Something interesting is going on in the Arlington condo market the last few months. Take a look at this pricing data:
| | 1BR Actives | 1BR Solds | 2BR Actives | 2BR Solds |
| Aug-07 | $ 368,724 | $ 362,991 | $ 560,306 | $ 551,306 |
| Sep-07 | $ 356,766 | $ 348,300 | $ 581,433 | $ 561,527 |
| Oct-07 | $ 328,319 | $ 323,785 | $ 522,465 | $ 509,265 |
| Nov-07 | $ 351,053 | $ 347,406 | $ 503,192 | $ 490,735 |
| Dec-07 | $ 360,368 | $ 358,543 | $ 510,536 | $ 497,564 |
This data represents just the 1 and 2 BR sold condo listings in 22201. Sales prices not including seller subsidies, which can be in the thousands of dollars. For purposes of this analysis I think we can assume that the amount is consistent though, so the argument is still the same...buyers and sellers have come to consensus on what the "fair" value is.) You'll notice that the list price and closing price are pretty close:
| | 1BR | 2BR |
| | % of List | % of List |
| Aug-07 | 98% | 98% |
| Sep-07 | 98% | 97% |
| Oct-07 | 99% | 97% |
| Nov-07 | 99% | 98% |
| Dec-07 | 99% | 97% |
Does this signal that we've achieved some sort of balance in the condo market? This data does not represent the active listings that didn't find buyers, so of course there are still overpriced listings out there. But what this indicates to me, for this micro-market, is that (1) when a condo is priced fairly, a buyer will make an offer and (2) a successful offer will not be a lowball.
Now let's look at the trend over the last six months:
Here we see the close list-vs-close price trend, but we also see that 1BRs may be trending up, while 2BRs are still trending down. Very interesting...has the 1BR condo market stabilized? I'd argue that the lack of alternatives for this pool of buyers (i.e., renting as the only alternative) will drive a "recovery" at this price point first; whereas a 2BR buyer has the option of renting, choosing a 1BR at a lower price point, or even choosing a small townhouse at the same price point.
If the 1BR condo market is in fact stable, will this stabilization trend spread to the 2BR market and then further up the price point ladder? Or will the dropping 2BR market knock the 1BRs lower as new buyers wait it out, hoping to afford a 2BR soon?
A few things are clear from this graph though: 2BRs have a much quicker rate of change, at least in this six month period, so it's worth watching carefully if that's what you're looking to buy. And for the 1BR buyers, the trend may not be as bad as you think.
Contact Katie Wethman, CPA, MBA, REALTOR® at (703) 847-3336 or via email to list your property for sale or to purchase a property in the Washington, DC, Arlington, Alexandria, Fairfax County, Fairfax City, or Falls Church City. I specialize in first time buyers.
Copyright © 2008 by Katie Wethman, All Rights Reserved.
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