In the last several days, several of my buyers have discussed their concerns about the market. The news about the drop in sales in July freaked one out. Another client took the opposite approach. The drop in sales meant it was an opportune time to enter the market since less people would probably be searching. Except this is the DC market.
Take 1411 Monroe St, NW, pictured above. One of my clients wanted to see it. It's been on the market 11 days and it's listed for 449K. It's a fixer upper in a great location. In the notes section of the listing, it said "contact agent by 8/26 if you want to make an offer." Today is the 30th so I called the agent. I was told that they're one initial from ratifying a contract. Because I'm the curious sort, I asked how many offers he received. Although I've been involved in many multiple offer situations in the last two years, I was still shocked by his answer of ELEVEN offers. wow.
After I congratulated him, I hung up the phone and thought about the implications. Clearly the housing market isn't going down the tubes in DC. I think it's easy to assume the worst if you're following the national news. It does raise some interesting questions. Should you be following the news? Or should you be following your intuition? It's a tricky road.
My advice? Do a little of both. Follow the local real estate news vs. the national news. An accurate picture of what's happening in your chosen neighborhood will help your decision. For example, we bought on the edge of U St. Corridor because I knew a lot of development was coming in the next five years. We will definitely see appreciation. It might not be a lot of appreciation..maybe 4%. I think 4% appreciation over five years is better than 0% appreciation if you're not an owner. Maybe I'm biased since I'm in the business but I think a lot of people would agree with me.
1. Produce from the farmer's market at 14th and U. Every Saturday from May 1-Nov. 20th fruits, veggies, baked goods and more are available on the corner of 14th and U St. It's seasonal, fresh and locally produced. This was today's haul. Yum!
2. The Green/Yellow Metro stop that's two blocks from our house. I know people poo-poo everything but the Red line but I love it. I can hop on the Metro and get to Target in one stop. It's three stops to the Verizon Center and four stops to the National Mall. We went to Jazz in the Sculpture Garden yesterday and it took 10 minutes to get there.
3. The 9:30 Club. I don't fully take advantage of living across the street from the 9:30 Club but I'm trying. The Gabriela y Rodrigo show was one of the best performances I've ever seen.
4. Solly's patio. Sitting outside of Solly's for happy hour and $3.00 Miller Lites makes me smile. When the weather is beautiful, there's nothing better than having a beer and people watching.
5. The ESL guys think my 'hood is cool too. Marvin, The Gibson and Patty Boom Boom were their first forays. They've been successful from day one. I can't wait for the bakery, the British pub and the beer garden to open. All of these amazing places (and how could they suck? It's the ESL guys and they have the golden touch) are within five blocks of my house. Hell yea!
A shocking post title? Not really…buying your kid a condo vs. dorm life in college is a common occurrence in Foggy Bottom. In fact, I'd say 75% of the business that The Murphy Team does in Foggy Bottom is helping parents and their children find a place to live. That's why I was fascinated to read the article in the Post real estate section that discusses the practice. ("Consider buying a home instead of dorm rent")
George Washington University (GWU) is the most expensive university in the US. If parents can afford to send their kid to be educated at GWU, it's likely they can afford an investment property. $840 a month for part of dorm room is cheap vs. renting a studio or 1 bedroom in DC. A studio in Foggy Bottom can rent from $1300 to $1900 a month. A one bedroom can rent from $1300 to $4000. For most parents coming from other (cheaper) states, there is a lot of sticker shock. Buying becomes a more attractive prospect once they see the rental prices.
What the article doesn't address is the current market in Foggy Bottom. A lot of the buildings in Foggy Bottom have a number of investor owners (owners that don't live in the unit). Lenders don't like investor buildings. Refer to the recent mortgage crisis. In fact, you pretty much have to buy with cash in Foggy Bottom unless you have a creative lender. Loans are usually sold to Fannie Mae and Freddie Mac by whatever lender that finances the condo. Fannie and Freddie are currently no longer purchasing any loans in a building that has over a 50% investor ratio unless the purchaser is living in the unit. Since most of these units are being purchased by parents for kids, this poses a problem. The kid can't get a loan. He/She doesn't have a job therefore they have no income. It's proving to be quite a dilemma. In fact, this is the number one topic of conversation at most of our staff meetings.
