Broken Record: Massive Inventory Shortage in DC

There’s no longer a newsflash regarding the massive inventory shortage in the District of Columbia. “I feel like a broken record,” Tom Lewis, Redfin DC Agent explained, “but it’s the same story yet again!” In DC, inventory fell again over the last month.  As we move into spring, we should see the inventory line head back up as we did at this time last year.

“Buyers don’t want to lose that ‘home of their dreams,’ so they are being very competitive with offers,” Tom said. They’re using strategies like waiving inspection and financing contingencies, offering all cash when they can, and letting the seller choose the settlement date.  ”Just last week, after withdrawing an offer on a home that had received 13 offers, several of which were all-cash and with escalations up to $50K more than asking, my client decided to go for another property. We offered list price plus competitive terms and gave the seller 24 hours to respond. We did this so the property would be less likely to get multiple offers, and sure enough, our offer was accepted!”

For a complete picture of the local market’s most recent stats and trends, download the Redfin Market Report here: Redfin-Washington-Real-Estate-Market-Report-February-2012. Want to know how the Washington, DC real estate market is doing compared with the rest of the country? Take a look at the Redfin Heat Index:

DC Market Could Use Some More Condos

Last month, the number of DC condos sold plummeted by 32.4% from December. The dip in sales is explained by the fact that many home buyers put their home search on hold for the holidays, but the number of condos for sale also dropped 4% last month. Tom Lewis, an agent on Redfin’s DC team, explains that the local condo market is tricky because most condo buyers in DC are relatively transient, and many of those who bought five or six years ago at the height of the market are now ready to move into a bigger place or out of town.  A seller in DC has to factor in agent commissions of up to five or six percent (if they’re not selling with Redfin), as well as transfer taxes tacking on another 1.1% or 1.45% of the purchase price. So before they’re out the door they’re down about 6.5%. “I find that plays a huge role in how sellers price their homes, and I warn buyers that it leaves very little room for negotiations,” Tom said. A condo seller will also compare their offers with the option of renting. “Rents have actually gone down a bit in DC, but not by that much, so if a condo seller isn’t getting the kinds of offers that he’s looking for, becoming a landlord and covering the mortgage for a few years doesn’t sound so bad,” Tom said.

What Tom is seeing fly off the shelves are new construction condos.  They are typically priced a little higher, but still competitive with the resale market, so buyers are willing to pay a little more for a brand new home. “Small boutique buildings, like 1793 Lanier Place NW, are so hot on the market that they are selling out before buyers have a chance to go see them.”

Speaking of heat, January was unseasonably warm for home tours as well.  According to Tom, “buyers didn’t ease into their home search this winter like they normally do.”   In fact, Redfin DC agents took buyers on 43% more tours this January than they did in December, and more tours than any month last year.  “The demand is certainly alive and well, but we’re all still waiting to if the sellers follow suit and supply some more options for all the buyers out there.”

For a complete picture of the local market’s most recent stats and trends, download the Redfin Market Report here: Redfin-Washington-Real-Estate-Market-Report-January-2012. Want to know how the DC real estate market is doing compared with the rest of the country? Take a look at the Redfin Heat Index:

The Redfin Heat Index (Beta) uses listings, sales, and price changes to determine the relative “heat” of a given real estate market. We set a baseline Heat Index of 75.0 at 6.0 months of supply and +5 % price change year-over-year.
Every percentage point increase in prices above the 5% baseline will increase the heat index by two points, every percentage point decrease in prices below the 5% baseline will decrease the heat index by two points.
Every one month of supply increase above the 6.0 baseline will decrease the heat index by seven points, every one month of supply decrease below the 6.0 baseline will increase the heat index by seven points.
Here’s the formula:

• MOS = Months of Supply: End of Month Inventory / Closed Sales in the Month
• $YOY = Year-over-year change in the median price per square foot.
• Heat Index = ((MOS – 6.0) * 7) + (($YOY – 5%) * 2) + 75

Now Redfin Helps You Tour Short Sales in Prince William County

Looking for a home in Prince William County? We just made it easier to tour and buy short sales!

You can now tour short sales with your DC-area Redfin agent in Prince William County. If you find that perfect short sale and you want to make an offer, we’ll connect you to a short sale partner agent who specializes in the short sale process.

