Despite a much-publicized downturn in housing prices recently, the Arlington real estate market is still very strong, according to an assessment issued by the business development wing of the county government.
Arlington Economic Development (AED), the group responsible for the assessment, showed that, while the housing market may have cooled, there are still many major real estate projects in Arlington’s future, especially in the business sector.
The report also said that the real estate market is shaped by Arlington’s unique demographics, which skew heavily towards young professionals in their 20s and 30s.
"The market is very robust in terms of construction," Terry Holzheimer said. Holzheimer, the Director of AED, said that things are looking up in some key neighborhoods in Arlington such as Crystal City and Columbia Pike. "We haven’t seen this kind of construction… in 25 years," Holzheimer said.
THE HOUSING MARKET HAS COOLED from its breakneck pace in the early part of the decade, Jill Landsman, the communications manager for the Northern Virginia Association of Realtors, said. But she added that this cooling is merely the result of the market correcting itself.
Landsman said that six more houses were sold in Arlington in January 2007 than January 2006 while the average price of a house dropped during that same period by more than $90,000. This is a sign, she said, that "sellers have gotten more realistic. [They] have come to their senses in terms of the [market] correction and are pricing their houses better."
While the overall housing market is stabilizing, the market for condos in Arlington is not looking as good. The area has been saturated with condos recently," Holzheimer said.
"There are 2,828 condos under construction right now," he said, many of which are being constructed in Rosslyn and Crystal City. "This is a lot because the market can usually only absorb 900 condos a year. [In] a good year it absorbs 1000."
Holzheimer predicts that, ultimately, condo prices will drop and many of the new condos may need to be converted to apartments. He also said that much of the space used for condos could be converted to offices.
He also says that one of the defining characteristics of the Arlington real estate market is its age. "The large amount of young professionals in Arlington really differentiates us from other housing markets," Holzheimer said. "They have unique occupations, educations and levels of income."
According to a 2006 AED study, one out of every four Arlington residents is between the ages of 20 and 35. Arlington also has one of the highest rates of per capita income out of all the Northern Virginia counties, with almost 30 percent of its residents earning over $100,000 per year.
"This demographic strengthens the rental industry," Holzheimer said. "[The young professionals] are well paid and tend to have roommates." But he said that, while most of these people stick to apartments, "they may eventually grow into a single-family detached home."
Ann Siegel, a human resources consultant in her 30s, said that she rents an apartment in Arlington because "I really like the area but I have to rent if I want to remain here. [If I didn't rent], I'd either have to find a really good deal [on a house] or resign myself to moving further away."
One of the consequences of having such a large population of people in their 20s and 30s in Arlington is that they tend to move to other places.
"Arlington has extremely high mobility," Holzheimer noted. "About half of our population turns over every five years."
"I initially started renting in Arlington because I didn't think I was going to be here for very long," Siegel said. "I'd like to buy a place within two years but I don't know if it will be in Arlington."
DESPITE THIS UNCERTAINTY among Arlington's populace, there are many high-profile commercial projects in Arlington’s future.
One of the major developments in the past few years has been the transformation of the Shirlington area, which is near completion. The revamping has brought 400 residential units, 193 office spaces, a new theatre and a refurbished library.
"People said it would never happen," said Clyde Newman, a commercial development specialist at AED, "but now it [is happening]."
Another major project that is being considered is a convention center located on Army Navy Drive and Eads Street in the Pentagon City area.
Newman said a large convention center in Arlington would be welcomed by area hotels. Many of them have had to turn away large groups because they do not have the facilities to accommodate them. "There is a niche market for something like this," he said.
However, he noted that much time has passed since the original study for this project was commission in the late 1990s, thus making it necessary to reexamine all the feasibility issues surrounding the project if it were to go forward.
One of the most anticipated and talked-about real estate projects in Arlington is the redevelopment of the Columbia Pike area. According to Newman, one of the keys to the area’s flourishing will be a trolley system. "For some reason, people will ride a trolley but they won’t ride a bus," he said.
When and if the trolley is completed, people will be able to ride it to a new 6-story, 35,000-square-foot building that will hold 289 apartments and contain underground parking. The building will be located in the shopping center where the Giant supermarket currently is, on Columbia Pike and Adams Street.