The Condo Market

What’s going on in the condo market today? That’s what I want to talk with you about and I promise I will keep it as short as possible. 

In the last several months, condo prices in large cities have declined and if you are currently looking to buy, now is the time. 

The shift started in July and since than prices have steadily gone down.

But not just the value has dropped, rental prices have dropped significantly the closer the properties are located to a city center.

If you search online, you will see condos in the Arlington area listed with a 30% discounted rent for the first three months. In the past landlords charged extra for parking, storage and if you had a pet. However now, this is included in many locations. 

• When Covid hit, many companies stopped hiring and people who would have normally relocated to a specific area, did not. After a while companies started hiring again, but offered their new employees the ability to work from home and therefore they continued living in the same place.
  I had a conversation with a client who stated that she started a new position in DC but continued living in her hometown in Kentucky near family and friends. For her, working remotely is much better than sitting in a small apartment in Arlington or Alexandria.
  
  
• Many tenants decided to move out of the more expensive city centers instead of being in their condos and apartments, working from home with no outdoor space. Amenities were closed and the risk of catching the virus in one of the common areas of an apartment building is much higher. And some of them figured out how annoying their roommate was.
  
  
• In the meantime, corporate America realized that the productivity did not suffer if employees work from home; sometimes it was even the opposite. They became more productive and soon many companies realized that they could cut expenses for office space in the future and offered their employees to work from home. There are even some companies where employees will be able to work fulltime remotely even after the pandemic.

While the commute is now one hour each way, so two hours per day and her weekly commute is four hours. Her money is now going towards a mortgage for her own house and she is building wealth, instead of paying rent.

In another example. One of my clients, originally from Philadelphia, spent the weeks here, working for a global corporation and paid monthly $2400 rent but returning to Philadelphia on the weekends to see family. Their employer offered them to work in the future 100% remotely, so they moved back and saves now every month $2400 and can be with their family seven days a week. 

Many tenants had similar ideas and moved further away from city centers, resulting in many empty apartments and some desperate condo owners. The value of condos and the amount of rent you are able to charge is dropping.

The future of the condo and apartment market is uncertain, and nobody can say at the moment, what, when and if this situation will change.

I personally believe it will take a while until the situation will change and the pandemic is under control. 

Here is my advice:

If you have thought in the past to buy a condo close to town, then do it know. The prices are currently very competitive, and you should buy before the situation stabilizes and prices recover. 

If you are an owner looking for tenants, be patient and creative. Offer a short term lease or a discount. Worst case rent the condo for a few months for a price which will cover your expenses instead of leaving it empty.

Information provided by Andreas Leindecker, Realtor, 571.685.9831

andreas.leindecker@gmail.com

All information provided in this article is deemed reliable but is not guaranteed and should be independently verified.