Real Estate DC Metro

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• Real Estate for the Young or First Timers
• National Real Estate News and Trends
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• Green Real Estate - learn about the how the Real Estate Industry is going Green and some of the cutting edge practices getting them there. **NEW

Area Updates 

• DC USA MALL - COLUMBIA HEIGHTS updated (3/6/07)
  It's been a year since my last DC USA Mall post, but the building has just topped out in its construction schedule. Expected completion date is February '08 when such retailers as Target, Best Buy, Bed Bath & Beyond, Washington Sports Club, Staples, Marshalls, Old Navy, Radio Shack and Lane Bryant will open.
• Condos For Sale (1/24/07)
  We have heard a lot about the swarms of people who bought condos as investments in the DC area. I was even told that 65-70% of condos bought in the last three years were purchased as investments. This means that either the investors are renting them out now or are looking to sell. The median condo price in the area has dropped slightly mainly due to these investor sales, but what about developers? A recent discussion I had with a few notable developers in the area shows that the developers can hold their prices. If a developer was aiming at the $400k market and today the market would actually pay $380k, he is still apt to hold on to the $400k price tag. 1) He is a developer for a reason, he can afford to hold on to the property. Whereas investors may need the cash now, developers don't. 2)He knows that even though we are experiencing a slight trough in prices right now, the natural tendency is for prices to increase; he can always wait till next year and sell for $420.
  
  So, people who are looking for deals, look to the secondary market. The place won't be brand spanking new but you might be able to squeeze a bit more out of a small guy than a large developer.
• TAX CHANGES -
  Real Property Tax Rate Changes to Take Effect October 1 - The Office of Tax and Revenue (OTR) would like to remind homeowners of the following real property tax law changes that will take effect October 1, 2006:
  
  * Residential Property Tax Rate: The tax rate for residential properties will be reduced from $0.92 to $0.88 for each $100 of assessed
  value. This reduction in rate will first be reflected on the March 2007 real property tax bill.
  
  * Homestead Deduction: The deduction will increase from $60,000 to $63,000 of assessed value. For 2007, the deduction will amount
  to $554.40 in tax savings, and the savings from the deduction will be reflected automatically on the tax bill. If a homeowner has not applied for the deduction, he or she is encouraged to do so immediately; the deduction cannot be granted unless the homeowner has first applied.
  
  * Real Property Recordation and Transfer Tax Rates: Transfer and recordation tax rates will increase from 1.1 percent to 1.45 percent for
  deeds of title to all commercial properties and those residential properties sold for $400,000 or greater. The recordation tax rate will also increase from 1.1 percent to 1.45 percent for security interest instruments (such as mortgages and construction loans) to all properties, unless otherwise exempt. For example, security interest instruments on residential properties with five or fewer dwellings are exempt from any deed recordation tax.
  
  * The recordation tax on economic interest deeds, where property is transferred by the sale of the business owner's equity, is not
  affected by these increases.
  
  For additional information on real property tax rates, visit the Real Property Service Center, call (202) 727-4TAX (4829), or visit OTR's Customer Service Center at 941 North Capitol Street, NE, first floor.
• DC USA MALL - COLUMBIA HEIGHTS (3/6/06)
  14th and Irving Streets NW need to get prepared for a 550,000 square foot retail mall. Area residents should expect the "DC USA Mall" to be completed around February 2008 by the developing venture of Grid Properties and Gotham Org.

Capitol Hill and H St News Continued 

• 200 H ST Development
  Last year Louis Dreyfus Company purchased the property between 2nd and G to 3rd and H St. The project is to be a mixed use property with approximately 315 condo units, some retail space, possibly some office space as well, and an underground garage with appoximately 380 spaces.
• Gov't Spurring H ST Development
  The community is showing support for some gov't measures to help H Street grow. They are working on banning the sale of single units of alcohol (decrease on those who "use the curb as a bar stool"), they have created a development overlay so H Street developers know what is acceptable, and they are working to increase the tax rate on vacant properties. Raising the tax rates encourages those holdouts who are waiting for higher prices to sell sooner, spurring development more quickly.

The Real Estate Players 

Developers, Financers, Investors and Property Managers to name a few

• The Carlyle Group company website
• The CIM Group company website
• Forest City - Washington company website
• Monument Realty company website
• The Peterson Companies company website

The Players' Moves 

Who's doing what

• Monument Realty "County, Builder Agree on Swap -- Minus $25 Million" by the Washington Post (1/18/07)
• Forest City "A Family Company, Forest City, Sets Out to Transform the District" by the Washington Post (1/1/07)

Maryland Info 

Development by our Neighbors to the North

• Loudon County
• Montgomery County
• Howard County
• Anne Arundel County
• Prince William County
• Prince Georges County
• Calvert County
• Charles County
• St. Mary's County

Archive of My Thoughts 

9/28/06

• Another Market Update:
  Yes, it's true, many houses are sitting a bit longer on the market. I have seen several million dollar plus homes which have sat for a good portion of a full year as well as many lower priced homes sitting for several months even. There are two reasons for this:
  
  1) An Owner has overpriced their home. They probably found comparables in their area and added a healthy percentage for the value they hope that their house would have gained since their neighbors' sales.
  2) The home is not overpriced, but the right buyer must come along and agree with the valuation. The difference between now and say a year ago, is that there were many more ready and able buyers therefore houses sat for a shorter time period.
  
