Ask Eli

This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at [email protected].

Question: How much of a difference do schools make in the value of homes in Arlington?

Answer: I hope all parents, students, and teachers had a great first week back at school! If you enjoy reading my columns, I would appreciate your vote for top real estate agent in Arlington Magazine’s “Best Of Arlington 2026” poll. Use this link to vote, and don’t forget to include your other favorite local businesses and service providers. These recognitions mean a lot to local businesses.

Nothing drives home values like schools and for most buyers around here, that is based on the ten-point ratings scale on from GreatSchools.org. Let me be clear, this article is not meant to validate or challenge the quality of GreatSchools ratings, rather, it’s an acknowledgement of the weight the website’s ratings has on home buyer decisions and, therefore, home values.

Tips for Using Schools in Your Home Search

• Families define a “good school” differently. Whether that’s test scores, socioeconomic diversity, language instruction, athletics, or a STEM focus think about what matters most to you and target schools that fit your values.
• GreatSchools offers more than just a single rating, they offer component data as well. Dig deeper and look at the components of a school’s rating and review them based on what you value.
• I know parents who have had both excellent and terrible experiences at top and low rated schools alike. The GreatSchools rating is not everything.
• There are excellent public resources available for research including the Virginia Dept of Education’s School Quality Profiles and information nights for each school where you can see a school and interact with teachers first-hand
• There are numerous message boards with loads of information about school operations like disability support, college readiness, and athletics
• There are other private ratings websites like Niche.com and US News and World Report that offer different perspectives and ways of ranking schools
• Arlington County has an A+ grade from Niche.com, ranking as the #2 school district in Virginia, just behind Falls Church City. Loudoun County ranks #4 and Fairfax County ranks #6 in Virginia, each with an A grade.

Analyzing Arlington Homes by GreatSchools Ratings

If school ratings are an important focus for you, you can use the table below to figure out what the most efficient use of your budget is to maximize your GreatSchools rating per dollar spent. In the table, I calculate the cost per GreatSchools rating point, based on the average price of a 3+ bedroom home in that school boundary.

The data uses sales since January 1 2024 of homes with at least three bedrooms, including condos (condos make up only about 5% of the total sales in this data set). Only neighborhood schools are included in this analysis, not the magnet/option schools.

• The lowest cost per GreatSchools point elementary schools are Barcroft (7), Glebe (9), and Tuckahoe (9)
• The lowest cost per GreatSchools point middle school is Gunston (7), followed closely by Kenmore (7)
• The lowest cost per GreatSchools point high school is Yorktown (9)
• The most expensive school to buy housing in on a total cost basis is Jamestown Elementary (8), but the most expensive per bedroom is Innovation Elementary (6)
• The least expensive school to buy housing in on a total cost and price per bedroom basis is Abingdon Elementary (3)
• Alice West Fleet (6) is the only school with a GS rating over 4 and average home price under $1M
• Ashlawn Elementary has the most homes sold (158) with 3+ bedrooms since 2024 and Hoffman-Boston has the least (44)
• It costs about 60% more to buy a 3+ bedroom homes in Arlington’s highest rated high school boundary (Yorktown, 9) compared to its lowest rated high school boundary (Wakefield, 4). The Wakefield HS boundary is the only high school market with an average sold price of a 3+ bedroom home under $1M.

If you’d like some more personalized data run for you using home sales and GreatSchools ratings, you’re welcome to reach out to me at [email protected]. I’m happy to help.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].

 

We have access to the most pre and off-market listings across the DMV of any brokerage and are happy to share what’s available with anybody who asks.

Below are some of our team’s pre/off-market listings, details and additional listings available by request:

• Rosslyn 2BR/2BA/1,100 sqft – condo (2008) – 1800 Wilson Blvd Arlington VA 22201
• Rosslyn 2BR+den/2.5BA/2,000 sqft – condo (2021) – 1781 N Pierce St Arlington VA 22209
• Ballston – 4BR/3.5BA+office/4,000 sqft – Four Townhouses (2026/2027) – 11^th St N Arlington VA 22201
• Falls Church City – 4BR/4.5BA/3,000+ sqft – End-unit townhouse (1995) – Rees Pl Falls Church VA 22046
• Rosslyn – 2BR+den/2.5BA/2,000+ sqft – Condo (2021) – 1781 N Pierce St Arlington VA 22209
• Highland Park/Overlee Knolls – 6BR/5.5BA/5,000+ sqft – Detached Single Family (2025) – 22^nd Rd N Arlington VA 22205

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at [email protected].