We know you want the flexibility to tour short sales with your Redfin agent, and to make offers if you find the right home, short sale or not. It’s true that the process of buying a short sale can be a bit of a grind, but we’re hoping that the federal government’s new program to streamline the short sale process will help speed things along.

To tour a short sale property, just click the “Go See This Home” button in the top right corner of the home’s listing details page.

Thanks everyone! We’re looking forward to helping you find that perfect home, whether it’s a short sale, a bank-owned property, or a traditional home purchase.

Thinking About Selling Your Home? Come to Redfin’s Free Washington Metro Area Home Selling Seminar

Ready to sell your home? Unsure about where to start, or how to pick the right price in this market?

Redfin is holding a free home selling seminar in Rockville, MD on Tuesday, June 29^th from 7:45 – 9:30 p.m to answer all your questions.  Our Montgomery County team lead Nick Chaconas and DC area market manager Karen Krupsaw will be discussing the issues every home seller should know about, including:

• Preparing your home for showings
• Tips for effective staging
• Pricing your home effectively
• Negotiation strategies
• Working with inspections & understanding contracts
• Fees and paperwork
• Closing the deal

We have a short presentation prepared, but mostly we want to answer your questions and discuss the home selling topics that interest you.

We’ll also have plenty of free food and drinks.  Hope to see you there!

RSVP for our free home selling seminar on June 29^th.

The DC First-Time Home Buyer Tax Credit

With all the attention paid to the national home buyer tax credit, a local tax credit has been overlooked by many DC home buyers. But now that the deadline for entering into a contract and qualifying for the national tax credit has passed, this more modest local tax credit is getting some renewed attention.

Unlike the state tax credit being offered in California, the DC home buyer tax credit could not be claimed by anyone going after the national tax credit; you had to choose one or the other. Now that the local credit is the only game in town, it’s worth checking out if you’re planning to buy a home.

Here are the details:

Who qualifies for the DC tax credit?

The tax credit is aimed at people buying their first principle residence in the District of Columbia. This means that owning a previous primary residence outside of DC does not hurt your eligibility. If you haven’t owned a primary residence in DC, you qualify for the local tax credit, even if you’ve previously owned homes in other areas.

Also, you qualify as a first-time DC home buyer as long as you haven’t owned a DC home in the one-year period prior to the purchase of your home. The national tax credit had a stricter requirement; it required buyers to have no primary home ownership for three years prior to home purchase.

How much is the DC tax credit worth?

The credit’s value is the lesser of:

• Up to $5,000, if single, married filing jointly, head-of-household, or qualifying widow(er), or $2,500 if married filing separately
• The purchase price of the home

What types of homes qualify for the DC tax credit?

The home must be your primary residence. It can be a single family home, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence.

Are there any income restrictions for the DC tax credit?

Yes, there are income restrictions, based on your modified adjusted gross income (MAGI):

• If your MAGI is $70,000 or less ($110,000 or less if married filing jointly), you qualify for the full $5000 credit.
• If your MAGI is between $70,000 and $90,000 ($110,000 and $130,000 if married filing jointly), you qualify for a partial credit; the more you make, the less credit you receive.
• If your MAGI is over $90,000 ($130,000 if married filing jointly), you do not qualify for the credit.

Are there any other restrictions?

Yes, there are a few other restrictions. You do not qualify for this tax credit if:

• You acquired your home from certain related persons or by gift or inheritance. Related persons include, but are not limited to, your grandparents, parents, spouse, children, and grandchildren.
• You previously claimed this tax credit on a prior home purchase.
• You qualified for the national home buyer tax credit.

How do I claim the DC tax credit?

You must fill out IRS Form 8859 and submit it with your annual tax returns.

We hope that answers most of your questions about the DC home buyer tax credit. But as always, if you have questions or comments, please leave a note below and we’ll do our best to get you the info you need.

-Fernando Ferrufino, with assistance from field agent Stuart Gavan

NW DC SQFT Deals of the Week

Ahhhhhhh – I feel much better now. I just changed the radio station away from NPR and the overwhelmingly negative stock market news to instead listen to my favorite 80s tunes on 104.7 FM “The Globe.”  Anyone with me on that?

