Your Arlington Market Update is Here!
The April numbers for Arlington are in, and if you have already dipped your toes in, you've probably already got a sense of where things stand.
Over the last 10 years, Arlington has experienced a strengthening seller's market. From 2008 to 2013, inventory decreased. We remember what it was like for our buyers in 2013 -- only slightly more challenging for buyers than in today's market -- where we are seeing similar figures. Lucky for those 2013 buyers, we're still seeing low inventory and multiple offers, which continue to push up the prices in many neighborhoods. The world's most influential real estate agent, Gary Keller, has preached that we're due for a shift (toward a slower, more balanced market) -- we believe it - it's coming - but probably not to our area for another two years -- unless you're talking luxury -- and that's already seen some slow down.
Let's take a closer look at what the April numbers indicate: Condos, town homes and detached homes are all standing strong at just under 2 months of inventory. Considering that a balanced market is 6 months of inventory and less than that is a seller's market, it's no wonder you might notice homes priced and marketed well* on and off the market in a matter of days. Simply put, there are more motivated buyers out there than folks selling.
What else should you know? Whether you're a buyer or a seller, the current average mortgage interest rate is a critical factor in the real estate market. Why? Most likely, a buyer is going to need financing in order to purchase. In Arlington last month, cash buyers made up only 10% of offers accepted. Buyers with conventional loans made up the vast majority of buyers, and VA buyers accounted for right around 5%. That's a lot of folks using loans -- loans with interest rates that have been creeping up over the last few months. Why does that matter? It's all about the affordability index.
The affordability index looks at the entire cost to purchase a home -- which means price + interest rate - as both increase, the entire cost of buying a home becomes more challenging. Not to worry, however - the average 30 year fixed rate is right around 4.7%, which is still incredibly low. And, with rental rates still being high, it generally makes more sense to buy versus rent.
Teaching a class in Arlington last month, I got a question about how smart an investment in Arlington is at this point; Arlington residents are lucky in a lot of ways --- they live in close proximity to DC, can take advantage of amazing public transportation, and there was never a lot buildable space (which made the bubble bursting not so protracted or painful here) - it's also pro-growth. It hardly gets better than that; and according to county officials, they don't plan to slow development/improvements down any time soon. If you are selling now, you should do well; if you are a buyer and can get in while borrowing money is cheap, you won't regret it.
Interested in the state of the market in your DMV city? Email us for the 411.
*Yes, these are requirements -- buyers are savvy and can tell an overpriced listing from a mile away.