- The Washington Times - Thursday, May 20, 2004

Low inventory and climbing prices have led some area residents to give up on the idea of owning a home inside the District. From the fourth quarter of 2002 through the fourth quarter of 2003, the median price for existing homes rose 12.9 percent, to $292,100, according to the National Association of Realtors.

Those median prices hardly reflect the reality of how difficult it can be to find anything to buy — much less a town house or single-family home — for less than $300,000 in nearly any neighborhood of the city.

However, District Realtors say there are neighborhoods where the homes are more affordable.

Some of these “pockets of affordability” are in less-than-perfect neighborhoods, but that might point to a significant increase in the value of the homes in future years.

“There’s a great sense of renewed interest and viability in the city, similar to what it is supposed to have been like in the early 1900s,” says Realtor Edward Poutier of Tutt, Taylor & Rankin Real Estate.

“There’s a lot of new building going on, plus a lot of positive interest in recommitting to historical neighborhoods. Buyers can definitely find good value in some of these neighborhoods that are less well-known,” he says.

“You need to look at how the neighborhood is being taken care of, whether people take pride in their homes and yards, which can give you a sense of whether it will go up in value in the future,” Mr. Poutier says.

In this market, buyers need to be educated and ready before they start looking at specific neighborhoods.

“There are definitely areas in the District where first-time buyers can find homes, although they may not be the hottest spots in the city,” says Andrea Rothman, a Realtor with ZipRealty. “The best advice I can give is for buyers to do their research and to have a good idea of what they want.

“Start by being preapproved for a loan, because in this market no one has the luxury of taking a few days to think about a property,” she says. “Buyers are being forced into making split-second decisions, and they need to understand the market. In most places, even on the low end of the market, bidding wars are taking place. So buyers need to look at homes that are listed at least 20 percent lower than what they can afford.”

If a buyer’s budget is $200,000, then, he should look at homes priced at $160,000, Ms. Rothman advises, to allow room for a bidding war.

“Just recently, I saw a home in the Trinidad neighborhood in D.C. that was really a pit, on a scummy street, and listed at $120,000,” she says. “It had 11 contracts on it within days of being placed on the market.

“We’re predicting a 10 to 15 percent increase in prices in the next year, so there’s still money to be made in buying a home now and building equity,” Ms. Rothman says.

Buyers looking for more affordable homes often will need to compromise on the size or condition of a property and should expect to do some renovations.

“Buyers need to look at homes in areas where they wish to live, looking carefully at the values of the homes in those areas,” says Realtor Jane Davis Adams of Long & Foster Real Estate’s Bethesda Avenue office. “If people are patient, they can often come into an area and recognize a home that needs work to be done but see past the work to see the potential value of the property.”

Says Ms. Adams, “Sometimes people think they may not want to look in a particular neighborhood, but what’s available is what we need to work with.

“People need to adjust their minds to thoughts of homeownership,” she says. “Folks often choose to stay in an area once they have bought a home there and move up with the area in terms of looking for a place which is larger in size or better in quality.”

Buyers looking for affordable homes should educate themselves about particular neighborhoods or work with a Realtor who can advise them about different areas of the city.

“A Realtor can pull comparables from recent sales and previous sales in a neighborhood, which can show you what areas are increasing in value since last year,” Ms. Adams says. “Plus, we can look at how many days something stays on the market, which can give you an idea of how well the neighborhood is doing.

“People should find out about plans for development, such as new streets, retail or residential development or a new Metro station, which can make a place more valuable,” she says.

Potential buyers can learn a lot by simply driving around a neighborhood to determine whether they will be comfortable living there and to make an educated guess as to whether home values will improve.

“People need to drive through the neighborhood at least twice, once in the afternoon and once at 11 o’clock at night,” Ms. Rothman says. “They need to look to see what types of renovations are being done. If homes are being gutted and totally redone, that’s a good sign, better than if a home is just being marginally fixed up.

“If there are a lot of places for sale, investors may be intending to rent them out or flip them after fixing them up minimally,” Ms. Adams says.

There are several things to look for when driving or walking through a neighborhood to assess its character.

“You should look for physical changes to the homes and gardens and notice if there are people walking or jogging on the streets,” Ms. Adams says. “If they are, this tells you that people are comfortable with the area. You can look for notices of neighborhood-watch groups or community activities to find out what’s happening in a neighborhood.”

Ms. Rothman also recommends using the Internet to research a neighborhood.

“You can look up crime reports on the D.C. government Web site,” she says. “If you are not seeing a trend for the better, it’s not a good sign. You can also look up property assessments to see if they have been going up for the last 10 years or so. If the tax assessments have gone up, that means the neighborhood has improved enough that the D.C. government has noticed and has sent a tax assessor there to reappraise the values of the homes.”

Crime statistics can be found at www.mpdc.dc.gov, and property-sales statistics and assessments can be found at www.dc.gov.

Realtors have identified several areas of the city as places with the potential for providing affordable homes that will increase in value.

“The Petworth neighborhood, just north of Columbia Heights, is one area where there are still good values,” Mr. Poutier says. “You can get an unrenovated home, a row house with a basement or sometimes an attic, too, for under $300,000. Some have two bedrooms, and some have three bedrooms.”

