Rent vs. Buy: Capitol Hill

• April 26, 2010
• 7 Comments

by Michele Lerner

Plenty of rent-versus-own calculators are available online to do a purely numbers-driven evaluation of whether you should buy a home or rent one. (The New York Times has a particularly good one.) But, as most buyers in search of a new home know, the decision to buy a home is not purely financial. It requires a long-term commitment to a property and a neighborhood. UrbanTurf will work its way through the neighborhoods of the city to gather estimates of rent and home prices as well as the distinctive characteristics of each community. This week, we visit Capitol Hill.

The Market Lunch at Eastern Market. Photo by Josh Howell

The Neighborhood

Roughly bordered by the Capitol, G Street, 14th Street and the Southeast Freeway, Capitol Hill is an area that has evolved from a zip code favored by federal government employees to a neighborhood that is filled with families, couples and young professionals. Thanks to a re-invigorated bar and restaurant scene along 8th Street SE and the new Eastern Market, Capitol Hill has become one of the more popular areas in the city for both home buyers and renters. Keller Williams’ Jason Holt describes Capitol Hill as a “small-town neighborhood which also offers the sought-after amenities and conveniences associated with an urban setting.”

To Buy…

801 Independence Avenue SE

Housing on Capitol Hill is primarily made up of attached, century-old townhouses that either remain single-family homes or have been split up into condominiums. Homes in need of a full gut-job renovation can start in the $500,000s, but Holt notes that renovated homes are not cheap, and can range from close to $1 million to well over $2 million. Condos are more reasonably priced with one-bedroom units averaging $330,000 and two-bedrooms around $465,000. Here are two properties that will give you an idea of what to expect if you are looking to buy.

There is a six-bedroom home that just recently hit the market at 801 Independence Avenue NE for $1.49 million. The home has over 3,700 square feet of interior space, 33 windows, an enormous kitchen and a two-bedroom English basement that has its certificate of occupancy if the eventual owners are interested in renting it out.

On the other end of the spectrum, there is a two-bedroom condo at 1116 C Street NE a few blocks east of Stanton Park that is on the market for $449,900. The unit has a small patio, a decent-sized master bedroom and a parking space that conveys, which makes it seem like a good starter home for a young congressional staffer.

East Capitol Street. Photo by Joseph A

…Or To Rent?

Rents on Capitol Hill can vary pretty widely. Monthly rates for one-bedroom apartments range from $1,100 to about $2,000. Every once in a while, a two-bedroom apartment can be found for under $1,500, but rates for this size unit can go up as high as $3,300 a month. Finding a three-bedroom rental for anything lower than $2,700 in the neighborhood is fairly difficult.

The Verdict

The rent-versus-own decision is not a simple one on Capitol Hill, since there are such a variety of home types, sizes and styles available. If you are in the market for a fully renovated townhouse, you should expect to pay close to $1 million. If you are not prepared financially for that price point, but still want to live on Capitol Hill, renting is probably the better option. However, if you are searching for a one or two-bedroom condo, the buy argument is much stronger as units in the neighborhood are comparably priced to the rest of the city.

This article originally published at http://dc.urbanturf.com/articles/blog/rent_vs._buy_capitol_hill/2008

7 Comments

1. John said at 9:46 am on Tuesday April 27, 2010:

   Not sure I agree with some of the numbers here.  There is a large variety of 3BR/2+ bath townhouses in the $700-850K range, there is no need to spend $1 million and above unless you are looking for a huge mansion (who needs 6 bedrooms??).  And of course on the edges (G St NE or 13th St) you can get a good-sized townhouse for under $600k.

1. CapHillBuyer said at 10:04 am on Tuesday April 27, 2010:

   @John—Please show me a renovated three-bedroom in legit Cap Hill (not the fringes, H Street or Potomac Avenue) for $700K! $800 to $900K is (unfortunately) the norm these days, which I think is what the article means by close to $1 million.

1. Vivi said at 11:08 am on Tuesday April 27, 2010:

   Hmmm…1426 C ST NE listed for $529k strikes me as a good find in that it has been renovated and has off street parking.

1. w said at 5:35 pm on Tuesday April 27, 2010:

   old pic of EM lunch counter.  that’s the revival tent temporary setup, not Eastern Market

1. Max said at 4:32 pm on Monday May 3, 2010:

   The Hill market is pretty solid as empty-nesters and professional couples come looking.  $1MM+ is not uncommon and may only get you 3 bedroom and 2 bathrooms.

1. Caroline said at 2:00 pm on Wednesday August 11, 2010:

   I agree that these prices are off. My partner and I have been searching for Victorians on the Hill (nothing east of 15th St. or north of H St.) and have found plenty that were recently renovated and are selling for $600-800k. It’s also worth noting that many houses on the Hill have basements units that can be rented out to recoup some of the mortgage costs.

   As for rentals, I’ve searched for those on the Hill as well, and I’ve recently seen several 3-bedrooms (often entire houses) renting for $2700 or less. Typically the bedrooms in these houses are not going to be equivalently-sized, but the arrangement works for some.

1. Caroline said at 2:03 pm on Wednesday August 11, 2010:

   Just noticed that this was posted in April of 2010—I will agree that home prices were inflated during this month because first-time homebuyers were scrambling to claim the tax credit, and because the snow was melting and the summer frenzy was starting to pick up.

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