Buyers now have more negotiating power, more choices, and…lower interest rates! Whether you are a new or experienced homeowner, come learn about the market and how our team positions buyers for success.

On Monday September 8, I’ll be hosting another Ask Eli Home Buyer Workshop with my business partner Jean Ropp and local Loan Officer, Matt Ropp, with Atlantic Coast Mortgage. Food and drinks will be provided!

The workshop is a free and will cover:

• How to use data and strategy to maximize your home purchase
• How to use market trends to your advantage
• The latest on interest rates and mortgage programs/products
• Common mistakes to avoid and some tips for success

Who is it for?

• Any buyer type from first-time buyer to experienced buyers
• Ready to purchase now or planning 12+ months out
• Home buyers in Northern VA, DC, or the Maryland Suburbs
• You or anybody you know who would benefit

Where and When?

• Monday September 8 from 6-7:30PM
• Arlington Central Library (1015 N Quincy St), Bluemont Room

Registration is now open and space is limited. Click the graphic below to RSVP. Bring your appetite and your home buying questions! I’d love to see you there. Feel free to email me at [email protected] with any questions about the event.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].

We have access to the most pre and off-market listings across the DMV of any brokerage and are happy to share what’s available with anybody who asks.

Below are some of our team’s pre/off-market listings, details and additional listings available by request:

• Rosslyn 2BR/2BA/1,100 sqft – condo (2008) – 1800 Wilson Blvd Arlington VA 22201
• Rosslyn 2BR+den/2.5BA/2,000 sqft – condo (2021) – 1781 N Pierce St Arlington VA 22209
• Ballston – 4BR/3.5BA+office/4,000 sqft – Four Townhouses (2026/2027) – 11^th St N Arlington VA 22201
• Falls Church City – 4BR/4.5BA/3,000+ sqft – End-unit townhouse (1995) – Rees Pl Falls Church VA 22046
• Rosslyn – 2BR+den/2.5BA/2,000+ sqft – Condo (2021) – 1781 N Pierce St Arlington VA 22209
• Highland Park/Overlee Knolls – 6BR/5.5BA/5,000+ sqft – Detached Single Family (2025) – 22^nd Rd N Arlington VA 22205

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at [email protected].

Question: Is it a good time to buy a condo in Washington DC?

Answer: Unless you think that the Washington DC economy is heading for a death spiral, it could be a great time to acquire excellent value in the DC condo market.

Asking Prices Are Lowest in 10+ Years

The average asking price of condos listed for sale in July was lower than it’s been at any time in the past ten years. In July 2025, DC condos were listed for an average price of $552,000. Prior to this summer, the lowest average monthly asking price for a DC condo over the past ten years was in August 2016 at $583,000, 5.6% higher than July 2025 asking prices.

The narrative improves slightly using median price, with a July 2025 median asking price of $450,000 compared to an August 2015 median asking price of $435,000.

In either case, average or median pricing, the data suggests buyers can buy DC condos at prices similar to 10+ years ago.

Buyers Have Nearly 3x More Options to Choose From

Buyers in DC will find nearly 3x more condos being offered for sale than the market has averaged over the past ten years, which means more opportunity to find the right property and find a seller ready to strike a great deal.

High Days on Market = Significant Buyer Leverage

The longer a property sits on the market, the more leverage buyers have to negotiate the price. The chart below shows the average sold price relative to the original asking price based on how long a property was on the market before going under contract, in Washington DC.

Homes that sell within the first ten days average above asking price. Once a home has been on the market for 30 days, buyers pick-up significant leverage, with an average of 5.7% and 7.6% off the original asking price for homes on the market 31-60 days and 61-90 days, respectively.

