A look back at 3+ bedroom condos and co-ops...

Charming unit in Tilden Gardens

I sold a charming 4 bedroom/3 bathroom  cooperative in North Cleveland Park last month, and after receiving nearly 20 offers on the place, I thought I'd take a look back at this market. The demand for 3+ bedroom condos and co-ops in DC appears to be strong, so let's take a look at the numbers since 2012.  The search criteria was pretty simple:

• 3+ Bedrooms
• 2+ Bathrooms
• Sold Price $650k - $1.25 million
• Condo or Cooperative (read this post if you've ever heard horror stories about co-ops)
• Located in Northwest DC

Median Number of Days on the Market

Through June 1, 2015

The numbers speak for themselves when it comes to how long these condos and co-ops are on the market. Just a few years ago, seller's expected to give it a month or two before their places sold, and buyers had more time to make their decisions. But times have changed, and now units aren't lasting more than a month on the market...which makes it a relatively strong sellers' market.    

Median List Price vs Median Sold Price

*Through June 1, 2015

Average List Price vs Average Sold Price

*Through June 1, 2015

Looking at the average and median list vs sold charts above, you'll notice that they both follow the same pattern.  Units were selling for less than asking price in 2012 -14, but moving in to 2015, sellers are getting more than their asking price, and buyers are operating in a competitive market.  

What does all of this mean?

Buyers: If you're interested in making a 3+ bedroom condo or co-op your new home or investment, all signs are leaning towards a sellers' market. Doing your homework before you begin your home search is critical, as you'll want to have everything lined-up when it's time to put in that offer. Work with an agent who understands the market and works efficiently, as this will save you time, money and stress.

Sellers: You've been living in your place for years now, and recently started thinking it's time for a change of scenery.  Well, now is the time to consider selling, as demand for 3+ bedrooms condos and co-ops is increasing, while supply is relatively low.  This makes your place an attractive unit for the marketplace. However, be sure to work with an agent who understands the condo/co-op market, and also has the resources to properly list your home so you receive top dollar. 

Co-op? Not as scary as you might think...

So I came across this article  about the Top Dozen Reasons for Co-op Board Rejections in New York City.  Anything from bad credit and poor financials, to unacceptable lifestyles and a poor interview with the board, could cause an application to be denied. But don't worry...this isn't NYC.

A Moment of Clarity

Many of the horror stories you've heard about the co-op board approval process in NYC are quite astonishing, but fortunately, would be totally illegal in DC. Co-op boards in the District of Columbia are bound by Federal Fair Housing law, as well as DC law that protects additional classes of people. In fact, District co-op boards are pretty much limited to choosing potential owners based on:

• Financial Resources
• Criminal Background
• Non-compliance with the Rules of the Association

Key Takeaway

A cooperative can be a great condo-alternative if you're looking for a place to call "home".  Because co-ops typically restrict owners from renting their unit to a tenant, you'd have to sell the place when/if you're ready to buy your next crib. Buyers are usually required to use specific lenders for financing, but many co-ops have several lenders to choose from. With lower property taxes, owner-occupants only,  and lower closing costs, co-ops make a lot of sense for many folks. Be sure to work with an agent who understands the pros/cons of condos and co-ops. For detailed information, read: Condos vs. Co-ops: What is the difference?

Buy vs Rent? The New 5-Year Rule

A new study reported that it's 32% cheaper to buy in DC compared to renting.  The reason why? Historically low interest rates and relatively reasonable homeowner association fees. However, don't go rushing to buy a home just yet. It only makes sense if you're going to keep the place for 5+ years. The study was based on a 30-year fixed mortgage with a 20% down payment, but there are many lenders who can work with lower down payments.  

Buy vs Rent - What It Cost Over the Years

32% cheaper to Buy vs Rent

Key Takeaway  
If you're currently renting your place, and know you're going to be living here for a while, you may want to consider buying. However, no matter where you're at in the process (and even if you've never considered purchasing a home), you should contact a good agent who will guide you through the entire process, not just when you're ready to go house hunting. 
 

A look back at Mount Pleasant...

After listing a Victorian row home in Mount Pleasant, which received multiple offers, I thought it'd be interesting to take a look at the Mount Pleasant neighborhood and its evolution over the years. I ran a Competitive Market Analysis (CMA), dating back to 2012, examining one of Northwest DC's most sought-after communities.  The criteria used was pretty simple:

• Row home;
• 2-4 bedroom; 
• 2+ baths; and
• Mount Pleasant neighborhood

Median Number of Days on the Market

As you can see, homes in Mount Pleasant are a hot commodity, moving quickly, with properties exiting the market within a week or less! In a market this fast, it's important to work with an agent that understands the urgency and competitiveness of each scenario. 

*2015 to-date

Low Sale Price vs High Sale Price

The cost of entry into Mount Pleasant has steadily increased from approximately $500,000 in 2012 to about $650,00 in 2014. Data for 2015 is only through May 31st, but we're likely to see an increase in most of the statistics, as the buying season (Spring/Summer) is heating up. On the upper end of the price scale, we're seeing a bit of an uptick for High Sale Price, with a high of $1.255 million in 2014. 

Median List Price vs Median Sold Price

Sellers in 2013 received about 107% of list price, but since then, the numbers are hovering closer to 100% of list price.  Does this mean the market is getting less competitive or are sellers now pricing homes at market rate? There could be an argument for each, but in reality it is likely a bit of both (as well as numerous other factors that I'll omit for your sake).  Nonetheless, it'll be interesting to see how things turn out in 2015...

*January 1, 2015 to June 3, 2015

What does all of this mean?

Buyers: If you're interested in making Mt. Pleasant your new neighborhood, expect to be operating in a competitive real estate market and be sure to secure a steadfast agent. When competing with multiple buyers for a home, just remember, the seller is looking at the terms of your offer, so you'll want to make it as attractive as possible. However, you should always conduct a home inspection with a quality home inspector. And before you go house-hunting with an agent, be well-aware of the terms of the agent's compensation, as this could decide whether you actually get to see your next dream home.

Sellers: If you're looking for change in scenery or need a few more bedrooms, now is the time to consider selling. A balanced market has 4 months of inventory, and a buyers' market has 6+ months of inventory. Right now, DC has between 1.5-2 months inventory...so it's a very, very strong sellers' market. Be sure to work with an agent who will market your home properly, and don't be fooled by real estate commission gimmicks.  

OPEN HOUSE THIS WEEKEND!

2311 Connecticut Avenue, NW #602

Open Saturday (5/30) and Sunday (5/31) from 1-3 pm

Priced at $850,000

Spacious, sunny, updated condo WITH PARKING in premier building. Updated granite kitchen & ceramic baths, 3 exposures, 9'4" ceilings, redone heartpine floors, crown moldings & through-wall A/C. Roof deck, front desk, extra storage & bike storage. Fee includes ALL utilities & cable TV! Pets OK (Dogs too) Walk to Metro, shops, restaurants & more!

For more information or to see this unit, contact Jason C. Lallis, Esq.