The greatest fear that hits most home buyers is the loss in value of their home so quickly after purchasing it. It makes them feel as if they didn’t bet the best deal possible, and many times can reflect poorly on the performance of the Realtor, even though these are issues beyond their control. Especially after reviewing some of the price trends in Metro DC, it can be a hard sell to motivate a buyer when they consider the real possibility that they may end up “paying too much.”
There is still hope. Some areas have not had any decline, rather, have seen an increase in home prices recently. What are commonly referred to as “up and coming” neighborhoods are doing just that- realizing capital gains for home owners now selling their property in those areas. Three zip codes, according to MRIS statistics, have shown an increase in home values in DC: 20008, 20009, 20010 (20007 also showed an increase, but modestly at 3%, and for an average of over $1,000,000 per home is not for the average homebuyer). Those areas include Van Ness, Dupont, Columbia Heights, and Kalorama- along with some sections of Glover Park and Cleveland Park.
This is significant because many of the properties available in these neighborhoods include many condos (which have been hit the hardest in these times) and many rehab properties. New homes buyers and investors can start to explore areas that are currently undergoing gentrification, which will potentially continue this upward swing. Realtors and home buyers SHOULD take advantage of rehab loan programs currently available, and conduct rigorous due diligence in the process of buying that “fixer-upper” property.
There are other neighborhoods to watch along the Blue Line. Eastern Market, Naval Yard, and the old location of DC General are all going to change or have already begun to change. Thanks to the Nats Stadium, the worn down waterfront is experiencing a renaissance of new construction while home values continue to be depressed by the bad housing market. DC General is going to be redeveloped soon, and its proximity to the Potomac Ave Metro doesn’t hurt either. Eastern Market and the area around Capitol Hill is continuing to improve thanks to many policy decisions by DC Government.
Let’s not forget Green Line neighborhoods. Logan Circle and areas close to the Shaw Metro, along with the aforementioned Columbia Heights, are all important places to watch. I have a client who keeps calling me to ask if the prices in Petworth and Brightwood have fallen significantly enough to buy a single family detached home (which are very hard to come by in the District, especially near a Metro). Even though the trend is currently down in most of these places, encourage buyers to look to the future here.
Buyers can easily track where home values are going. Simply pick a home you find on Multiple Listings Search, enter the address, and you can get a map and statistics for any neighborhood at you fingertips. I have a search feature like this on my website.
Keep an eye on other neighborhoods rebounding. 20016 has lost significant value, but I believe this to be partly to blame for the many condos with skyrocketing condo fees. American University Park/Tenleytown has, in my opinion, some of the best values for homes per square foot. Despite their age (built between 1930-1945), the detached homes in this neighborhood (as well as neighboring Spring Valley) have lasting appeal with hardwood floors, garages, basements, solid brick exterior, and colonial styling. Some of these homes will require some modern improvements (such as Master Baths, larger kitchens, and main floor powder room/half bath), however, the value hunter will see the benefits of renovations to these homes. Investors should also look closely at this neighborhood with the vast number of potential renters that range from foreign dignitaries to American U. students.
Keep Watching and Keep Looking! Great Homes are on the market NOW that may not be there tomorrow.
Justin Walls is a Realtor with Avery Hess Realtors, and operates out of their Rockville Office. He can be reached at firstname.lastname@example.org for comments and questions.