If you want to understand just how much leverage buyers have on DC condos right now, the days on market data tells the story:

· As of Monday August 18, there were 1,224 condos for sale in Washington DC

· Of those condos, the average time on market is 113 days and median time on market 82 days

· 996 (81.4%) have been on the market for 30+ days and 506 (41.3%) have been on the market for 100+ days

Don’t Get Blindsided by DC’s Tenant-Landlord Laws

Washington DC is a very tenant-friendly jurisdiction and it’s important that you understand the requirements and limitations placed on landlords in DC if you plan to invest and rent property in the District. I’m far from an expert on DC tenant-landlord laws and property management, but highly recommend connecting with my colleague, Michael Hangemanole, if you have any questions or need Property Management/Rental services in Washington DC. He can be reached on his cell at (240) 483-7255 or by email at [email protected], and is more than happy to talk to any readers about DC property management, the rental market, and landlord-tenant laws.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].

Upcoming (pre-market) ERG Listings, Details and Additional Listings Available by Request

• Ballston – 4BR/3.5BA+office/4,000 sqft – Four Townhouses (2026/2027) – 11^th St N Arlington VA 22201
• Falls Church – 5BR/3BA/2,170 sqft – Detached Single Family (1950) – Bolling Rd Falls Church VA 22042
• Falls Church City – 4BR/4.5BA/3,000+ sqft – End-unit townhouse (1995) – Rees Pl Falls Church VA 22046
• Yorktown – 6BR/6.5BA/6,000+ sqft – Detached Single Family (2026) – N Greencastle St Arlington VA 22207
• Rosslyn – 2BR+den/2.5BA/2,000+ sqft – Condo (2021) – 1781 N Pierce St Arlington VA 22209
• Highland Park/Overlee Knolls – 6BR/5.5BA/5,000+ sqft – Detached Single Family (2025) – 22^nd Rd N Arlington VA 22205

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at [email protected].

If you enjoy reading my columns, I would appreciate your vote for top real estate agent in Arlington Magazine’s “Best Of Arlington 2026” poll. Use this link to vote, and don’t forget to include your other favorite local businesses and service providers. These recognitions mean a lot to local businesses.

Question: How has buyer agent compensation changed since the laws changed last year?

Laws Changed One Year Ago

You probably recall hearing all about the class-action lawsuits and settlements last year that made it illegal for sellers and brokers to offer buyer agent compensation through the MLS. In fact, many argue that the law makes it illegal for sellers and brokers to offer a set buyer agent compensation at all. I wrote about the changes here, if you want a refresher.

The laws went into effect one year ago, in August 2024. They were a huge deal within the industry and captured months of news headlines.

The Mechanics Changed, The Market Has Not

In October, I wrote an article clarifying some misunderstandings and shared my observations that little had changed in the market, with most transactions including seller-paid buyer agent compensation.

After a full year, including a spring market (albeit less competitive than usual), the results of the settlement have caused little change for consumers and in the industry.

• The Mechanics Changed: Prior to August 2024, in nearly all transactions, the seller agreed to a set compensation for the agent representing them and an agent representing the buyer. The buyer agent compensation was entered into the MLS listing and became enforceable. Now, any seller-paid buyer agent compensation is enforced through the sales contract and must be agreed to during buyer-seller negotiations. If it’s not in the contract, it’s not payable.
• The Market Has Not: Prior to the new laws, nearly all transactions included seller-paid buyer agent compensation and in 2022 the average buyer agent comp in Arlington was 2.54% with over 80% of transactions including 2.5 seller-paid buyer agent comp. Based on our team’s experience, brokerage data, and regional/national surveys the market is still operating in a very similar manner, with sellers covering buyer agent compensation in the vast majority of transactions and the average hovering around 2.5%.

In May 2025, Redfin published some great data on this (charts below), showing that the average buyer agent compensation had dropped from 2.51% in Q1 2023 to 2.4% in Q1 2025. Much less of a drop than many expected. Their data does show that the average commission percentage is about one-third percent less for homes sold for $1M+ than those sold for under $500k.

