DC Buyer: The Eager First-Timer Looking for Peace and Quiet

• June 24, 2010
• 15 Comments

by Martin Smith

DC Buyer is a series on UrbanTurf where we look at buyers from various demographics and provide available housing options for them in the current DC market. If you are a prospective buyer and would like to be featured in DC Buyer, send an email to .(JavaScript must be enabled to view this email address). See all of our past DC Buyer articles here.

This week, we are working with Perry, 33, a first-time buyer who has been saving for a home for several years. Perry works as an executive assistant downtown, and earns about $50,000 per year. He paid off the last of his consumer debt a couple years ago, and has put together a down payment of about $65,000. Since his income won’t leave a lot of extra cash with even the most affordable DC condos, he wants to steer clear of any kind of “handyman special” and go with something in turn-key condition.

1365 Kennedy Street NW

Perry spends all day downtown, and wants to come home to a more relaxed neighborhood at night, He’s been living with a friend in Adams Morgan to save up some cash, but he hates the constant noise from the bars across the street. Given his income and savings, Perry is going to be shopping in the $200,000 to $235,000 range. He is very aware that in this very entry-level price point, there will be some big tradeoffs.

The first option we’ve found for Perry is 1365 Kennedy Street NW, Unit 404. This one-bedroom, one-bath co-op is in solid shape, although it’s not the most modern look in the kitchen and bathroom. It is located in 16th Street Heights, known more for large single-family homes than condos, but also a quiet neighborhood, which is what Perry desires. While the lack of a Metro stop nearby is a downside, the 16th Street bus lines go right to Perry’s office. Plus, Rock Creek Park is just steps away. At $210,000 with a monthly fee of $318, this unit is right in the middle of his price range.

303 Seaton Place NE

The second choice is 303 Seaton Place NE, Unit 3. This condo is actually a two-bedroom, two-bath, which is a lot more space than Perry had expected to find considering the price range. The pet-friendly unit is newly renovated, features a granite/stainless kitchen with dishwasher, an in-unit washer dryer, and off-street parking. In addition, this property is within walking distance of the Metro. The downside is that the neighborhood is still developing, so it may not provide as much peace and quiet as Perry wants. Still, since this unit offers the most space for the lowest price, it is worth considering. 303 Seaton Place is on the market for $199,900, and has a monthly fee of $207.

4200 Cathedral Avenue NW

The third property we found for Perry is 4200 Cathedral Avenue NW, Unit 903. This high-rise option is certainly the highest quality renovation on the list. This unit features a gourmet kitchen, new windows, new A/C, and beautiful wood floors. The Wesley Heights/AU location is also the definition of peace and quiet. The downside here is the monthly fee. While it does include electricity and gas, it is high ($654 per month). But keep in mind that includes amenities like a 24-hour front desk and a roof deck. The asking price is $229,000.

Given these three choices, where should Perry put in his offer?

This article originally published at http://dc.urbanturf.com/articles/blog/dc_buyer_the_eager_first-timer_looking_for_peace_and_quiet/2201

15 Comments

1. Seikaly said at 1:50 pm on Thursday June 24, 2010:

   The Kennedy Street unit. Looks a little dated inside, but it is in a VERY quiet neighborhood and the price is low.

1. formerledroitresident said at 4:32 pm on Thursday June 24, 2010:

   Seaton NE is still very marginal with very few services/amenities.  My vote is 4200 Cathedral.  Great renovation and fee is not that bad when you consider that the utilities are included.

1. Juanita de Talmas said at 4:35 pm on Thursday June 24, 2010:

   Who wants to buy a depreciating asset?  He should continue to rent until about 2016.  Then he’ll find some incredible bargins.

1. swester said at 7:05 pm on Thursday June 24, 2010:

   I don’t know Juanita, but 6 years of rent at about $1000/mo. (if you’re lucky) isn’t cheap, either.

   The D.C. area isn’t exactly due for a major crash, considering all of our jobs are going to be for the government within a few years as the private sector continues to disintegrate.

1. Dupont said at 7:30 pm on Thursday June 24, 2010:

   The Kennedy or Cathedral unit. Both have different pros, and the only con on the Cathedral unit is the condo fee, but that is the case with all condos in Wesley Heights.

   If you wait until 2016 to buy, I feel sorry for you. DC hasn’t been affected like the rest of the country by the housing crisis and interest rates are insanely low right now.

1. Monster Trucks said at 9:31 pm on Thursday June 24, 2010:

   The truth of the matter is that DC HAS been affected by the housing crisis, unemployment in DC is at 9.8%.  The case-shiller index for DC has posted monthly declines since October 2009, and this is with the 8k bribe in place!  Waiting until 2016 might be overkill, but there is no rush to buy in a declining market like Juanita said, especially since this buyer is putting 20% down.

1. Dupont said at 9:45 pm on Thursday June 24, 2010:

   @ Monster Trucks—DC has NOT posted monthly declines in Case Shiller since October 2009.In fact, in most months, prices and values have increased since that time. It is this type of misinformation that jades DC buyers. Do your homework before posting.

1. Monster Trucks said at 10:38 pm on Thursday June 24, 2010:

   DC most certainly has been posting monthly declines, here are the numbers going back to October.

