Here is why prices are going to climb in 2025 in Arlington

Our industry specialist has reviewed and approved the final article. Also, some of the data presented here have been integrated into the Arlington real estate spreadsheet template.

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Expecting a decrease in Arlington's prices in 2025? Think again.

Even with changing patterns, Arlington's market stays strong, with high demand and low supply pushing prices up.

Let's explore why this area's prices are set to rise in 2025.

This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.

1) In Arlington, there are only about 0.38 homes for each person, which is quite limited

Signal strength: strong

The fact that there is around 0.38 home per inhabitant in Arlington indicates a limited housing supply relative to the population. This low ratio suggests that housing demand is likely to exceed supply, which often leads to rising prices.

Arlington is known for its proximity to Washington, D.C., making it a desirable location for professionals working in the capital. This demand is compounded by Arlington's reputation for excellent schools and amenities, attracting families and individuals alike.

With such a limited number of homes available per person, competition for housing is likely to be fierce, driving prices upward. Investors should consider that the scarcity of homes is a key factor in predicting future price increases.

If the ratio were to increase significantly, say to 0.5 home per inhabitant or more, it might indicate a more balanced market, potentially stabilizing prices.

Source: USCensus

2) Three major websites confidently predict that home prices in Arlington will rise in 2025

Signal strength: strong

There are three major websites forecasting a positive growth for home prices in Arlington in 2025, which is a promising signal for potential investors.

Among these forecasts, Realtor is the most optimistic with a projected increase of 9.20%, followed by Redfin's forecast of 4%, and finally, Zillow predicts a 2.60% rise in home prices. This range of predictions shows a significant gap in expectations, highlighting the varying levels of confidence among these platforms.

While these forecasts are encouraging, it's important to approach them with caution as they are based on predictive models that may not account for unforeseen factors. We will also rely on strong, reliable, and actual data to make a more informed and professional judgment about the market.

If these forecasts were to predict a negative growth or stagnation in home prices, it would suggest a different outlook for the Arlington housing market.

Source: ZillowForecasts

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3) Arlington's "vacancy rate" of 7.0% shows it's a bustling and competitive market

Signal strength: moderate

The vacancy rate in Arlington is currently at 7.0%, which is considered very low. This low vacancy rate indicates that the market is highly occupied and competitive, suggesting that demand for housing is strong.

When demand is high and supply is limited, housing prices tend to increase as more people compete for fewer available properties. In Arlington, properties that are easily rented are often modern apartments in good condition, particularly in areas like Clarendon and Ballston, which are known for their amenities and proximity to public transport.

Investors should consider that such properties are likely to see price appreciation due to their desirability and the overall market conditions. However, if the vacancy rate were to rise significantly, say above 10%, it could indicate a shift towards a less competitive market.

Source: NeighborhoodScout

4) Arlington's "livability score" of 78 indicates a good quality of life

Signal strength: moderate

The livability score of 78 in Arlington is considered good because it reflects a high quality of life.

One reason for this score is the excellent public school system, which attracts families looking for quality education. Additionally, Arlington boasts numerous parks and recreational areas, providing residents with ample opportunities for outdoor activities and relaxation. These factors contribute to a desirable living environment, making Arlington an attractive place to live.

Another key aspect is the strong local economy, with a variety of job opportunities in sectors like technology and government. This economic stability often leads to increased demand for housing, as people move to the area for work. As demand rises, it is likely that housing prices will follow suit, making it a potentially lucrative market for real estate investment.

However, if the livability score were to drop significantly, it could indicate a decline in these positive attributes, potentially leading to a decrease in housing demand and prices.

Source: AreaVibes

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5) In Arlington, home prices have consistently risen by an average of 9.0% each year over the past decade

Signal strength: moderate

The fact that home prices in Arlington have appreciated at an average rate of 9.0% over the last decade is a noteworthy signal for potential investors. This historical trend suggests that there has been a consistent demand and growth in home values in the area, which can be a positive indicator for future price increases.

While a positive 10-year average home value appreciation indicates a history of demand and price growth, it is important to remember that past performance doesn’t guarantee future results. However, such a trend can still be a valuable piece of information when considering investment opportunities.

Investors should consider this data as part of a broader analysis, as it suggests favorable conditions for future increases in housing prices. It is crucial to look at other factors as well, but historical appreciation rates can provide a useful context for making informed decisions.

If the appreciation rate were to drop significantly, say to below 3% over a similar period, it might suggest a different trend and warrant a more cautious approach.

Source: NeighborhoodScout

6) Arlington's median home price remains 28% lower than the national average

Signal strength: minimal

The fact that Arlington's median home price is 28% below the national average suggests that there is room for growth in the housing market. When a market is priced lower than the national average, it often attracts investors and homebuyers looking for affordable options, which can drive up demand and prices.

In Arlington, the most expensive properties are likely to be luxury single-family homes in upscale neighborhoods such as Lyon Village. These areas are desirable due to their proximity to amenities and high-quality schools, making them attractive to affluent buyers.

On the other hand, the cheapest properties are probably small condos or older homes in less developed areas like Nauck. These properties may offer investment opportunities for those looking to renovate and increase value over time.

If Arlington's median home price were to rise above the national average by a significant margin, it might indicate a market saturation, potentially slowing down further price increases.

Source: Zillow

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7) Arlington boasts a strong employment rate of 68.8%, indicating robust job availability

Signal strength: minimal

The employment rate in Arlington is at 68.8%, which is considered high compared to the national average in the United States.

This high employment rate suggests that more people have stable incomes, which can lead to increased demand for housing. When people have jobs, they are more likely to buy homes, and this demand can drive up housing prices.

In Arlington, the major employment sectors include government, technology, and education, which are known for providing stable and well-paying jobs. Companies like Amazon and Boeing employ a significant number of people in the area, contributing to the high employment rate.

If the employment rate were to drop below 60%, it might indicate a weakening job market, which could lead to a decrease in housing demand and potentially lower housing prices.

Source: USCensus

8) In Arlington, about a quarter of homes sell for more than their "listing price."

Signal strength: minimal

In Arlington, around 25% of sales close at a price higher than the listing price, which is a strong indicator of demand. When buyers are willing to pay more than the asking price, it often means that competition among buyers is fierce and they are eager to secure a property.

This kind of market behavior suggests that housing demand is outpacing supply, which typically leads to an increase in prices. If more people are interested in buying than there are homes available, prices are likely to rise as buyers try to outbid each other.

For someone considering investing in real estate, this trend can be a signal that property values might appreciate in the near future. However, if the percentage of sales closing above the listing price were to drop significantly, say to below 10%, it might indicate a cooling market.

Source: Zillow

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So, are prices going to climb in Arlington in 2025? Absolutely