Their data does not indicate what percentage of these transactions/fees were paid by the seller, but their sub-header in the same article states “most sellers are still paying buyer agent commissions” which is exactly what I’ve seen over the past 12 months, what our brokerage of ~450 agents in the DC Metro has found surveying every transactions, and what I’ve heard from numerous lenders, title attorneys, and appraisers who have insight into thousands of regional transactions.

We Have a Data Transparency Problem

One of the trade-offs made with these new laws was losing transparency and reporting on seller-paid buyer agent commissions. Prior to 2024, when this information was entered into the MLS, all agents, brokers, appraisers, etc could easily pull buyer agent commission data for individual transactions or for an entire market (like I used to do for Arlington).

Without transparency into how much seller-paid buyer agent commission was included in a transaction, we run into challenges with property valuations aka “comparables.” While studies and experience suggest that a given sale most likely included 2.5% seller-paid commission, that’s probably true for about 2/3 of transactions these days and the others vary from less to more to none. So, the housing marketplace lost valuable insight into market values when we removed buyer agent comp from the MLS because sale prices will vary if the seller is paying 2.5-3% to a buyer agent vs nothing.

Note: other MLS’s may track this but Bright MLS (second largest in the country, covers most of the Mid-Atlantic) does not have a good method for doing so.

Frankly, I’m shocked the banks haven’t had more to say about this because their appraisers are missing information that contributes to a 0-3% shift in valuations that they use to make lending decisions.

My understanding of why they don’t want to collect this data is they don’t want individual buyer-seller decisions to be influenced by what the rest of the market is doing. I sympathize with that position, but there are plenty of other ways to access and understand what the rest of the market is doing, so consumers and agents who want the data will get it anyway. It’s also important for consumers/agents to know what competing listings are offering and what decisions past sellers have made that lead to success in their market. The loss of data transparency/reporting is a significant loss for the market.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at [email protected].

Question: How has the rental market performed so far in 2025?

If you enjoy reading my columns, I would appreciate your vote for top real estate agent in Arlington Magazine’s “Best Of Arlington 2026” poll. Use this link to vote and don’t forget to include your other favorite local businesses and service providers. These recognitions mean a lot for local businesses.

Rental Prices Across Arlington Continue Higher

Local job uncertainty and economic headwinds were no match for rental prices in Arlington so far in 2025, with the average price of renting an apartment (condo), townhouse/duplex, and detached home all up and competition high across all three property types.

Over the past five years, the average rent price in Arlington is up 27.3% across all property types and 25.2% on a price per square foot basis. So far in 2025, the average price of all rentals is up 1.2%, but the average price per square foot is up 6.9%, which is likely a better reflection of actual rental price increases in 2025.

You can see my mid-year analysis on the for sale market for detached homes and condos, here and here.

Highlights and Data Table

Here are some highlights from the data table (keep in mind that 2021-2024 includes 12 months of data, but 2025 is just 7 months of data):

• The average rent for an apartment (condo) is up 5.9% compared to last year and up 29.6% over the past five years
• The average rent for a detached home is up 2.1% compared to last year and up 23.4% over the past five years
• The average rent for a townhouse/duplex is up 2% compared to last year and up 22.8% over the past five years
• The five year increase in average rent for apartments (condos) and detached homes is much higher than the increase in average price to purchase a condo (6%) and detached home (15.5%) over the past five years
• While the average price of renting in North Arlington is about 16% higher than is South Arlington, the rate of annual rent growth is similar across both regions of the county
• Renting a detached home or townhouse/duplex was moderately more competitive than renting an apartment (condo), with nearly 50% of detached and townhouse/duplex properties renting within ten days on market, compared to just over one third of apartments

About the Data

The data above is rental data from the MLS in Arlington over the last five years. Note that very few commercial apartment buildings list in the MLS so this data is limited to non-commercially owned rentals (for apartments, that is mostly individually owned condos).