“Historically, this has been a stable middle-class neighborhood, and it continues to be one,” he says. “Right now, there are lots of older people in Petworth, and lots of homes have been well taken care of but not updated. Buyers might want to redo the kitchen and the bath, refinish the floors or pull down some paneling. Some renovated homes in this area are selling in the high $300,000s and into the $400,000s.

“There’s lots of competition for homes there in that price range, especially because there is a Metro stop in the neighborhood,” he says.

Ms. Rothman recommends Brightwood, just west of 16th Street Heights; Eckington, Bloomingdale; and LeDroit Park.

“LeDroit Park is one of the oldest, most established neighborhoods in Northwest, with a lot of traditional Victorian mansions, which are beautiful architecturally,” she says. “Some of these are mansion-size places, with four or five bedrooms and three or four levels of living space, but they might have been somewhat neglected.

“There has already been a big resurgence of investors and new owners in that neighborhood, where the prices range from the $300,000s to the $600,000s, depending on the size and condition of the home,” Ms. Rothman says. “Even in the last six months, prices have risen enormously, so it’s pretty hard to find anything under $200,000 at all.

“Eckington and Bloomingdale are neighborhoods just south of LeDroit Park where you can find some Victorian homes for $400,000,” she says.

“In Brightwood, there are some semidetached and single-family homes for under $300,000,” Ms. Rothman says. “It definitely just goes street by street, and some homes have gone up by $100,000 in value just since last year.”

Ms. Adams recommends that buyers consider areas in Southeast Washington.

“I have a family that has asked me to sell a home in Hillcrest off Branch Avenue in Southeast,” she says. “It’s a custom-built home which is well-constructed, with a driveway and off-street parking. But because of the location, it won’t be priced at what it would in another part of town.

“Another listing on 16th Street Southeast, which was undergoing foreclosure but looked like it was in livable shape, was priced in the $130,000s,” Ms. Adams says. “This was a single-family home in a nice part of Anacostia.”

Other areas to search for affordable homes include Trini-dad, Brookland and Woodridge in Northeast.

“Brookland surrounds Catho-lic University, which is a huge presence in the community,” Ms. Rothman says. “You’ll find lower-end single-family homes and some inexpensive apartment buildings in the area.

“It’s sort of a sleeper neighborhood, even though Metro is there,” she says. “You can find single-family homes with wraparound porches and even some land priced from $250,000 to $400,000. It’s not really on the way to anywhere, so a lot of people don’t know about it.”

Mr. Poutier suggests Wood-ridge, just north of Brookland, to buyers looking for affordable homes.

“Woodridge is a beautiful community of mostly single-family homes, including garages and nice yards,” Mr. Poutier says. “There are bidding wars happening there now, but you can still find homes priced in the $200,000s and $300,000s. It’s historically been a solid middle-class neighborhood, and now the bidding wars are driving up the values there.”

Some areas that are somewhat transitional are seeing rapid increases in housing prices because of development plans around the city.

“Shaw used to be more of a transitional area, but it’s beginning to get expensive,” Mr. Poutier says. “The homes in Shaw now go for $600,000 to $700,000, and the prices are continuing to go up. Residents of this part of town can walk to the MCI Center and the new convention center, and Metro is right there, too.”

The Southwest waterfront area will be the scene of new developments in the coming years, including a revitalization plan for the Waterside Mall.

“Southwest is a good neighborhood with respect to value as long as you are buying there now,” Mr. Poutier says. “The values will go up over the next few years as the redevelopment continues. It’s on Metro and close to Capitol Hill, and it’s easy to get to and fro in that part of town.”

Ms. Rothman points to Trinidad in Northeast as a transitional neighborhood with some potential for increasing values.

“You can find a row house in Trinidad for under $200,000,” Ms. Rothman says, “but you might find yourself as an urban pioneer moving into a dicey neighborhood. Sometimes the neighbors all know each other and you can be on a great street, but on the next block, you can walk in on a drug deal.

“It’s definitely changing, and it used to be cheaper, but prices are rising here, too,” she says.

“Trinidad is the biggest investor area in the city right now; some [investors are] looking to rent out the homes, and some to rent them as Section 8 housing,” Ms. Rothman says. “That’s one reason the area is not changing as fast as some other parts of town, because you have fewer owner-occupants.”

Ms. Rothman says she thinks parts of Shaw, Trinidad and Anacostia are the least expensive parts of town.

“It’s the same story in all these areas — beautiful homes in not-so-beautiful neighborhoods,” Ms. Rothman says. “It’s a matter of trusting that the neighborhoods will change. From a socioeconomic standpoint, as more people buy homes for $400,000 and up, the people who have lived there for 40 or 50 years will begin to sell their homes, too, for higher and higher prices.

“By definition, this changes the neighborhood,” she says.

Buyers looking for affordable homes in older neighborhoods should be prepared to do renovations.

“Lots of buyers anticipate spending $100,000 to $150,000 to thoroughly renovate a home,” Ms. Rothman says.

“Most people plan to do the work themselves to save money. Plus, it can be months before a contractor will have time to work on the home,” she says.

Finding an affordable home in the District might not be easy, but persistent, prepared buyers can usually find something they can learn to love.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide