Housing Complex

Fast Tracts: To Get the 2010 Homebuyer Credit in D.C., You May Want To Move Quickly

Want the 2010 homebuyer credit? If you’re looking here, you might want to get started ASAP.

Want the 2010 homebuyer credit? If you’re looking here, you might want to get started ASAP.

The winter usually represents a sleepy period for real estate sales. Who wants to trek out in the ice to a Sunday open house? Who can think of homebuying when they have to get Aunt Claire’s Christmas present? But this year may be different. Back in November, Congress renewed the first-time homebuyer tax credit, extending it to 2010 with more generous rules that make it available even to current homeowners. Buyers who want to take advantage of the credit, which offers up to $8,000, need to be under contract by April 30. Conventional wisdom is that this is a buyer’s market. Sure, prices have fallen. Sure, purchasers are no longer snapping up condos after a few glances at architectural plans or waiving home inspections in an effort to bolster their bids. But real estate agents are reporting multiple offers on well-priced properties in certain areas. And some say that the recession ended in D.C. in early 2009—when the metropolitan area started adding new jobs and the unemployment rate began dropping, according to a recent Delta Associates report—and that real estate has already turned the corner. While that’s certainly not true everywhere, there are some neighborhoods where things are moving surprisingly fast.

Where? Housing Complex analyzed sales in the District by ZIP code for October 2009, the month before the last tax credit expired. Here are the areas where homes sold the fastest, and where, if you’re in the market now, you’ll need to get shopping—fast.

1. South Dupont and Farragut North

20036ZIP CODE: 20036

Move to 20036 and you’ll become acquainted with neighbors Peter G. Peterson, Johns Hopkins, and Carnegie. They’re pretty active during the day—but they won’t throw all-night ragers. That’s because they’re the policy schools and institutes that populate Massachusetts Avenue, one of 20036’s main drags. This ZIP also includes the Farragut North area, a huge stretch of Connecticut Avenue downtown, and Dupont Circle—the actual, physical traffic loop (not most of the neighborhood above it). So the tale behind this ZIP’s speedy sales is simple: It’s not that residential. There are hints here of the boom of yore: Stanton Schnepp, a real estate agent with Coldwell Banker Dupont, listed a one-bedroom condo at 17th and Q Streets for $399,000 in October. His client had an offer within seven hours. “That’s just an example of a well-priced property,” he says. Schnepp was so shocked at the speedy return that he and the seller decided to wait a week to see if they could do better. Alas, no more bids. But the seller was satisfied, and the deal was done in 30 days. In the last two years during the fall, roughly five to a dozen homes a month have sold in 20036—basically all condos or co-ops. As of November 2009, there were 28 listings in the area, 23 in this category. The median price range has been in the $300,000s. You’re paying mostly for that tried-and-true real estate-ism: location, location, location.

2. Southeast Capitol Hill

ZIP CODE: 20003

There are two real estate stories in this ZIP, which covers the largely residential southeastern half of Capitol Hill. The first takes place closer to the C-SPAN-oriented end, near Eastern Market, and the charming shopping strips of Barracks Row and Pennsylvania Avenue. Real estate agents have long trumpeted properties here as “stately,” “grand,” “luminous”—with price tags to match. But the second story centers around 20003’s emerging neighborhoods, which have also boosted sales. The almost entirely new Capitol Riverfront area, by Nationals Park, may be less than a third finished (the Riverfront’s Business Improvement District reports 10.2 million existing or completed square feet of construction, and another 35.2 million to be finished over the next 15 to 20 years). But the Velocity Capitol Riverfront, a rare new D.C. condo building in 2009, started welcoming new owners in October. The initial first-time homebuyer tax credit, which expired in late November, surely helped move properties toward the back end of the Hill near the gentrifying zones around the Stadium-Armory and by the Potomac Avenue Metro. A new Harris Teeter opened there in 2008. Emil Jones, a real estate agent with Long & Foster Capitol Hill, says he noticed home prices dropping considerably in the Capitol Hill area in the spring. “During that time period homes were priced right, and people were buying,” he says. The typical client in ZIP 20003 wanted a single family home around $450,000. “Most properties that were purchased—they wanted something that they didn’t have to do anything to,” he says. He helped close on a few properties in the 1300 block of K Street SE, behind the new Harris Teeter, and down by New Jersey Avenue near the stadium. Just across the 20003/20002 ZIP divide in Northeast Capitol Hill, Jones found a brand new two-bedroom condo for $200,000—with parking—for a couple with a particularly tough combo of high expectations/low budget. “I took them from one end of this hill to another,” says Jones. He met the couple in July; by October, they had gone to settlement.