Further, it’s difficult to say what percentage of non-commercially owned properties go through the MLS for rent but I would guess that it’s about half of rented apartments (condos), but likely a majority if detached and townhouse properties. Despite the limited data set, we still have more than enough information available through the MLS to generate outputs that represent the true rental market.

Upcoming (pre-market) ERG Listings, Details and Additional Listings Available by Request

• Falls Church – 5BR/3BA/2,170 sqft – Detached Single Family (1950) – Bolling Rd Falls Church VA 22042
• Falls Church City – 4BR/4.5BA/3,000+ sqft – End-unit townhouse (1995) – Rees Pl Falls Church VA 22046
• Arlington Ridge/Aurora Hills – 3BR/2.5BA/2,450sqft – Detached Single Family (1961) – S Grove St Arlington VA 22202
• Yorktown – 6BR/6.5BA/6,000+ sqft – Detached Single Family (2026) – N Greencastle St Arlington VA 22207
• Rosslyn – 2BR+den/2.5BA/2,000+ sqft – Condo (2021) – 1781 N Pierce St Arlington VA 22209

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at [email protected].

TL;DR Video Summary (2:42):

Question: How has the Arlington condo market performed in the first half of 2025?

Answer: The condo market is more susceptible to downturns in the housing market because condo buyers can almost always find a suitable alternative by renting an apartment, if buying loses its appeal. With high interest rates and uncertain local economic conditions in the first half of 2025, the Arlington condo market suffered a loss in value, unlike the detached single-family market, and is having one of its worse years in the past two decades.

Prices and Competition Down in the First Half

Let’s look at the performance of Arlington’s condo market in the first half of 2025 compared to the first half of the previous four years:

• The average price of a condo fell by 10%, to just over $508,500, and the average $/SqFt fell by 4%
• The median price of a condo fell by 7.5%, to $439,000
• Demand fell sharply with just 39% of condos selling within the first ten days on market and just 39% selling for at or above the asking price
• After significant price gains in 2024, seller optimism was high heading into 2025 and the initial asking prices reflected that. Low demand led to substantial discounts off the initial asking price, with condos selling for an average of 5.3% below the original ask, compared to about 1% each if the past four years.
• Most of the losses seem to come from the two-bedroom condo market, where the average price dropped by 7%, compared to a 1% drop in the one-bedroom market

(more…)

This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at [email protected].

Question: How has the Arlington single-family housing market performed in the first half of 2025?

Answer: Despite significant headwinds from DOGE cuts to Federal spending and workforce and a sluggish national housing market, prices of Arlington’s detached single-family homes continued their upward climb in the first half of 2025, compared to the first half of 2024, albeit at a slower pace and with much less competition.

Prices Up, Competition Down in the First Half

Let’s look at the performance of Arlington’s detached single-family home (SFH) market in the first half of 2025 compared to the first half of the previous four years (new construction sales not included in the data set):

• The average and median price of a SFH increased by 3.2% and 4% year-over-year, respectively
• Over the past five years, the average and median price of a SFH in the first half of the year increased by 15.5% and 17.9%, respectively
• The average SFH sold for more than $1,435,000, including new construction, and over $1,380,000 without new construction sales
• The median home price is $1.3M, including new construction, and $1,275,000 without new construction sales
• Demand and competition in the first half of 2025 fell to its lowest levels since the first half of 2020 (COVID spring):
  • only 54% of homes selling within the first ten days on market and just 55% of homes selling for at or above the asking prices, dropping from an average of 65% and 69% the previous four years
  • the average home sold for 0.3% below the original asking price, the first time the average home sold for below the original asking price in the first half of the year since 2020
• Homes that went under contract within the first ten days sold for an average of 2.5% over the asking price, down from 3.1% last year
• Just 25% of homes sold for less than $1M

Looking Forward

The rosy picture painted by the strong numbers detailed above hide a less optimistic truth. The dataset above accounts only for the homes that have sold, but inventory is building with homes struggling to sell and many are reducing their asking price. While the average Arlington detached home price increased 3.2% year-over-year, the average Arlington detached home listed for sale in Q2 was listed for 13% less than in 2024.

