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 Eli Residential channel. Enjoy!
Question: How did the Arlington condo market perform in 2022?
Answer: Last week, I detailed the 2022 Arlington Single-Family market performance so this week we’ll do a deep dive into Arlington’s 2022 condo market performance.
Like the rest of the housing market, the condo market started the year off strong due to low interest rates and a return to more normal condo buying habits, after the flight from condos seen during the ’20-’21 pandemic years. Despite the interest-rate driven slowdown in the second half of the year, the aggregate performance of the condo market in 2022 was flat to slightly up, depending on how you look at the data.
The Condo Market Has Returned to Normal…
What is a normal condo market in Arlington? It’s hard to remember what a normal condo market looks like because we haven’t seen one since ~2017/2018. The market went red hot at the end of 2018 after the Amazon HQ2 announcement until being frozen by COVID in early 2020 and then from summer ’20 through 2021 we saw a flood of condo inventory hitting the market as people left for more space, which kept prices from increasing like the single-family and townhouse market.
So what is normal? Normal is about 1-2% annual appreciation and an average over 30-45 days on market. When you strip out the gains related to more expensive new construction condos being sold and just look at resales of existing condos, you’ll see that the long-term norm for Arlington apartment-style condos is a modest 1-2% annual appreciation.
…Except Inventory Levels
However, there are some signs that we might see stronger appreciation in 2023/2024 due the supply of condos for sale trailing well behind the 10yr average. The chart below highlights just how extreme the transitions were into the post-Amazon HQ2 announcement market (Nov’18) and then into the COVID market. With a very weak pipeline of new condo deliveries in Arlington, supply will come from an already limited inventory of existing condos for sale and should create some upward pressure on pricing.
Data Highlights and Analysis
The following data is for apartment-style/multi-family condos (aka buildings only, excluding townhouse-style condos like you see in Fairlington) and does not include age-restricted condos (The Jefferson) or Coops (Riverplace). All prices are based on net sold price (purchase price less any seller-paid closing cost credits):
- The average price of an Arlington condo increased by 2.6% to $502,000 and the median price increased 1.7% to $427,000. If you remove new construction sales from the data, the average price increased by only .6% to an average price of $463,000.
- The average 1BR condo increased .1% with new construction included and .7% without new construction included. The average 2BR increased 5.4% with new construction as opposed to just 1.3% without new construction (2000 Clarendon had a lot of 2BR units).
- Since 2018 (five years), condos have appreciated by just 10-20%, depending on the sub-market you’re looking at and data you’re using, and almost all of that growth came in the ~12-14 months between the Amazon HQ2 announcement and COVID lockdowns. That appreciation drops by almost half when you remove new construction from the data. Single-family homes have appreciated about 2-3x+ faster over the last five years.
- Most of the 5yr price appreciation of the 2BR and North Arlington market segments is due to higher priced new construction buildings that have come online during that time and not actual price growth. When removing new construction, the 5yr growth for a 2BR drops from 20.1% to 10.5% and for North Arlington from 18.1% to 9.9%.
- Over the past five years about 2% of condo sales have been studios (no legal bedroom), 39% 1BR, 51% 2BR, 8% 3BR, and ~.5% have been 4+BR.
“Standard” Condos in Rosslyn-Ballston Corridor Haven’t Budged
A lot of similar condo inventory was built in the early 2000s along the Rosslyn-Ballston corridor so it gives us a unique opportunity to look at a large, relatively similar data set. The chart below looks at net sold prices of 650-800 SqFt 1BR and 900-1200 SqFt 2BR condos that were built between 2000 and 2010 along the R-B corridor. This sub-market makes up about 11% of total condo sales in Arlington over the past five year.
Since the Amazon HQ2 driven appreciation from 2018-2019, the value of these condos has barely moved and in the case of the 2BRs, the average net price has actually fallen slightly each year since 2019. I expect appreciation to look better over the next five years, barring any jarring market forces like COVID.
Condo Market by Zip Code
- The Rosslyn market, carried by luxury buildings like Turnberry, Waterview, Wooster and Mercer Lofts, Gaslight Square, and the newly built Pierce, is the most expensive zip code for condos by a significant margin.
- For those looking to snag a piece of real estate near Amazon HQ2, condos in the 22202 zip code are still reasonably priced but come at a cost of the highest monthly condo fee per square foot in Arlington.
- 22207, one of the most expensive zip codes for single-family homes, is the second lowest $/SqFt of any zip code for condo purchases. This will probably be a deterrent for developers of Missing Middle who are considering building 5-6 unit multi-family buildings vs townhouse-style duplex/triplex properties.
If you’d like data pulled for a sub-market you live in or are considering buying into, don’t hesitate to reach out!
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 Eli Residential channel.
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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About Latinas Leading Tomorrow (LLT): Latinas Leading Tomorrow is a dynamic 501(c)(3) nonprofit organization dedicated to empowering young Latina women through education, mentorship, and leadership development. We are committed to fostering a community of future leaders who will make a significant impact to the community.
Job Description: We are seeking a passionate and dedicated Part-time Executive Director to lead our organization into its next phase of growth and impact. The ideal candidate will be a visionary leader who can oversee day-to-day operations, drive fundraising efforts, and cultivate relationships with stakeholders. This is a 1099 position; Remote position with ability to attend DMV events; 8-10 hours a week; $35-40/per hour.
Oversee program operations, including educational and community initiatives.
Ensure compliance with legal and regulatory requirements, maintaining trust and accountability.
Develop and execute a strategic vision aligned with our mission and values.
Lead fundraising efforts in partnership with the Board Members.
Cultivate relationships with community partners, schools, educators, and donors.
Demonstrate strong leadership skills, fostering a positive organizational culture.
Communicate effectively with diverse stakeholders and make compelling public presentations.
Promote inclusivity and collaboration throughout the organization.
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!
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