   March 2010   175.28   -0.69% 

   February 2010   176.49   -0.52% 

   January 2010   177.41   -0.78% 

   December 2009   178.81   -0.21% 

   November 2009   179.19   -0.50% 

   October 2009   180.09   -0.34%

1. SP said at 9:15 am on Friday June 25, 2010:

   AU neighborhood. Quiet, lots of trees, but still has some restaurants and shops nearby. I find those tall buildings a little bit depressing but once you are inside the unit I think it would be fine!

1. Janson said at 3:42 pm on Friday June 25, 2010:

   Not to pile on, but Monster Trucks is absolutely right. Not seasonally adjusted Case-Shiller housing prices in DC as of the May report (which has a three month lag) have actually been declining every month since SEPTEMBER of 2009 at which point the index was at 180.71. I wouldn’t be surprised to see a brief increase for April because of the tax incentive (that report isn’t out yet), but that should not be taken as a change in the trend.

   With the other potential benefits of homeownership and with current prices, it can still make great sense to buy if you plan to live in the place a while, but make sure when you run your spreadsheet you don’t put in a property appreciation number for a while.

1. cbmendez said at 4:01 pm on Friday June 25, 2010:

   I LOVE, LOVE, LOVE this feature. One comment from Juanita… and Perry is a long forgotten memory for the discussion participants.

   Perry, if you are a pioneer, go for Seaton. Eckington/Trinidad saw the tail end of the city’s renewal. Easy access to RI and NY Ave stations. When you feel like a little noise, H St is an easy destination.

   If you are not a pioneer, go for Cathedral. Kennedy is in my neighborhood, which I love. But if you are not willing to ‘be the change you want to see’ in your future neighborhood, then there is no point in choosing Kennedy or Seaton.

   Juanita, Perry and everyone else. Unless you are an actual short-term investor / flipper, why is a ‘depreciating asset’ the first consideration? If you are buying your HOME, or using a buy & hold investment strategy, it seems there are greater considerations than what the economy in DC or elsewhere is doing TODAY. It seems to me, one of the reasons for our economic downturn, is that many of us ignored some age-old advice ‘buy low, sell high’ or ‘don’t put all your eggs in one basket’ or ‘don’t count your chicks before they hatch’. Future wealth will grow from smart investments during a down market. Given all of that, why not buy now? Why would you wait until 2014, or 2016 or 2020 when the economy is very likely to be on the upswing and prices for real estate and on Wall St. are 30% higher than they are today?

   I am no expert; I am sure several of you out there are indeed experts and are calling me all kinds of Village Idiot names. Nevertheless, I am optimistic about our collective financial future and I am making financial decisions based on that optimism.

1. Diane said at 7:29 pm on Friday June 25, 2010:

   I think it would be worth Perry’s while to check out the Bearings on South Washington Street in Old Town, Alexandria for comparison.  There are several units there on the market in his price range. There are two 1-bedrooms listed for $235,000 (http://franklymls.com/AX7304552 and http://franklymls.com/AX7270612) as well as studios for less.  The units were remodeled before going condo in ~2008. 

   He won’t get more space in Old Town, but the pace is slower and there is still great access to urban amenities - waterfront, parks, shopping, dining.  I work downtown too, and the commute is longer, but I find the physical separation helpful to unwind. 

   From the Bearings he could get frequent buses to Metro or catch the 11Y straight downtown in the peak commute period.

1. Vicente Fox said at 12:16 pm on Monday June 28, 2010:

   Why would you wait until 2014, or 2016 or 2020 when…real estate…[is] 30% higher than they are today?

   That’s just the point.  Real Estate WON’T be 30% then.  It could well be 30% lower.

1. cbmendez said at 4:51 pm on Monday June 28, 2010:

   Where does all of the negative thinking come from? If you really believe the economy will be weaker 4, 6 or 10 years from today, then why purchase or invest in anything at all? You would be better off moving into the cheapest apt you can find, paying off all of your debt and sitting on a pile of cash (by the way, this is NOT a bad idea).

   Warren Buffet said buy when others are cautious and be cautions when others are buying.

   Fortunes are made in a down market. The condo that was selling for $250k in 2006 can now be had for $215 or less.

   Now is the time - the DC market is not as down as a lot of other markets in the country. We’ve learned our lesson, we won’t use interest only loans to buy homes we plan to live in. We will correct our credit mistakes. We will not join the stampede, simply because there is a stampede. We will read and understand our mortgage contracts and not sign, if the terms make us uncomfortable. We will make offers that are below our approval amount. We will have the patience to wait out the bank’s decision on a shortsale.

   All of it is possible - if you believe.

   So, click your heels three time and belive that you can get home.

1. JoJo said at 10:40 am on Tuesday June 29, 2010:

   Home prices are still way too high for most Americans in the current economic environment.  Based on current wage levels, house prices should actually be much lower.  So the market is going to continue to try to push home prices down to a point where people can actually afford to buy them.  Right now Americans can’t even afford the houses that they already have.  The Mortgage Bankers Association recently announced that more than 10% of all U.S. homeowners with a mortgage had missed at least one mortgage payment during the January to March time period.  That was a new all-time record and represented an increase from 9.1 percent a year ago.

Join the discussion