
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.