Arlington Real Estate Through The Financial Crisis – Part 1

The bursting of the housing bubble is one thing, but what happened in Arlington after that fateful September in 2008 (financial market collapse)? How did Arlington react after the expiration of the first time home buyer tax credit in 2010? Where is Arlington right now as numerous reports say much of the nation seems poised for a double dip?

Rather than answer all these questions at once, which I thought would become painful for you, I decided to do a small blog series on the subject. Each post based upon the data outlined in the the chart below.

These posts will require some audience participation via the chart below, so be on your toes! I hope you enjoy it! (if you are on an iPad, my apologies, the chart is in Flash)

What happened in Arlington real estate after the collapse of the financial markets?

[EDIT 6/28: I originally left out the very important detail that this data only represents detached, single family homes]

In the series of charts below you will see the area under the bottom section where you can scroll through date ranges. Scroll back until you reach 9/08. Take note that it was during this time that our financial system was crumbling before our eyes. The top chart looks a bit dramatic, but be sure to pay attention to the values at the right. Arlington real estate went from a peak average sales price of $903,000 to a trough of $898,000 during Q4 2008. In the grand scheme of things that amounts to NO CHANGE. (post continues after the chart…)

See, Arlington really is recession proof, right? Ah, not so fast. Not to be overlooked is the bar graph in the middle of the set of charts which represents inventory. A couple things were at play.

  1. The collapse came as the slower fall market was progressing and annually inventory goes down around that time anyway.
  2. I suspect that there was a general assumption that this would not be a good time to sell, so owners sat tight, further reducing inventory
  3. Demand may have fallen off, but not at the same rate that inventory reduced.

In short it appears that, though demand may have fallen during this time (I'm not so sure), supply fell even more, which kept prices stable. The reason I say "I am not so sure" about the lack of demand is because move-in ready home after move-in ready home was selling fast, and selling with competition from multiple buyers. So, it seemed during the time that demand was stronger than supply, but in part that was likely because there were only so many homes on the market that matched what today's buyers are looking for.

No matter how you look at it, Arlington performed extremely well in the immediate aftermath of the unfolding financial crisis. In my next post we'll look at how Arlington real estate reacted to the expiration of the first time home buyer tax credit.





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