DC Area High-End Housing Market Makes a Comeback

by Andrew Siddons

image
This five-bedroom in Georgetown sold for $4.75 million in November.

In November, a row house at 1731 Riggs Place NW sold for its asking price of $1.699 million. On its face, this was not a particularly noteworthy sale, as homes in Dupont Circle rarely sell for less than $1 million. But the fact that the property sold in an all-cash deal and received multiple offers turned some real-estate minded heads in the neighborhood.

“We looked all over for comparables, and we priced it at the very top,” listing agent Dwight Mortensen of Coldwell Banker said.

While the all-cash sale of a one million-dollar home does not by itself mark the return of the area’s high-end housing market, it is one of many signs that the luxury home buyer who was scared to hop off the fence 18 months ago is now back in the market.

“Generally, the $1 million+ market has been doing well,” Keith Gibbons, the founder of DC Home and Condo Prices, told UrbanTurf. “Monthly sales in 2010 for this high-end bracket averaged 44.58 units, about 34 percent higher than 2009.” Michael Rankin of Tutt, Taylor Rankin at Sotheby’s International Realty echoed Gibbons, saying that at his firm, sales for properties above $1.5 million increased 30 percent between 2009 and 2010.

However, the increase in high-end sales was not just a year-over-year trend.

Housing data from Real Estate Business Intelligence shows that toward the end of 2010 in the 20007 zip code, which includes tonier neighborhoods like Georgetown and Foxhall, ten homes priced between $2.5 and $5 million sold. While this may not seem like a rush of sales, that two-month figure matched the total number of homes sold in that price point during the previous six months from May to October. In 20008, which includes Kalorama and parts of Cleveland Park, 11 properties priced between $1 million and $2.5 million sold in October, and in November, six more properties were sold in that range, plus three more priced between $2.5 million and $5 million. To put that in perspective, no properties in the latter price range sold in August, September or October. Sales surged even more in December as 11 properties sold for between $1 and $2.5 million, making the fourth-quarter total 75 percent stronger than the same period in 2009.

image
1731 Riggs Place NW

The sales surge is not limited to single-family homes within DC proper either. Turnberry Tower, perhaps the highest-end new condo project in northern Virginia, has been averaging about 10 contracts a month since sales restarted last April. So far in January, the project has ten units under contract, four of them with list prices north of $2 million.

Turnberry’s Dan Riordan estimates that 60 to 70 percent of the buyers are condo owners who live within the Beltway and were able to sell their home in a market that is loosening up.

“A year ago, people were pretty shell-shocked and those who wanted to sell their homes couldn’t,” Riordan said. “Now that the DC area market is firming up, those owners are able to sell and trade up.”

Kevin McDuffie of Coldwell Banker’s Dupont Circle office seconded the trading-up theory saying that the sales of average-priced houses creates a new buyer looking towards higher-priced properties.

“If activity is starting in the lower price ranges, it creates a domino effect in the higher ranges,” McDuffie said. “If someone sells a $750 or $850,000 condo, then they will likely move up to the next price point.”

While a number of factors are at play in making sales volume in the higher-end market increase, the inventory of available homes for sale is now decreasing. McDuffie said that in December, there were 41 percent fewer condo listings priced above $1.5 million in the 20009 zip code than at the same time in 2009. In Chevy Chase, W.C. & A.N Miller’s Claudia Donovan said that there are about 70 homes on the market priced between $1.5 and $3 million, which represents slim pickings for buyers.

image
Living room in unit at Turnberry Tower

Still, for those willing to spend a lot of money on a home, there are options. Jim Bell of Washington Fine Properties has a listing on R Street in Dupont Circle that is now on the market for $15.5 million, and it appears that there are buyers out there looking in this nose-bleed range. In December, an eight-bedroom home at 3210 R Street NW in Georgetown sold for just over $11 million, making it the biggest sale of the year in the ritzy DC neighborhood.

“I have no clue [why this is happening] other than guessing that money’s almost free for those who finance, and there’s no sense keeping money in a CD since interest rates are near zero percent,” Gibbons said. “And, of course, everyone wants to be in DC!”

