At the end of August, the overall supply of active listings across Virginia was down more than 40% compared to last August. Over the summer, new listings coming to the market have been drawn down more and more quickly as buyers compete for increasingly fewer available homes.
While inventory is down generally across the state, there is growing evidence that the rapid shrinking of the inventory is largely among single-family homes, while the condo inventory has actually expanded this summer.
While the single-family inventory was down 42.2% year-over-year at the end of August, the supply of condo listings was down just 12.9%. In July and August, the number of condo listings at month’s end actually increased by more than 3% each month, while the inventory of single-family homes continued to be drawn down.
The uptick in condo listings this summer is largely due to new offerings in Northern Virginia, and particularly in Arlington and Alexandria, where the condo inventory was up 84% and 67%, respectively, between the end of June and the end of August. The condo inventory in Arlington is higher than it has been since October 2018. In the City of Alexandria, the overall number of condos for sale has not been this high since November 2018.
What is driving the increase in condo listings?
Condo listings have been on the rise in many markets across the country. There are several reasons why we are seeing an increase in condo availability. First, there is growing demand from Millennials for larger, single-family homes. As this generation gets married and has children, they are inclined to move out of condos in urban areas into single-family neighborhoods with good schools and family-friendly amenities.
The influx of condos to the market also reflects the growing trend of individuals moving out of urban areas as a result of COVID-19. With individuals increasingly working from home and because of health concerns in some urban areas, there has been growing appeal of exurban and rural communities. Condo owners in urban neighborhoods are listing their homes to make the move to more space.
Condominiums will continue to be an attractive option for first-time homebuyers and downsizers. However, during the COVID-19 pandemic, single-family homes will be snatched up more quickly while condos will linger in some markets.