If you take a quick look around Arlington it seems there is a bit of a housing boom going on. Despite an undercurrent of economic uncertainty, real estate activity across our city is consistent and dynamic. To understand some of trends buoying the market, the Tuckahoe Home and Garden Tour team sat down with David Howell, Executive Vice President and Chief Information Officer from McEnearney Associates. Having worked in Northern Virginia and Maryland real estate for over 33 years he has seen remarkable change. Coming off of a four month stint as the head of the firm’s Arlington office Howell has a fresh perspective on exactly what is happening in an around our community.
Right at the top of our conversation, Howell explains that there are a couple of forces that are having a direct impact on property pricing and availability. Interest rates are the headline of the story these days. With recent increases of a half to three-quarters of a point there is no denying that buyers now have 7-8% less buying power than just a few months ago. At the same time, you have incredibly low inventory.
“The initial reaction should seem to be a slower market,” David points out. “But what we have seen is counterintuitive. Contact activity (from potential buyers) has been up 10% compared to the same period last year.”
He ascribes this behavior to the fact that it often takes buyers a few months to catch up to the trend and proffers that, “you never know for sure when interest rates have hit the bottom until about six months after the fact.”
In this case, there were likely a lot of first-time buyers waiting for the right time to buy and it is now abundantly clear that if they want to get into the market – now is the time. After over two years of sub 4% rates there is a general acceptance that the cost of a home in the area will only go up. So, despite overarching concerns about a potential reduction in the federal workforce or other macro changes, the desirability of the area and the lack of inventory have created a sellers’ market with abundant demand. This is especially true of homes in the 500,000 to 750,000 range. Howell pointed out that in Arlington 700,000 is right at the heart of the market. It is not uncommon for the absorption rates in this price range to be as high as 60%&emdash;or in laymen’s terms&emdash;when these houses come on the market, they fly off the shelf.
The second trend is a fundamental change in lifestyle driven by families in urban and inner suburban areas. Property that is located in a “walkable” community is now a requirement for prospective buyers when 10 and 15 years ago it was much more about square footage and open lawns. We all live among large new builds going up all across Arlington. With smaller lots and significant square footage&emdash;yet access to restaurants and other amenities&emdash;they are competing well against larger properties across Great Falls and other areas that are more secluded.
Lastly, we touched on the value that Arlington County Public Schools bring to the equation. With 10 of the best elementary schools in the state being located in our county (Tuckahoe at #9), according to a recent ranking on niche.com it is unlikely that we will see a break in demand from young families any time soon.
Founded in 1980, McEnearney Associates prides itself on putting the customer first. As a regular Platinum sponsor of the Tuckahoe Home and Garden Tour, we extend them a heartfelt thanks for their support. For more information, check out www.mcenearney.com.