As these sellers run out of patience or experience financial pressure to sell, they may be forced to accept prices they previously would not have consider and I wouldn’t be surprised if the second half of 2025 tells a different story of home values than the first half.

With the inventory of detached homes in Arlington up 54.5% year-over-year in June and the second half of the year traditionally a better time for buyers than the first half, expect to see buyers with more negotiating leverage than they’ve had in years, through the end of 2025.

How the Data is Organized

For my mid-year reviews, I like to compare the first half of the year to the first half of prior years, rather than comparing the first half of the current year to the full year in prior years. We tend to see a stronger market (higher demand, more competition) in the first half of the year than the second half, so this approach gives us a better apples-to-apples comparison.

The data is organized by homes that went under contract in the first half of the year because it’s more reflective of actual buying activity during that period; as opposed to looking at homes that closed in the first half of the year, but may have gone under contract many months prior during different market conditions. I also use “net sold” price, which factors in any seller credits to a buyer, instead of just the standard sold price.

This year I removed new construction sales from the data (I comment on it separately) because it was incorrectly skewing the outcomes of the data.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].

Upcoming (pre-market) ERG Listings, Details and Additional Listings Available by Request

• Falls Church City – 4BR/4.5BA/3,000+ sqft – End-unit townhouse (1995) – Rees Pl Falls Church VA 22046
• Highland Park/Overlee Knolls – 6BR/5.5BA/5,000+ sqft – Detached Single Family (2025) – 22^nd Rd N Arlington VA 22205
• Arlington Ridge/Aurora Hills – 3BR/2.5BA/2,450sqft – Detached Single Family (1961) – S Grove St Arlington VA 22202
• Yorktown – 6BR/6.5BA/6,000+ sqft – Detached Single Family (2026) – N Greencastle St Arlington VA 22207

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at [email protected].

Question: How do I take advantage of the new 100% Bonus Depreciation tax benefit for my rental property?

Answer: You’ve probably heard that the tax provisions in the recent One Big Beautiful Bill Act brings back 100% bonus depreciation and how much this excites investors. Is this a windfall for all investment property owners? Who benefits? Let’s look past the headlines and dig into what 100% bonus depreciation means and who benefits.

I got input from my CPA, who I highly recommend, Matt Bormel of Bormel, Grice, and Huyett on the important details of 100% Bonus Depreciation. If you have questions about how you can take advantage of the new tax policy or would like general tax support, you can reach Matt by email at [email protected].

What is 100% Bonus Depreciation?

Depreciation is a cornerstone tax benefit for real estate investors, allowing the deduction of real estate assets/components over its useful life. For residential investment properties, owners are allowed to depreciate the value of the home in equal amounts over 27.5 years (referred to a straight-line depreciation).

Bonus depreciation turbocharges this by enabling the immediate deduction of qualified assets in the first year, greatly accelerating tax savings.

Qualified assets typically include components within a property that depreciate quicker than the overall structure, such as:

• Appliances
• Flooring
• Cabinets
• HVAC systems
• Landscaping and exterior improvements

What Qualifies for 100% Bonus Depreciation?

Land never qualifies for depreciation and the structure of a home (the “building”) does not qualify for bonus depreciation (depreciates over the aforementioned 27.5 years), but many components of the home do, as noted above.

There are two simple ways of categorizing how you can benefit from 100% bonus depreciation:

1. If you own an investment property and put a qualifying component in-service after January 19 2025, it qualifies for 100% bonus depreciation and will be deducted, like an expense, in year one.
2. If you purchase an investment property after January 19 2025, all qualifying components can receive 100% bonus depreciation treatment, but you need to perform a cost segregation study.

A cost segregation study is performed by professionals who analyze the property, classifying each component into shorter depreciation periods (5, 7, or 15 years) and assigning a value. It is highly detailed and meets specific IRS requirements.

Cost segregation studies cost thousands (or more, for larger properties) and are often too expensive to justify for a residential investment property. Yes, like most things, you can do one yourself or get it done cheaply, but you increase the risk of it being done wrong and running afoul of the IRS.

