Tuesday, January 22, 2008

Dupont Renaissance: Update

Choices, choices.

You may recall my analysis of the Dupont Renaissance, a 15 unit building located on 1704 T St NW, 20009. As I mentioned in the post, within the first month of its closing approximately 75% of its units were being flipped by its "investors." My records show that three have flipped, two with a nominal profit.

I'm now scrubbing the District's sales data for November 2007. As I meander through the data, I've noticed a few units that have recently sold for significantly less than their original sales prices. Random examples:

  • 1125 12th St NW #34. Sold 11/23/2007 for $300,000. Original purchase price: $370,000 on 11/07/2006. Market reduction: 18.9%
  • 3900 D St SE #302. Sold 11/19/2007 for $139,900. Original purchase price: $220,000 on 12/06/2006. Market reduction: 36.4%
  • 1451 Belmont St NW #117. Sold 11/23/2007 for $387,000. Original purchase price: $600,185 on 10/13/2006. Market reduction: 35.5%

Anyway, as I was perusing the Internet to scrub the data, I saw that 1704 T St NW #202 will be auctioned at a foreclosure sale next week, January 31, at 11:04AM. It's a 2/2 of about 900 sq ft. Deposit of $22,000 required. However, I also found that it's listed for sale for $587,000 [MLS ID: DC6612671] or $652/sq ft. It was originally purchased in December 2005 for $529,900.

So a buyer's choices are:

  • Go to the auction next week and get it for a good price if it's still available, or
  • Buy it for a "boom time" price and hand the desperate seller a nominal profit of 10%.

And the seller's choices are:

  • Sell the condo at a loss and minimize damage to his/her credit, or
  • Lose the condo to foreclosure and kiss his/her credit good-bye.

BTW, a unit at Gallery Place Residences is being auctioned at foreclosure, too.

Update: You might want to stay away from #202. The seller hasn't paid his property taxes since 2006 and the condo association put a lien on the condo [since removed] last year. This wouldn't be a pretty one to deal with.

6 comments:

Angelica said...

You may be right about now being a good time to buy. And seemingly those who want to purchase 'investments' are heading southwest into DC from the suburbs they were purchasing their properties in. Just outside the district line in PG county you can purchase foreclosed home after another for minimal down and still generate an income based on a loose structure that the real estate law in PG county provides. For those who find the itch to buy but still cannot afford the DC 'investment'.

Anonymous said...

Housing prices to free fall in 2008 - Merrill
According to a Merrill Lynch report, home prices will drop 15 percent this year, and declines will continue in 2009.


http://money.cnn.com/2008/01/23/real_estate/merrill_forecast/index.htm?postversion=2008012313

Anonymous said...

By David Goldman, CNNMoney.com staff writer
January 23 2008: 1:44 PM EST


Video
More video
Housing prices fall as foreclosures are on the rise.
Play video

NEW YORK (CNNMoney.com) -- The worst housing financial crisis in decades is only going to get worse, a Merrill Lynch report said Wednesday.

The investment bank forecasted a 15 percent drop in housing prices in 2008 and a further 10 percent drop in 2009, with even more depreciation likely in 2010.

By contrast, the National Association of Realtors (NAR) expects housing prices to remain flat in 2008. NAR did cut its home price estimate for the current quarter, however, to a 5.3 percent year-over-year decline, which represents the steepest drop in that price measure on record. But NAR sees an uptick in home prices in the last two quarters of 2008.

"Merrill Lynch's figures are way too pessimistic, and they are unprecedented," Lawrence Yun, the National Association of Realtors chief economist told CNNMoney.com. "There is so much variation in local housing markets, and we see stable price conditions for 2008."

The current housing crisis and the depreciation in home prices have pummeled the economy, with businesses and consumers cutting back on spending, raising the specter of a recession. "Lower sales and higher inventory for sales are lowering the velocity of transactions," said Fritz Siebel, Director of US Property Derivatives for Tradition Financial Services. "That cannot be a sign of good health for the economy."

But for those who think that the worst is over, Merrill Lynch said that housing prices still remain comparatively high. The brokerage believes that home prices are still far above historical norms when compared to other measures such as rent or GDP. "By our calculations, it will take about a 20 to 30 percent decline in home prices to correct this imbalance," said the report.

captain.jim.t.kirk said...

HYE MAN
YOUR AWESOME, KEEP UP THE GOOD WORK. DON'T LET THE NAYSAYERS TROUBLE YOU. YOU ARE DOING GOOD JOB, NON ONE IN DC, IN THEIR RIGHT MIND, WOULD WANT TO MESS WITH YOUR DATA.
CHEERS (BTW: JAN 24TH 1935: FIRST CANNED BEAR CALLS FOR DOUBLE CHEERS)

Anonymous said...

What's the problem with the tax lien on either the sale or the foreclosure.

If you bought it, the tax lien would have to be cleared for the settlement to be completed, right?

Keith said...

Yes, all liens would be taken care by the title company [one assumes]. The issue is the time it takes to get clear title.

Not only had the condo's owner not paid 2007 property taxes, 2006's had not been paid and were sold at last year's tax sale. So you have two processes involved: clearing the 2007 taxes and then dealing with the holder of the 2006 taxes, which involves going to court [I believe, based on the last time I looked at tax sales].

And that assumes there are no other entangling issues that haven't been revealed.

I wonder if the condo's listing agent has disclosed all these little complications. It would be required in Louisiana, where I had my license. But then, that's LA.