This article originally published at http://dc.urbanturf.com/articles/blog/dc_area_high-end_housing_market_makes_a_comeback/2908

9 Comments

  1. DCA said at 11:46 am on Friday January 28, 2011:

    True indeed. 12 months ago, my clients were terrified of putting an offer in, but the last 4-5 months have been a different story. Now all we need are people to put their homes on the market.

  1. jag said at 1:53 pm on Friday January 28, 2011:

    Odd story since the most recent home pricing numbers are confirming what most suspected: the housing double dip has started. I imagine this “comeback” story will give way to people once again sidelining themselves waiting for the new bottom later in the year.

  1. jtackle said at 2:53 pm on Friday January 28, 2011:

    I waited until November to buy a home in Woodley Park after looking for about 9 months. I think the price and a feeling that the worst is over with the crisis were key in my decision. Not all that surprised by the stats above. My fingers remain crossed though.

  1. jj said at 4:01 pm on Friday January 28, 2011:

    jag, I don’t think there’s much of double dip in the luxury market.  The extension of the Bush Tax Cuts means DC luxury houses are going to be in demand come Spring.

  1. jag said at 4:33 pm on Friday January 28, 2011:

    Guess we’ll see. Inventory is so low that it’s entirely possible that you’re right.

  1. Jason Trotman said at 1:39 am on Saturday January 29, 2011:

    I think you are absolutely right!  There is definitely an increase in activity among home buyers in sought-after markets such as Georgetown, Dupont Circle, and Logan Circle.

  1. DCResident said at 11:34 am on Saturday January 29, 2011:

    DC is unlike any other area in the nation.  2010 dollar sales in Georgetown, Kalorama & Logan are up from 2009.  Dupont is slightly down over the same time period and the price per square foot is actually more expensive in Logan than Dupont.  DC ranks in the top five real estate markets for the fourth year in a row.  Buyers and Sellers must really be education on their neighborhood, and type of residence they are trying to buy or sell.  The inventory is so low that the homes placed on the market are selling.  We are very lucky to be living in our city.  If you think the market has crashed, try buying a beautiful home and see what is available or how many other offers you have to battle.  Run the numbers for the average sales price of homes sold in Jan. 2010 and Jan 2011 and the average sales price is dramatically different.  Hopefully, if history is a good marker, when the upper homes sell, it funnels down, not the reverse.

  1. BuySellDC said at 2:04 pm on Sunday January 30, 2011:

    No double dipping here. Market prices have been crawling up for the past six months or so in DC. We recently sold a row house at 2018 R for 1.8M. Nice properties are getting multiple offers and go under contract rather quickly (under two weeks). Washington D.C. is ranked number two both nationally and globally for foreign investment right after New York.

  1. Nikki Smith said at 7:07 pm on Tuesday February 1, 2011:

    I second BuySellDC.

Join the discussion

UrbanTurf now requires registration in order to post comments. Register here, or login below if you are already registered.

Click here if you forgot your password.




 

Courtney Abrams

TTR Sotheby's Int'l Realty

202-253-0109

Serving:

Glover Park

Chevy Chase

14th Street Corridor

NEW!

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We’ve collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Ballston
Looking to Give People A Reason to Stay Past 6pm
Clarendon
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Rosslyn
Hitting Its Growth Spurt
Shirlington
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
Huntington
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
Parkfairfax
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »

Maryland

Profiles of 14 neighborhoods in suburban Maryland

Annapolis
Small-Town Living in the State Capital
Bethesda
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
Potomac
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
Wheaton
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Hyattsville
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Bloomingdale
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
Brightwood
DC’s Northern Neighborhood on the Cusp
Burleith
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
Crestwood
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Fort Totten
Five Years Could Make a Big Difference
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
Georgetown
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
Kalorama
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
Palisades
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Petworth
Getting a Vibrancy of Its Own
Shaw
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Takoma
Not To Be Confused With Takoma Park
Tenleytown
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

Brookland
New Development Could Shake Up Pastoral Peace
Deanwood
A Little Bit of Country Just Inside the District’s Borders
Eckington
Not to Be Confused With Bloomingdale
H Street
A Place To Party, and To Settle Down
Langdon
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
NoMa
Evolving from a Brand to a Neighborhood
Rosedale
Ripe for Investment Right About Now
Trinidad
The Difference 5 Years Makes
Woodridge
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 'hoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Hillcrest
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »

Upcoming Seminars ▾