Don’t Forget about Depreciation Recapture

Depreciation recapture often surprises investors at the point of sale. When selling, the IRS “recaptures” depreciation deductions previously claimed, taxing these at a higher rate (typically 15-25%) than standard long-term capital gains. This can significantly reduce the net proceeds upon sale, making bonus depreciation primarily a tax-deferral strategy rather than permanent tax avoidance.

Who Benefits from Bonus Depreciation?

• High-Income Investors: Investors facing significant tax burdens stand to benefit dramatically, potentially saving tens of thousands of dollars immediately.
• Real Estate Professionals (REPS): Those qualifying under IRS guidelines can use these deductions against active income, creating substantial tax savings.
• Investors Experiencing High Taxable Events: Individuals who have realized large taxable gains (e.g., sale of businesses, large income events) can offset these through strategic bonus depreciation.
• Long-term Investors: Tax benefits improve for longer-term holding periods

Who Might Not Benefit?

• Low-Income Investors: Those without significant tax liabilities may not fully utilize immediate deductions.
• Short-Term Property Owners: Investors planning to sell properties soon may face accelerated recapture taxes, negating immediate savings.
• Smaller Property Owners: The upfront cost and complexity of a segregation study may outweigh the benefits.

Pros of Bonus Depreciation

• Immediate Tax Savings: Accelerating deductions enhances cash flow immediately
• Strategic Flexibility: Ideal for offsetting significant taxable income events
• Enhanced Investment Returns: Increased immediate liquidity can be leveraged into additional investments or debt reduction

Cons of Bonus Depreciation

• Upfront Costs: If needed, cost segregation studies involve high costs
• Recapture Liability: Tax rates change over time. Investors planning for the long-term must consider potential future tax increases, possibly making recapture more costly
• Complexity and Audit Risk: Aggressive strategies may attract IRS scrutiny, necessitating meticulous record-keeping and professional guidance

Bottom Line

100% bonus depreciation is a powerful financial tool in real estate investment tax strategy, but it has limited or no benefit to many casual real estate investors. Each investor must weigh immediate benefits, recapture implications, long-term financial strategies, and up-front costs to determine if it’s the right tax strategy for them.

Before proceeding, consult with a tax professional to assess how this aligns with your investment goals and tax situation. You are welcome to contact my CPA, Matt Bormel at [email protected].

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].

Upcoming (pre-market) ERG Listings, Details and Additional Listings Available by Request

• Falls Church City – 4BR/4.5BA/3,000+ sqft – End-unit townhouse (1995) – Rees Pl Falls Church VA 22046
• Highland Park/Overlee Knolls – 6BR/5.5BA/5,000+ sqft – Detached Single Family (2025) – 22^nd Rd N Arlington VA 22205
• Arlington Ridge/Aurora Hills – 3BR/2.5BA/2,450sqft – Detached Single Family (1961) – S Grove St Arlington VA 22202
• Yorktown – 6BR/6.5BA/6,000+ sqft – Detached Single Family (2026) – N Greencastle St Arlington VA 22207

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at [email protected].

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

Interest rates on investment properties are traditionally much higher than rates on primary homes, often 0.75-1.0%+ higher or charge 1.5-2 points, because they are riskier loans and thus require a higher return from the creditors. However, I’ve recently found that some banks are pricing investment loans much lower than I’m used to seeing, relative to loans on primary homes.

As we head into the second half of the year, when demand begins to taper off in the real estate market, the lower interest rates on investment loans might create some attractive buying opportunities for some investors.

I spoke with Trey Reed with Cross Country Mortgage about their investment loans and why CCM has shifted its investment products. If you’d like to speak with Trey directly, you can reach him at [email protected] or 703.297.9382.

Lower Rates on Investment Loans, Including Condos

Usually interest rates on investment properties are 0.75-1.0% higher than the going rate on mortgages for primary homes (or charge 1.5-2 points on the loan), but lately CCM has been pricing investment loans just 0.125-0.25% higher than their rates on primary loans (with no points). Last week an investment property with 25-30% down was priced at 6.875-6.99% with no points for a 30y loan compared to 6.75-6.875% for a comparable loan on a primary home.

