Certain real estate realities might be deemed cliché because we hear of them so often, but a closer look at one in particular reveals it’s simply the best adage for the state of affairs in the D.C. region. As we open lockboxes on doors from the far reaches of Fairfax or Montgomery County to the heart of D.C., the one stark reality is the influence of “location, location, location.”
It’s not just a throw-away line to move the conversation along; it’s crucial in understanding perhaps the biggest driver in real estate pricing. It can make buying a challenge and ultimately competitive, but it’s also nothing that needs to get you down. It’s just a reality of the market. Location creates demand that affects price and amount of available inventory that affects days on market, that affects price, and on, and on.
How can we illustrate this? Take a look at the 2019 home sale prices for the region, according to MarketStats by ShowingTime, which reports on data from Bright MLS, the region’s multiple listing service.
In Arlington County—ground zero for Amazon HQ2 and its eventual 25,000 jobs (and additional jobs and industries almost sure to follow)—the median sales price for homes jumped 8.9 percent in 2019 from the previous year.
Overall, the whole area saw prices jump, but Arlington was on top. Prince George’s County median price increased a robust 6.9 percent, followed by Fairfax County (4.9 percent), Falls Church City (4.2 percent), Fairfax City (2.7 percent), Washington, D.C. (2.6 percent), Montgomery County (2.3 percent.), and Alexandria City (0.5 percent).
So, the influence of “location, location, location” on price is evident enough. But as we look deeper, this adage is working in conjunction with other effects that are driving prices even higher.
The utter dearth of listings is affecting the entire region.
“Active inventories of 5,489 were down a significant 18.0% compared to last year and were down 22.6% from last month,” according to the Bright MLS report. “Inventories were at the lowest monthly level of the decade, and this marks the seventh consecutive month of double-digit declines in inventory levels.”
In Arlington County, year-end inventory in 2019 was down 28.9 percent compared to 2018. The lower inventory results in more buyers competing for fewer properties. This has impacted days on market in a huge way. Average days on market dropped more than 65 percent from 2018 to 2019, with homes selling in about 23 days instead of 66 days in 2018.
Economics 101 and Prepared Buyers
Ultimately, the reality of supply in demand is on display big time in Arlington and throughout the region. Face it, the Washington, D.C. area is a great place to live, and a lot of people just happen to agree. The challenge for buyers is positioning themselves to have the best opportunity to win the day when it comes to finding a home in a competitive market. Yes, the market can make it a challenge, but it’s nothing to dread, and buyers continue to succeed in finding and closing on that dream property.
You just need to do everything you can to be one of those buyers. It means being realistic about what prices you’ll see when looking for that convenient town home walking distance from a metro station, and then making decisions about what’s most important to you in finding a place to live. It also means you have to be ready to move when you find what you’re looking for.
Always be prepared. From an agent’s perspective, this means having all of your financials in order before you submit an offer on that perfect home. If you’re getting a loan, it means ensuring you have a reliable lender, one who has already thoroughly checked your credit, assets, salary, and employment picture. It also means they’re ready to supply that pre-approval letter when you’re ready to make an offer—even if it’s a weekend.
Don’t ever commit to something you’re unsure of, but also review different scenarios, the pros and cons of different locations, and different amenities so you can have many of your questions answered beforehand and be ready to jump on opportunities quickly.
Ultimately don’t fret about the impact of “location, location, location” and all the related influences and realities that make this market lively (to say the least). Instead, understand and embrace it, make the location you desire a goal and not a deterrent, plan wisely, and you’ll be best positioned to be successful in the D.C. market.
Christopher Prawdzik, an Accredited Staging Partner® Real Estate Agent, and his wife Angela Logomasini are licensed Realtors® with Samson Properties in Alexandria. Operating as D.C. Region Real Estate, they serve the Virginia, Washington, D.C., and Maryland real estate market and offer comprehensive real estate services, including 4½% full-service listings.
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