Sunday, March 22, 2009

The hunt begins

Having watched District home and condo prices explode and then swoon, my partner and I have decided to leave the security of our home's affordable lease and venture into the wilds of the DC housing market.

We looked at one condo, two homes, and two townhouses this weekend. Having sold real estate in New Orleans and owned two homes in the past, I had an idea of what to expect re: the buying experience. Yet the questions still come up when looking at a home:

  • What were they thinking of when they did that?
  • Do they really think this place is worth that much?
  • Don't you think there's a little too much pink carpet / wallpaper here?
  • Why don't they just come out and call this a tear down?
  • Why is the stairway in the middle of the room?
  • Why is the HOA so high?

And of course, the classic: Why are we doing this to ourselves?

Given the price range we can afford and our desire not to buy a condo [not that there's anything wrong with them], this may be a long hunt.


10 comments:

Anonymous said...

Good luck with your hunt! It'll be an adventure, for sure.

You did miss a few questions that come up when looking at homes:

-Where is that weird smell coming from?
-Are you really allowed to call a room this tiny a bedroom?
-Why didn't they go ahead and fix the water damage before putting this place on the market?

Anonymous said...

I agree Keith - it seems like this is as good as it is going to get - still a decent amount of inventory and we have seen some price delines.

I will be out there pretty soon too I think. Good luck.

Keith said...

Anonymous 8:46 -

If you're in a high rise condo, the smell could be someone's cooking from down the hallway. That being the case, one could ask, "Why do they use so much garlic?" :-)

Anonymous said...

We looked at a place in AU Park a few years ago that smelled like a body was hidden away somewhere. Definitely a bad sign when the real estate agent opens every window in the house before the showing!

jm said...

Wonderful site, please keep it up.

Anonymous said...

Except for areas where prices have collapsed, after the current downturn, US housing prices will be flat for a very long time.
On a global level, US salaries are too high and will only decline or stay flat as globalization continues.

Anonymous said...

Why is property held as some kind of holy grail when it comes to valuation? Property is like any other commodity and it can go up or down in value.

Today's valuations in the DC market are driven by sellers who expect their property should make them money rather than loose money. I'll be the first to say that I wouldn't get into real estate with the expectation of loosing money however, sellers need to get real and understand that today's buyers don't want to pay the overvalued prices sellers want.

California had the same experience in valuations and finally reality hit the market. Not every piece of property is equal and current sellers need to realize that what they are sitting on is just not worth what they bought it for.

Lenders and real estate brokers help with this problem because when you boil it down, it's all about commissions and making $$$. Everyone's got to make a living but get real!

ibc said...

sellers need to get real and understand that today's buyers don't want to pay the overvalued prices sellers want.

All depends on what you're selling. As you said, "not every piece of property is equal". I have friends who are still getting into bidding wars over desirable Capitol Hill 3 BR houses as if the housing bubble had never burst.

The blog owners experience ("You need to lower your prices! Don't you know it's 2009!!") is pretty common. Houses are worth what someone's willing to pay, and even at this late date, the most desirable areas in the city have a shortage of SFH's that are problem-free.

Having said that, you can finally pick up a dysfunctional tear-down for what it's worth.

Keith said...

ibc

A seller's reluctance to price to what the market will bear results in no sale. I'm not saying "lower your price," I'm saying "price realistically." The 2009 market is not like that of 2004-2007.

While there are instances of multiple bids with [God forbid] escalator clauses for a particular property, it isn't the rule anymore. Sellers' expecting that to happen are fooling themselves and are either not listening to their real estate agents or have a bad agent.

I have first hand experience with this. I listed my house for sale many years ago. I set a ridiculous price that the agent didn't contradict. Two contracts came and failed to go to closure. With a change of real estate agents, I got the following advice: the problem isn't the house, it's the price. When the agent showed me the neighborhood comps, I adjusted the price and sold in two weeks.

ibc said...

A seller's reluctance to price to what the market will bear results in no sale.

Sure, I get your point. Just saying the raw numbers often fail to tell the whole story. While we're trading anecdotes: my neighbor across the street just sold their 820 sq ft row house on Cap Hill. After about a month on the market, it sold for $435k. This is a house that sold for around $390k in 3/2007. Ten year appreciation? About 290%.

(http://www.zillow.com/homedetails/260-Warren-St-NE-Washington-DC-20002/423579_zpid/)

What could possibly justify that sales price in this market? The buyers spent at least a month shopping around for an alternative house to buy, and obviously couldn't find what they were looking for.

My point was that *some* sellers are fooling themselves; others clearly aren't. I think it depends on what you're selling, and what a buyer's alternatives are.