- The Washington Times - Friday, August 24, 2001

Apartment-dwellers in the Washington area are suffering from high rents, even as prices fall in other cities. But prices will drop if the economy continues to falter, housing experts say.
That's what Eric Rye is betting on. He just locked in a lease, but he plans to keep looking for a better deal and pay the $600 penalty fee to get out of his lease.
Mr. Rye, 31, found an apartment a one-bedroom, ground-floor apartment with a view of the parking lot for $950 by walking around neighborhoods and stopping by large buildings and asking about vacancies.
Earlier this week, he haggled with a front desk attendant at a complex on 16th Street NW, near U Street, until she conceded there was one vacancy but a woman had put down a deposit on it and had to sign her lease by 1 p.m. that day.
"It was 11 a.m.," said Mr. Rye, who had been searching for an apartment in Northwest since he returned from a long trip abroad last week. "So I went back at 12:45 p.m. and they hadn't heard from her. We waited until a bit after 1 p.m., and I got the lease."
Rents skyrocketed in the region over the past few years during the economic boom. Prices have climbed as much as $300 a month, or about 8.5 percent, according to Delta Associates, an Alexandria firm that tracks rental properties typically made up of more than 100 units and run by professional real estate companies.
Meanwhile, the sluggish economy has prompted vacancy rates to inch up to about 1 percent in the second quarter from a low 0.3 percent last summer.
Mark Teather, director of Delta's Apartment Practice, said that although rents remain high, the rise in prices will come down to a more historical 4 percent to 5 percent by next summer.
"We're starting to see that tail off in Northern Virginia and Fairfax, going towards Loudoun they have felt it the most," he said. "That's not surprising since the area was most well-represented by the technology industry."
"D.C. has seen its rents slow down and suburban Maryland, too. Suburban Maryland has held on probably the best," he added.
The price at District high-rises jumped to $2.53 per square foot a month in the second quarter, or $2,144 for an apartment of about 850 square feet, according to Delta.
In Bethesda, the prices were lower at $1.96 per square foot, or $1,818 for a 930-square-foot apartment. Northern Virginia was the most affordable at $1.77 per square foot, or $1,565 for a high-rise apartment of about 885 square feet.
A year ago, prices in the District were $1,817, or $2.17 per square foot; $1,624 or $1.71 per square foot in Bethesda, and $1,442, or $1.62 per square foot, in Northern Virginia.
"Northern Virginia had seen its rents go up quicker," Mr. Teather said. "But it has also been easier to develop in Virginia, so they have had more supply coming in, whereas in the District you have not seen much developing at all until the past year or two."
Management company representatives say they have just as many applications as a year ago, though people are looking for lower rents.
"In these times we got more calls looking for lower rents," said Thomas Kouyeas, office manager at Calomiris Investment Corp., which manages about 1,600 mostly rent-controlled units in the District. "And maybe a year, two years ago, the sky was the limit.
"People are looking for less-ex-
pensive housing, so demand hasn't slowed down, but people are trying to cut down on expenses," he said.
Gene Anulewicz, a supervisor with the Barac Co., which runs about 3,500 units in the region, mostly in 12- to 24-unit buildings in the District, said the company is seeing "just as many applicants as we did before."
The company offers rents ranging from $350 to $600 for efficiencies and small one-bedroom apartments in low-rent neighborhoods.
Another leading agent, at Southern Management, which manages more than 65 buildings mostly in suburban Maryland, said demand is as high as ever.
"I see a stability in" the Maryland housing market, said the agent, who wished to be identified as Eric. "In my personal view, I'm thinking they might outprice themselves."
Justin Torres is dreading having to look for an apartment by November, when his one-year lease on Capitol Hill expires and the rent will likely rise.
"Finding an apartment in D.C. was was one of the worst logistical nightmares in my life," said Mr. Torres, referring to his search nine months ago. "It's a total rat race, people are nasty and rude, and landlords start taking bids and things like that. For us, an average middle-class married couple, it was really hard to find a place."
He went to an open house for an apartment in Adams Morgan, showing up an hour earlier than the scheduled time but encountering nearly 100 people already waiting, he recalled.
The landlord gave tours in groups of 10. As Mr. Torres' group walked in, a man immediately offered the landlord a year's worth of rent upfront, before seeing the rest.
"There's no way to compete with that," said Mr. Torres, who will be moving with his wife and newborn baby to Northern Virginia later this year.

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