Traditionally rates on condo loans have also been higher than other property types because banks consider condos to be a riskier asset. With at least 25% down, CCM is not charging any risk premiums for condos, which usually costs borrowers another 0.25%.

Why Have Investment Loans Gotten Cheaper?

Trey can’t speak for all banks, but he said that Cross Country Mortgage has improved their rate pricing and underwriting guidelines favorably for investors because they’ve found that the loans perform well in the long run and are seeing a lot of demand for them in the secondary market.

Investment properties have higher down payments (25-30%) compared to most primary home loans and the rental income provides additional risk protection compared to primary or second homes. The risk protection of rental income is the main reason why you won’t find similar rate discounts on second homes.

Portfolio Lending Offers More Flexibility

These discounted investment loans are what’s called “portfolio loans” which means CCM is setting their own underwriting guidelines rather than using Fannie Mae guidelines, which price investment loans much higher. One of the differences in these portfolio guidelines is that they’re applying future rental income to the debt to income calculations to qualify borrowers, making it easier to qualify for an investment loan.

If you have questions about Cross Country Mortgage’s investment loans or are interested in getting quote on a property you’re considering, you can reach Trey Reed at [email protected].

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].

This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at [email protected].

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

I’ve seen a positive shift in demand over the past 4-6 weeks and the May data for Arlington and Northern VA confirms that buyers are coming back to the market.

A lot of would-be buyers in Arlington and Northern VA stepped away from the market when DOGE began rapidly announcing cuts to the Federal workforce and spending in mid-February. For the past two months, we’ve seen more headlines about Musk stepping away from DOGE and workers being rehired than headlines about DC-area workforce cuts, which seems to have brought more confidence into the market and brought some of those early spring buyers back into the housing market.

More Homes Went Under Contract

More homes went under contract in Arlington (19%) and Northern VA (4%) in May 2025 than in May 2024. There are a lot more homes for sale and buyers have taken advantage of more choices than they’ve had in years.

And Fewer New Listings Came to Market

After a significant increase in new listing inventory in March and April (year-over-year), the number of new listings that came to the market in Arlington and Northern VA dropped to nearly the same number we had in 2024 (which was a historically low number). I’ve said it before and I’ll say it again, the narrative that circulated online in February/March that everybody in the DC area was selling their home was, and is, false.

Available Inventory Reverses Course

We still have many more homes for sale in Arlington (+38%) and Northern VA (+51%) compared to May 2024, but after five straight months of monthly increases to the year-over-year change in inventory levels, the trend reversed in May and I believe we’ll see another drop in the June data.

Sold Prices are Up Year-over-Year

The median price of sold homes in Northern VA are higher each month in 2025, despite lower demand and higher supply, hitting a 7% increase in March and most recently 4.6% in May, year-over-year.

But Unsold Home Prices are Down

Only tracking the price of sold homes doesn’t provide a full and transparent picture of actual market conditions because closed sales only account for the properties that buyers choose to purchase, not the properties that aren’t selling…and there are a lot more of those than usual. However, even the pricing on unsold inventory (active listings) isn’t terribly concerning, with the median price of active listings down just 1.1% in May, year-over-year.

If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].

Upcoming (pre-market) ERG Listings, Details and Additional Listings Available by Request

• Reston – 4BR/3.5BA/3,000 sqft – End-unit townhouse (1993) – Hollow Timber Ct Reston VA 20194
• Falls Church City – 4BR/4.5BA/3,000+ sqft – End-unit townhouse (1995) – Rees Pl Falls Church VA 22046
• Rosslyn – 3BR/2.5A/2,400 sqft – Condo (2022) – 1781 N Pierce St Arlington VA 22209
• Arlington Ridge/Aurora Hills – 3BR/2.5BA/2,450sqft – Detached Single Family (1961) – S Grove St Arlington VA 22202
• Lorton – 3BR/1.5BA/1,120 sqft – Townhouse (1981) – Sheffield Village Ln Lorton VA 22079