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. Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist. Enjoy!
Question: How did the single-family housing market perform in the first quarter of 2022?
Answer: At the end of last year, I expected a strong single-family market, but didn’t think the market had this much appreciation left in it. Sure enough, by the 2nd week of January, we were regularly seeing escalations of 10% or more over asking prices (that were set on last year’s prices) and despite headwinds from higher interest rates, the Ukrainian war, and inflation, the single-family housing market maintained the early momentum through the first quarter.
Intense Competition in Every Market Segment
I pulled data for sold single-family homes that were listed for sale after January 1, 2022, excluding new construction, in Arlington, Fairfax County, and Alexandria, Falls Church, and Fairfax Cities (Fairfax County+) and the data is pretty incredible.
- The average, yes AVERAGE, home in Arlington and Fairfax County+ sold for 6.3% over the asking price
- Over 27% of homes sold for 10% or more above the asking price
- Homes listed for $750k-$1.499M sold for an average of at least 7% over the asking price
- In Arlington, 85% of homes went under contract within one week on market and 95% were under contract within two weeks
- It takes getting to an asking price of $2M+ before the average home sells below asking
- The days of getting sellers to (help) pay for buyer closing costs are long gone, with only 4% of Arlington sales and 6% of Fairfax County+ including any seller credit
- The average Arlington home sold for over $1.24M and the average Fairfax County+ home sold for over $1M
Months of Supply Explains Why
The easiest way to explain why we’re seeing such fierce competition and price appreciation is the Months of Supply (MoS) chart. MoS is a measure of supply and demand, showing how long the current inventory would last, based on the existing pace of sales. Fairfax County and Arlington had just two and three weeks of supply, respectively, in the first quarter. Six months of supply is what economists say is needed for a well-balanced market.
Without a surge in listing volume, which seems highly unlikely given how difficult and expensive it is for people to find their next home, the only thing that can balance out supply is a significant drop in demand, which there are few signs of to-date.
Significant Year-Over-Year Appreciation
The year-over-year appreciation for homes that closed in the first quarter in Arlington was 7.8% and 13.2% in Fairfax County.
The gap between the value of homes in Fairfax County and Arlington is also closing as buyers seek more value. In Q1 2019, Arlington homes sold for 27.3% more than Fairfax County homes and just three years later, Arlington homes are selling for just 17% more.
New Listing Volume Decreasing
Competition is not being driven just by high demand, but by low listing volume. The number of homes listed for sale in Q1 2022 was well below what we’ve seen in each of the last five years, which was preceded by a slow Q4 2021.
Expect demand and competition to continue through the second quarter, despite headwinds, because there’s such a wide gap between supply and demand. Higher rates may push some buyers into lower price points, but they’re likely to be replaced by buyers dropping down from the price point above that. The second quarter tends to be the most competitive and bring about the most appreciation. It will be interesting to see if prices continue to rise from Q1 levels or if they stabilize at these levels through the rest of the year.
The second quarter also brings about the most new listings each year and we can expect that trend to continue, although it will likely remain below the five year average for second quarter inventory, which means we shouldn’t expect to see any “progress” in the supply-demand gap.
If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].
If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at 703-539-2529.
Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.
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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Good Wednesday evening, Arlington. Let’s take a look back at today’s stories and a look forward to tomorrow’s event calendar. 🕗 News recap The following articles were published earlier today…
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Children’s Weekday Program (CWP) is a non-profit preschool rooted in a play-based philosophy. We focus on developing a love of learning and exploration, cooperation, empathy, and independence.
Our caring and experienced educators create opportunities for children 16 months to 5 years old to play, learn, and grow in a nurturing environment of child-centered and developmentally appropriate experiences.
Initially established more than 50 years ago in South Arlington, CWP continues to be a lauded program in the Northern Virginia area. We are extremely proud to have been recognized as a Best Preschool in Northern Virginia Magazine for the last 4 years.
Located now in North Arlington at 2666 Military Road, CWP offers a part-time parents day out and preschool program with options to extend care both before and after school. We offer a supportive and inclusive school community for children and parents alike and welcome all families to join our school!
The Optimist Club of Arlington is holding its 77th annual Christmas tree sale!
This year, the tree sale will be held at the Knights of Columbus (5115 Little Falls Road). The lot opens for sales on November 24th. The Optimist Club is selling small and large trees ranging from tabletop size to 10 foot tall trees! Wreaths, garland, tree stands, and White House Christmas ornaments will also be for sale.
100% of all proceeds go towards helping Arlington County youth.
For more information, please visit the Arlington Optimists website at https://optimistclubofarlingtonva.org/.
Holiday Art Show featuring artists: Peter Fitzgerald, Claire Plante, Alanna Rivera, and Suzy Scollon. At the Barcroft Community House, 800 South Buchanan St., Arlington, VA. Dec. 8 from, 2 PM to 8 PM and Dec. 9 from 10 AM to
2023 Christmas Tree Sales Begin
Saturday, December 2
Get your holiday decorating off to the right start this year! We will be selling 150 Fraser firs, freshly cut and delivered from Sparta, North Carolina.