Welcome to the new column, Kami’s Korner, where we will take a deep dive into Arlington’s condominium market by focusing on what’s coming next. From emerging developments to shifting trends, this space will spotlight the opportunities and insights shaping the future of condo living in Arlington.
I’d like to share some market insight. Let’s begin with a brief overview of the three upcoming Arlington condominium projects in the planning stages for Arlington…
- One Rosslyn: Approximately 70 units, Average Size 1800 sq ft, 1 Bed + Den – 3 Bed
- 1501 Langston Blvd: Approximately 90 units, Average size 1700 sq ft, 1-3 Bed
- Potomac Overlook (Formerly Key Bridge Marriott): 100 units+, Average Size 2000 sq ft, 1 Bed + Den – 3 Bed+
All three projects will have the benefit of the extended building height afforded in Rosslyn over DC and the rest of Arlington, and therefore will be built in concrete and boast Potomac River/DC views.
Concurrently, the target market for many of these includes urbanized singles and couples as well as downsizing empty nesters. The baby boomer generation has raised their children in Northern Virginia and they want to be rid of the suburban house. They would have done it years ago but there wasn’t a for-sale option that suited due to the interruption of COVID-19. Arlington has everything they want, and they don’t have to uproot their personal or social lives to make a lifestyle change. They have significant equity in their homes, have built financial wealth, and are essentially unaffected by interest rates. They can pay cash for what they want.
Condominiums designed for this luxury group are some of the only condominium projects that work in today’s market due to several converging factors. The first is that construction costs are up 30%+, and concrete is one of the most expensive components. They skyrocketed after COVID-19, and although they are no longer rising as steadily, they are stubbornly elevated. Most existing condo stock in Arlington could not be built today for what they are currently selling for in the marketplace.
The second factor is that project financing is tied to interest rates. Yes, the project developer has to borrow money to fund construction; homebuyers are not the only ones impacted by interest rates. Luxury buildings with world class design produce strong returns. Those projects pencil. The cost to borrow money affects the developer and the end user. The younger buyer is in a tough spot.
The third factor is that empty nesters love to purchase well in advance, especially during pre-sales, which minimizes risk to the developer. Purchasing a few years ahead of delivery grants the buyer the luxury of time and proper planning. It allows them to get the unit type they want, select among the best floor plans, and then yields them time to complete the sale of their home, dispose of personal belongings, and tell the kids or grandkids. It also helps the more enthusiastic partner work on the more reluctant one since it’s not so immediate.
Let’s explore why Rosslyn makes the most sense. As mentioned in the previous post, Rosslyn has its share of true luxury condominiums already established by way of Turnberry Tower and Pierce. It’s a proven market and the neighborhood is now thought of as THE urban luxury housing location. Rosslyn has height, views (maybe the best in the DC area) and of course, proximity to DC. Will the Arlington empty nester pay for a great monumental view? You betcha.
The three large projects coming to Arlington, specifically Rosslyn, will be primarily luxury offerings due to economic, location, and market factors. For those of you who have been waiting too long (and are really tired of your house!) you will have some options coming your way in the next cycle.
Until next time, cheers from Kami’s Korner.
Kami Kraft
Do send along your questions, inquiries, and design preferences for the next generation of condominiums to our market. My personal email is: [email protected]
