27 April 2006

You Already Knew This...

Housing prices in "transitional" neighborhoods have increased considerably in the past few years. Today's WaPo looks at some changes from 2004 to 2005:

When Connie Maffin bought her Victorian townhouse near Logan Circle 32 years ago, she had no inkling of the transformation that would overtake the neighborhood in the coming decades.

Now friends ask Maffin, who heads the D.C. Real Estate Board and is an associate broker with Coldwell Banker, how she had the foresight to buy in an area where prices have escalated to well over $1 million for similar houses. She says she

But she can tell you about similar transitional neighborhoods that still have "affordable" housing but are on their way up.

"I'm thinking LeDroit Park, Shaw east of Ninth Street, Northeast in Brookland and Michigan Park," she said. "These areas all have good housing stock. There are young people coming in. The neighborhoods are looking better and better."

A median sales price of $412,000 for a single-family house or townhouse in the District last year was $7,000 below median for the entire region, according to a Washington Post analysis of government sales records. But at a median sales price of $365,750, the city's condominiums were among the costliest in the area, although they appreciated at only 12.3 percent last year vs. 28.8 percent for single-family houses and townhouses, according to that analysis.

The median is the midpoint in prices: Half of all homes cost more than the median, and the other half cost less. While some sought-after areas such as Cleveland Park have median prices of more than $1.1 million, many neighborhoods have median prices of less than $400,000. But would-be buyers should be aware: Many lower-priced areas are where real estate values are appreciating most rapidly.

The neighborhoods around the New York Avenue-Florida Avenue-Gallaudet University Metro station on the Red Line have shot up in value. The station, in Zip code 20002, opened in November 2004; that year, the median price of a single-family house or townhouse in that Zip code was $258,000. In 2005, the median was $376,000, a jump of 45.7 percent.

Other neighborhoods that have traditionally been among the city's more affordable have seen similar price spikes. To the north of 20002, Brookland and the rest of Zip code 20017 saw the median house price rise 44.8 percent, from $230,000 to $333,000.

Just to the east of that in Zip code 20018, which reaches to the city's eastern boundary, prices shot up at nearly the same rate, with a median house price of $350,000.

Though I was surprised to see that Woodridge's (20018) median price was higher than Brookland's. When we were looking for a home last spring - with 20/20 hindsight, not the best time to be naïve on the market - we couldn't afford anything in Brookland proper. Out of the 7 (!) houses we bid on, 1 was in Brookland, 1 in Lincoln Park, and 5 in Woodridge, where we are today. And, imho, I don't reccommend anything other than a traditional mortgage, particularly for first-time homebuyers still establishing credit.

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