3. Woodley Park, Cleveland Park, and Van Ness

ZIP CODE: 20008
AVERAGE PRICE: $1,014,828

Some D.C. neighborhoods are unwaveringly popular. 20008 is in that group—along with northern neighbor 20015, Chevy Chase, and western neighbor 20016, which includes American University Park. But 20008 is more energetic and connected to the rest of D.C.—a tad younger, though not necessarily edgier, mind you. (Comparing the city grit in Tenleytown and Cleveland Park is a bit like examining tiny scuff marks on expensive designer shoes.) But while all three of these Northwest ZIP codes had strong sales this fall, 20008 may have held a slight edge due to the fact that a large stretch of Connecticut Avenue—with all its nice condo and co-op buildings, conveniently located near Metro stations—sits inside its borders. Many single-family homes in Upper Northwest are far outside the reach of first-time homebuyers. If the price doesn’t scare you off, though, you’ll still have plenty of competition here.

Penn Quarter (Tie with 20008)

ZIP CODE: 20004

Much like the area south of Dupont Circle, Penn Quarter is a neighborhood where residential real estate is scarce. Take Pennsylvania Avenue itself, D.C.’s most iconic boulevard. At the time of last year’s inauguration, fewer than 200 homeowners (in just two buildings) could actually boast views of the president and first lady’s stroll toward the White House. With so few homes available, the buy-sell stats tend to change a lot during any given month; you never know what you’re going to get in 20004. October 2009 was a successful month: Nine properties sold, up from seven in September, and three during the same period in 2008. But November 2009 was a bummer: Just two properties, out of 18 active, sold. Jo-Ann Neuhaus, executive director of the Pennsylvania Quarter Neighborhood Association, can think of just 10 condo buildings off the top of her head, and she wonders if there’s room for any more. The last new one to open was the Artisan on E Street—in 2007. There are other new projects on the horizon nearby: When downtown’s old convention center site is finally rebuilt, hundreds of new housing units will come on the market. But that’s the 20001 ZIP. “I don’t think there’s much left to do in 20004,” says Neuhaus. “It’s all been built up.”

4. Chevy Chase

ZIP CODE: 20015

Having watched the Chevy Chase real estate market for 27 years, Holly Worthington knows its weaknesses. Luckily, there aren’t many. The “market is pretty well insulated from the economy because most of the people that live there have money,” says Worthington, manager of Long & Foster’s Chevy Chase office. “These people have government jobs and jobs as attorneys,” she says. In other words, jobs with a fair amount of security. “One of the other things is the job loss in our job market has mostly been in lower income jobs, and the job growth has been upper-bracket jobs.” Ca-ching for Chevy Chase! These buyers couldn’t even think about taking advantage of the 2009 credit: They earn too much money to qualify. Nevertheless, buyers this year had trouble receiving financing for loans on houses priced over $1 million. In the last few months, says Worthington, banks have loosened their restrictions, no longer asking buyers to put 30 percent down and have 40 percent of the home’s purchase price in savings. During most of 2009, she says, basic homes under $1 million “continued to move well.”

5. Dupont, Logan Circle, and Columbia Heights

ZIP CODE: 20009

If there’s any ZIP code in D.C. most likely to reap the benefits of the first-time homebuyer tax credit, it’s 20009. The inventory is diverse and plentiful. In October, this ZIP had more sales, 67, than almost any other in the city. Of those, 59 were condos and co-ops. Even through the recession, gentrification continued on U and 14th Streets. While new condo buildings were rare (many projects slated for condos became apartments as the economy crumbled), DC USA opened up (across the 20010 ZIP border) with Target, Best Buy, and Bed Bath & Beyond. Business owners are so confident in the neighborhood’s growth that they’re planting new businesses practically right next door to their old ones. In 2009, Andy Shallal opened a colossal new restaurant, “Eatonville,” one block north of his popular Busboys & Poets on 14th. A few blocks south, Cork Wine Bar recently opened Cork Market & Tasting Room 400 feet away. Needless to say: plenty of attractions for new homebuyers.

All sales figures were taken from the Multiple Regional Information Systems, Inc.