For those of you who need a home and have managed to secure a loan, here are a few sweet deals on offer. I only looked at houses because condo fees complicate the matter of value/sqft. My picks are all low in terms of $$/sqft compared to the surrounding neighborhood but they also have other attributes that made them stand out.   

Deal#1: Chevy Chase (DC), where average price is $337/sqft

3205 Beech St NW - $729,000 REDUCED - $189/sqft- 4 beds/3 baths split level house. This house is in a very leafy neighborhood close to Rock Creek Park. It originally listed for $879,000 and has been on the markt for 6 months. Sellers are ready to MOVE IT. 

Deal#2: Georgetown, where average price is $647/sqft

3344 Prospect St NW - $1,350,000 REDUCED – $397/sqft – 4 bed/3 bath historic row house on a famous street in the heart of the west village. The house has been renovated and includes an in-law suite. It has only been on the market 15 days, originally at $1,449,000. It looks like the sellers are reading things correctly and don’t want it to sit for months.

Deal#3: Columbia Heights, where average price is $277/sqft

517 Rock Creek Church Rd NW - $595,000 – $189/sqft – 4 bed/2 bath Spanish-style semi-detached house. This is a very pretty, restored home that was built in 1905. It has lots of wood trim, new appliances and a full in-law suite. The sellers say they will look at all offers. It has been on the market for a month.

>Find open houses in NW DC this weekend 
>Find open condos in NW DC this weekend

Related post:
>Don’t Make an Offer Yet

Cheers,
Allison

Photo: Mad African/Pineappler under Creative Commons license

Posh Not Selling in Kalorama / Fixer-Upper Will Sell

They say that if you have a lot of money then a down market can be the best time to buy. Well, maybe that will get wealthy Kalorama moving soon – because it ain’t moving quickly now! On a single block of Wyoming Ave NW there are four properties for sale.

The latest is this federal-style row house at 2128 Wyoming Avenue NW. It has 4 bedrooms, 3.5 baths, and all-important parking. The interior photos looks okay but the decor does not appear updated. It is listed at $2,150,000 and will be open on Sunday, Oct. 12 from 1-4 pm. 

Best of luck to this seller, who is not the only one to put a house on the market in the last two weeks. Interesting timing. I wonder if any Kalorama mortgages will be bought out and renegotiated under the proposal McCain made in the debate on Tuesday night?

Kalorama Fixer-Upper More Likely To Sell

For buyers with less money but high aspirations to live long-term in this beautiful neighborhood, here is a rare and potential major opportunity: one of the last fixer-uppers in Kalorama. It is a 7 bed/3 bath row house at 2158 California Street NW. It looks like it was abandoned once and has been awaiting renovation for some time. The list price is $850,000, which is what you could pay for a large 2-bedroom condo in this neighborhood! My mouth is watering and my imaginary self is snapping it up.   

Related posts:
>Walk this Way: Kalorama

Cheers,
Allison

Reduced Again: Coveted Hall Place in Glover Park

A lot has been written about the charms and assets of Glover Park, including by me. Well, now’s your chance to live on a little one-way street that all the neighbors know about  but only a few people can own: Hall Place NW.

The fully renovated, 4-bed/4.5 bath Victorian row house that has been for sale there for many weeks was just reduced for a second time, to $995,000.  The original price was $1,149,000.  

 
Hall Place is parallel to Wisconsin Ave NW, just a block from Whole Foods,  a string of good restaurants, Starbucks, a hardware stor and other shopping, CVS, the Guy Mason Recreation Center/Park, and more. In other words, it is a highly convenient place to live even though it is a quiet street with a very residential feel. And that’s just the beginning. Everything green and park-like about Glover Park can be found starting a couple of blocks the other way. For families, Stoddert Elementary School and Hardy Middle School are also within walking distance. 

Another nearby price reduction that stood out today is a 2 bed/2.5 bath condo in the new-ish luxury residence at 2501 Wisconsin Ave NW, #403. You know the building … it is pictured below. It overlooks the intersection of Wisconsin and Calvert, above Guy Mason park and leading you towards the good old Veep’s house on Observatory Circle.  

The price has now been slashed by $200,000 to $1,049,000. Too bad there are not many interior pictures on the listing. I wonder if they would be as breathtaking as the original price plus the $773/mth condo fee?