  If you are a seller, don't fret. If you have the time to stay in your house while it's listed, then you are in good shape. You can always trade money for a faster sell (lower price makes more buyers available).
  
  If you are a buyer, take your time. Competition is a bit lower and you have some breathing time to ponder a house and the options available to you.
• All indications are that the fiery pace of real estate yesteryear is over. BUT this does not mean a decline. In fact I think that all economic and development statistics are pointing towards a return to normalcy. The unfortunate part of a return to normal real estate conditions is that news reporters and critics love a story, and the current story is a so called "real estate bubble". What these "bubblelists" do not tell you is how localized a real estate market is, and the foundations of real estate value within DC and the DC metro area are solid. Good job growth, good office space growth, the federal government is not going to leave town any time soon, they are not making more land in DC and the outerlying commuters have reached their limit. This all translates into steady increases in real estate values, steady, but lower than in recent years. Also take into consideration the new areas of development. People are moving into the new baseball stadium district, activity has begun along the H-Street Corridor. Development continues to spread where it can, and with it increased property values. Another fruitful gain for most people is the chance to buy value added homes, where you can go into an area which has just begun to see signs of development and find some homes which are in need of work. By adding value to the homes you can realize larger gains than just the typical market movement. For all those who are not into "sweat-equity" just relax and plan to stay put in your home for a little bit. Real estate values will climb and you can sit comfortably knowing that you got into the market while some of the best interest rates were available.
• For Buyers: Be prepare to shop around. Many sellers are still holding on to inflated notions of house values. No, you are not all of a sudden going to find incredible values in areas which have been booming because there is still an underlying desire for these areas. But you do not need to buy the first house you have the chance to any more.
• For Sellers: Be prepared that you might not sell your house in one day anymore. Not that it doesn't happen, because I recently had a neighbor who had a well shown house which sold in one weekend at the high end of the price range for a house of its size. The old equations are still true, time your sale in the right season, make sure your house shows well, and be ready for anything. You may receive an offer at your first showing, or maybe a month down the road. Remember, every house has a buyer, it just depends on how long it will take you to find a buyer at the price you have set.

Archive of My Thoughts 

7/6/06

• People have asked me my thoughts on the current state of the DC market. Most people are confused because they hear one of two distinct and conflicting accounts; these coming from a variety of sources: news, tv shows, friends and family.
• On the one hand, there have been hundreds of stories of people making lots of money buying real estate. Some people buy, fix, and sell; some people simply flip without any repairs; some buy and hold; and some just got lucky and have owned a place for some time in what is a new hot area.
• On the other hand, there has been an increasing number of naysayers, those who are adamant that the market is "ready for a correction". Many believe we are on the cusp of a dramatic drop in prices. Their claims are based on: 1) the rising interest rates, 2) the increasing amount of supply in the housing market, and 3) the decreasing affordability of current homes.
• Which group is right? Of course, the easy answer is that they both are. It depends on which location in the country you are in. For example: Las Vegas has seen astounding growth in its real estate prices over the last several years, and increasing speculation by investors. But several major projects scheduled for 2006 and thereafter have canceled (despite having presold some units). This is because Las Vegas is bounded by land, and lots of it. There are no constraints to Las Vegas growth, so why would people continue to pay more and more when living outside the city could cost so much less?
• Now, let's break that down into something that is actually helpful to you folks looking into real estate around the Nation's Capitol. DC has solid boundaries. Northern VA and Southern MD have grown. Miserable commutes and new zoning restrictions are cutting down on the westward growth. This leaves us with one answer: the land that already exists in and around the Capitol is worth more and more. In order to support this growing worth, there must be a corresponding increase in commercial activity and job growth. Lucky for us, The Bureau of Labor Statistics and Center for Regional Analysis at George Mason University have completed a study which followed the job growth since 1994 and projected it until 2007. Job growth has been positive since 1999 and is projected to grow an average of 5.75% per year until at least 2007.
• So where does this leave people who own or who are looking for real estate in the DC area? Yes, you should be careful. Buying is not for everyone.
  
  First Time investors can start doing their homework at this link.
  
  Although not everyone is in a position to buy, if you are, now can still be a great time. Sellers are a bit on-edge because of the national news; many are willing to negotiate more. Do your homework. You must know the area you want to live in, the trends of the area (job growth, transportation solutions, commercial and residential development), the prices expected for different kinds of property, and the tradeoffs between living in particular places. By researching well, or even better, having an Buyer's Agent help you research, your house can be more than just a home, it can be a quality investment as well.
• To start your own research, use some of the resources which I have highlighted below. They will start to open doors to valuable information which can help you find a good location in the DC area.