Thankfully for the current owners, this snafu doesn't seem to be impacting prices dramatically. Studios continue to sell for 175K-250K in Foggy Bottom. Hopefully, this trend will continue and buying a condo for your kid will continue to be an option.
DC revolves around the Federal Government and the city is D-E-A-D in August. Congress is on vacation. The hoi polloi usually go on vacation too. Even the First Lady went on vacation! Traffic is non existent, reservations are easy to book and parking is a breeze. Usually, you can count on real estate being dead too. Except this August, it isn't. I'm baffled by the business cycle this year!
January was frantic. February was slow to due to Snowmageddon. March was decent. April and May were insane. In June, none of my buyers wanted to work on Saturdays. For the first time in years, I had four Saturdays off in row. Conveniently, it was also World Cup. For once, it was good timing. July was busy but two out of my three deals blew up. It was beyond depressing. I'm bouncing back in August and have my fingers crossed for the rest of the year.
Real estate is the strangest business! You work evenings, weekends, and holidays. You get frantic before every vacation. Inevitably, you work on vacation.
There is a part of me that wishes I could turn off my phone sometimes. Occasionally, I miss having a daily slog into an office. (I do have an office but I prefer to work from home.) Then I remember that I do horribly in offices and I hate office politics. There's a reason I'm in real estate and work from home.
I just finished a home inspection in a home where the electricity was off due to the thunder storms. The whole block had been electricity free since 7:30am. Clearly we have to reschedule. We completed the outdoor portion. It took 3 hours. With no AC and about 8000 mosquitoes. I now have mosquito bites on my feet, on my fingers and lots of other places I won't discuss. Although I'm an itchy and sweaty mess, I'm still happy to do it.
Hopefully, the busy trend shall continue into the Fall. As I've noted many times this year, inventory is LOW. Once again, I have clients that want to buy and I have nothing to show them. As August begins to slide towards September, I hope we'll see an uptick in listings and more people purchasing a home. If interest rates continue to hover at 4.3% (isn't that insane?), I think the market is going to heat up. We shall see!
For those of you not in the "know", the DC Homestead Tax Deduction is for DC residents whose home is their principal residence. If you reside in your property, the Homestead Deduction reduces your assessed tax value by $67,500. This is a substantial amount of money and one of the perks of purchasing in DC.
Before April 1st 2010, the title company where you completed your closing filed the Homestead Tax application. After April 1, 2010, the new owner will have to do it themselves. DC has changed the requirements. (Sneaky sons of a guns…they're trying to rake in every bit of revenue possible!) You'll need to provide your drivers license or government ID, your vehicle registration (if you own a car) and your voting registration. ALL three have to show your new address.
If your title company filed your application for you after April 1, 2010, it's not going to be accepted. You'll need to refile it with DC Gov with the evidence I mentioned. You can register online to vote. The rest you'll have to complete at the lovely DMV.
DC Gov is also looking for people that no longer qualify for the Homestead Tax and haven't canceled their exemption. If they discover that you know longer qualify, owners have been charged with penalties, interest and the additional tax they owe. Word to the wise: take care of this or it could get ugly. DC is not messin' around when it comes to it's revenue generating operations!
I'd like to give a shout out to Ricki, my broker, who wrote us an email detailing these changes. Thank you!
If you have questions or need links to the application for the Homestead Deduction or the cancellation form, email me or post a comment.
Jen Angotti is the creator of Concrete Jungle DC, a blog about real estate in DC, ideas on how to decorate and design your abode plus a variety of topics she loves: new restaurants and bars, DC happenings, food, and travel. Jen is a licensed realtor in DC and VA.
Rise Bakery, located at 2409 18th St, NW in Adams Morgan, is a gluten-free bakery. This is monumental news in my gluten free world. A couple of months ago, my husband popped by there and grabbed a few things: a bag of bagels, a loaf of bread, a banana nut muffin and a cinnamon roll. They were delicious and I was so exited. Good gluten free bread and pastries are hard to find. I had an appointment today in Adams […]