In the same zip but moving south-east to more expensive Georgetown, I noticed a sweet red brick house that was just reduced, at 1664 32nd Street NW. Now selling for $799,000, it’s a classic 2 bed/1 bath colonial row house with all the charm, style and small spaces that would satisfy a person craving this kind of home. It oozes that “old Georgetown” feeling. The location is great too - meaning not far from bus transportation and walkable amenities. 

More info:
>Reduced prices  in zip 20007 (Berkeley, Burleith, Glover Park, Georgetown, Obs. Circle, etc.)
>Current listings in zip 20007

Related Posts:
>More for your money in Glover Park

Cheers,
Allison

Embassy Row: $2 Million per Bedroom

I am still focused on price reductions and Dupont Circle this week, but today I also want to see what kind of house you can get at the high end, median and low end of the listing price spectrum. The median list price for a house right now is $1.145 million. I would guess the homes shown below on beautiful 19th St NW are valued at more than that … I just love this photo.

Check out the “recently reduced” property selling for $15,900,000 on Embassy Row. Yes, that’s right, it’s not a typo. The address is 1714 Massachussets Ave NW. You’ll need more than $2 million for each of the six luxuriously appointed bedrooms. But that’s a bargain compared to the original $17 million price tag. I wonder if the furniture is included?! 

Not Quite as High End:  With neighbors like those on ”Mass” Avenue, it doesn’t seem outrageous to spend $1.55 million on an 8 bed/3.5 bath row house at 1926 17th Street NW. This wonderful Victorian was built in 1907 and has been fully renovated, including the brick patio out back. It has been on the market for 22 days and was reduced in price this week from $1.69 million. My guess is that it will not last long.

Closer to the Median:

You can get a 4-bed/2.5 bath colonial row house at 1313 22nd St NW, south of the Circle. The price was reduced last week by over $100,000, to $1,095,000. It has been renovated. It also has 2 parking spots!!!!  

At the Lower End:

There is a tidy 3 bed/1.5 bath federal row house closer to Adams Morgan at 1650 Florida Ave NW for $649,000. It looks cute. It has been on the market for 19 days with no price reductions yet. Open Sunday, Oct. 5, 1-4 pm.

Before you make an offer, learn about price reduction trends in your target neighborhood.

More info:
> All houses for sale in Dupont Circle
> Recent sales in Dupont Circle (condos and houses) 

Cheers,
Allison

Photo: NCinDC under Creative Commons license

Fabulous Dupont Circle for Under $500/SQFT

Stop and look! I just checked out recent price reductions in Dupont Circle. Below are two that stood out.

Chosen for Style:

- A very nice 2-bed/2 bath condo at 1735 New Hampshire St NW, just reduced to $585,000, from an original of $635,000. Sellers are willing to offer closing help. It is an older building that has been renovated. The unit has high ceilings, hardwood floors, fireplace, clean decor, S/S appliances, shared patio, and more. The lobby and hallways have some grace – not like living in a Ramada Inn. The price puts it at only $488/sqft, which is lower than average (see below.) The condo fee is $387/month. 

Chosen for Space and Light:

- A 2 bed/2 bath condo at 1280 21st St NW, #207,  with a new price tag of $524,900 after only a few days on the market (down from $549,000.) I usually go for the older buildings but the spaciousness and huge windows of this 1967 corner unit would make me think twice. It has 1,200 sqft, putting it at $437/sqft. Ooops – the condo fee is $837/month, so it’s not such a bargain after all. Maybe the roof deck is lined with precious metal.

- Note, there is another, smaller 2 bed/2 bath unit for sale in this building for $475,000. It was reduced in price from the original $550,000 a couple of weeks ago. The condo fee for that one is $699/month. 

By the way …

Median Condo Values Based on Last 6 Months (source: Redfin.com) 

Word of caution: Remember to check the financial situation of any building you are buying into (especially these days!!!)  If your building gets into financial difficulty and needs more capital for maintenance, it is YOU who will pay.  

More info:
> All condos for sale in Dupont Circle
> Dupont Circle Stats & Trends

Related posts:
> Dupont Sells Bloomingdale Swells?
> $50,000 Parking Spot

Cheers,
Allison

Photo by Voteprime, Creative Commons License