Are Things A Little Bubbly In DC?

Question

I am not one to say the sky is falling. I generally feel like there are strong fundamentals to the prices in the DC market. However I just saw this property close at $830k, which I feel was probably only a $700k property. How do my fellow Washingtonians feel about this Petworth property feel about the closing price of this property? It seems too far north and east to garner this price. Now I never made it inside, but what I can see the only thing that sticks out to me as being out of the normal with the renovation is the tray ceiling in the living room....which is a nice feautre, but not a $130k value add. The only other properties that far north to close at prices close to that have been significantly larger...like 20% larger.

@Account Closed Ive had some discussions with you about this specific neighborhood.

http://mrislistings.mris.com/DE.asp?k=4016296X52B4&p=DE-309273001-37

Account Closed Ive had some discussions with you about this specific neighborhood.

http://mrislistings.mris.com/DE.asp?k=4016296X52B4&p=DE-309273001-37

Account Closed · Answer

@Russell Brazil, I'm confused... a quick glance at wmata's site says that that house is .14 miles from the bus stop that goes directly downtown... 22 mins total estimated travel time (including walking time) to Metro Center and 26 to Federal Triangle.  According to Google Maps, from the rear alley access, it's 371 feet to the bus stop.

How much closer to a direct downtown bus route are buyers looking for?  I thought folks in the city were largely walkers?

Bobby Montagne · Answer

Certainly seems that Petworth is a over amped as far initial strike price for acquisition and reno. Certainly places a premium on budgeting and timing for making improvements as margins are certainly squeezed. North Arlington and Falls Church markets still seems quite strong but I am certainly seeing an oversupply of tear downs in Vienna Woods market. Lat count showed 13 newly completed tear downs on the market (including those u/c)..

Sara N. · Answer

@Russell Brazil totally agree with you. Over priced & not the most convenient location to public transportation. But I guess when you're buying it to live in it for you and your young family, with hopefully a good school the kids can get into, it's not looking at it through the eyes of investors.

Kevin Harrison · Answer

I think more than likely this was someone who just really wanted the place. Now if this starts to become a trend then maybe there will be something to it. Although as you said @Russell Brazil, there is always strong demand here and I doubt a "bubble" will get too out of hand before the market corrects its self. DC is one of those places where there will always be more demand than supply.

Russell Brazil · Answer

Maybe there is a bus route over there I'm not familiar with. It is though still far away from Georgia where prices increase.

Russell Brazil · Answer

Account Closed That is actually too far from the metro to create what I call the Metro Premium.  That would be considered close enough in the suburbs, but not in the city.  Also properties closer to Georgia Ave, west of there will be more valuable, since they are at least close to the bus lines and commuting route. This is a rather inconvenient location in the neighborhood.

I try to get inside most of the properties in this neighborhood...this one I didnt because I thought the asking price was crazy and it would sit a long time. It goes to show you even us professionals can be quite wrong. Now I wish I had gone to see it so I could understand what made this property so special to sell so high.

Account Closed · Answer

I think an investor out there is quite happy at the moment... looks like they bought the place for $300K in September, and had it under contract in December for $830K after a mere 11 DOM and no subsidy.

As for comps being larger @Russell Brazil, how much is that a really a factor for the demographic buying in the area?

@John Fabros, isn't that particular property less than 3/4 mile from the nearest subway stop... is that not considered relative access there?

On another note, as FYI, the coffered ceiling is likely a capitalized consequence of creating the open floor plan and adding central HVAC... concealing a dropped beam(s) perhaps, to create the openness, and at least in the Kitchen area, it is concealing ductwork.

Israel Kloss · Answer

So the listed sale price does seem extremely high. Staying on the same regional topic, we are curious to know professional opinions on our recently-listed Falls Church property? Too High? Too low? Just about right?

http://www.mrishomes.com/homes-for-sale/138-BIRCH-...

We were originally entertaining 3 different investors who wanted the property for renting but they low-balled me so we moved into the residential market 2 weeks ago (and again got low-balled post-inspection). It needs $1,300 in new windows. That's all ... and they asked for a $20k price decrease! WHAAAAT?

Do investors expect $20k discounts on property that brings $1950/month EASY? I've had 3 renters BEGGING me for this place EVERY YEAR I've rented this property!

Is this low-balling just the nature of the market in greater DC? This is NEXT DOOR to West Falls Church metro and the #2 high school in VIRGINIA!!! Come ON??!!

Vasa G. · Answer

Yeap, they used coffered ceiling to cover ductwork and they run beam support there too so there is no horizontal beam support.

Are Things A Little Bubbly In DC?

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