I’m often asked about the Arlington condo market, with all the development going on and this being a slower market–when will it “bottom out”?
The data’s a little confusing. Take a look at the monthly average sales price graph above. You can’t make heads or tails of it, let alone find any trend.
But let’s ‘smooth out’ the data by turning it into a rolling 3 month average.
Just to clarify what we’re looking at, this is a rolling 3 month average sales price for Arlington condos. For example, the April 2007 data point represents the average sales price (excluding any seller subsidy, but let’s save that for another post) for the period February 1 – April 30.
Now we can clearly see the trend since mid 2006. But wait a minute…hasn’t the press been reporting that condo sales have been dropping like a stone since the peak in June 2005? What’s that peak in December 2006? Oh, and for reference, the “peak” condo price in June 2005 was $387,687 (yes, that’s about $20,000 less than today’s price!)
Despite that uptick late last year, the average price has dropped about $35,000, or just under 10%, since December 2006. But April did indeed tick up a bit…stay tuned.
So what’s going on here? A few things, I believe. First, the popular press is not reporting on the right statistics, first of all. Are there fewer sales? YES! But prices for the most part remain high. Why? The flippers have become landlords to ride this out, so supply dropped a bit. People who didn’t have to sell decided to wait it out as well and supply dropped a bit more. There are about 20% fewer listings today than a year ago:
And the local economy, as I’ve mentioned before, draws people to the area, so demand has helped maintain that equilibrium price. So, we have demand stable (at worst) to growing, and supply stable (at best) to shrinking. Is April’s uptick in average sales price just the normal spring “bounce”? Or the start of a trend?
Data Source: MRIS. Data deemed reliable but not guaranteed.