This week’s featured home, a two-bedroom penthouse condominium at Washington Harbour, is a rare waterfront residence in the District with 180-degree unobstructed views of the Potomac River from its 1,000-square-foot veranda.

“We’ve had cocktail parties of 40 guests or more on our balcony at sunset,” said homeowner C. Howard Wilkins Jr., the U.S. ambassador to the Netherlands from 1989 to ’92, who along with his wife, Rhonda, have entertained much of Washington’s political crowd here.

Mortgage rates continued their upward climb this week, according to the latest data released Thursday by Freddie Mac.

A sign displays mortgage rates inside a Citibank office. (Justin Sullivan - Getty Images) The 30-year fixed-rate average rose to 3.62 percent, up from 3.59 percent a week ago. Since falling below 3.5 percent for the first time late last month, the rate has increased steadily the past three weeks. It was 4.15 percent for the same week a year ago.

The 15-year fixed-rate average remained below 3 percent for the 12th consecutive week, but it too went up. It grew to 2.88 percent from 2.84 percent a week ago, but was down from 3.36 percent a year ago.

The hybrid adjustable-rate mortgages also remained below 3 percent this week. The one-year ARM averaged 2.69 percent, up from 2.65 percent a week ago but down from 2.86 percent a year ago.

Rising prices made homes less affordable in the second quarter, the National Association of Home Builders and Wells Fargo reported Tuesday.

According to the Housing Opportunity Index (HOI), 73.8 percent of all new and existing homes sold in the second quarter were affordable to families earning the national median income of  $65,000. This is down from a record-high 77.5 percent of homes that were affordable to median-income earners in the first quarter. 

In the Washington metro area, 73.3 percent of homes sold during the period were affordable to those earning the area’s median family income of $105,700. The Washington region ranked 172 out of the 226 metro areas surveyed. It was more affordable than Asheville, N.C. (182), Boulder, Colo. (183), El Paso, Tex. (198), Santa Fe, N.M. (202) and Dover, Del. (216).

The news about the Washington area condo market has been encouraging in recent weeks. 

Following the housing bust, the single-family market in the region rebounded relatively quickly and shows sustained priced growth month after month. The condo market, however, languished, primarily because of the difficultly faced by would-be condo buyers in getting a loan. A recent report released by Delta Associates showed that in the first half of 2012, condo sales were up, inventories were down and a shortage of condos in the region was predicted.

While the condo market has looked much healthier in recent months, we are unlikely to see a major price surge regionwide, even with the dwindling supply.   

Condo sales picked up appreciably in the first seven months of 2012. According to MRIS data analyzed by the Center for Regional Analysis at George Mason University, there were more than 1,200 condo sales in the 22 jurisdictions making up the Washington metro area in July 2012.  Sales have climbed steadily since January, and 2012 summer condo sales totals are at the highest levels since 2007.

 With the rise in sales came declines in inventories. At the end of July, condos made up about 16 percent of the inventory regionwide but were more than 20 percent of July sales. The availability of supply varies across the region. In Arlington County, for example, the demand for condos has far outpaced the supply in recent months.
Condo sales in the Washington metro area (GMU Center for Regional Analysis, MRIS)

Declining inventories have led to price growth. While the average price for all homes — single-family and condo — has been up in 29 of the past 33 months in the D.C. region, condo prices have lagged. But spring and summer of this year have brought strong price appreciation. Condo prices have been up every month since March, and in July the average condo price in the Washington metro area was $310,000, nearly 9 percent higher than a year ago. Condo prices were up 12 percent in Arlington and Fairfax counties in July. Average condo prices in Prince George’s County have been up by around 40 percent for three months in a row.
Percent change in condo prices (GMU Center for Regional Analysis, MRIS)

Rising sales, declining inventories and price growth seemingly indicate that the condo market here in the D.C. region seems poised to take off.  However, several other factors suggest that while the condo market will continue to stabilize, the recovery will start to look more modest.

First, thousands of new rental units are set to become available over the next few months. The rental market in the D.C. region had become very tight — with very low vacancy rates and fast-rising rents in many neighborhoods. Some would-be renters who had a sufficient downpayment and credit began seeing a condo purchase as a better deal.  Trulia, an online real estate listing service, reported in March that D.C. was one of the markets where it was cheaper to buy a house than to rent. With the delivery of so many new rental units, rents will drop — or at least stop rising so fast — in many neighborhoods and renting will be comparatively more attractive. While still quite low, mortgage interest rates have been edging up in recent weeks, which also enters into the buy vs. rent calculus. 

Okay, my green roof has been built on my front porch.  In the final task associated with it, the Anacostia Watershed Society (AWS) came out to verify the green roof’s final dimensions before processing the District Department of the Environment (DDOE) $750 rebate, which I will receive within six weeks. 

Now, I am past all the logistics of designing and building, and I can enjoy my roof.  Even at this early stage, it’s a beautiful roof to enjoy.   
The new green roof on the front porch of Annette L. Olson's Petworth home. (Photo by Annette L. Olson)

I want to say thanks to DC Greenworks, Roof Solutions, AWS, the structural engineer and DDOE for helping make it happen.  It’s nice to get up in the morning, look out the window like I always do, and see plants, some of which have already grown half an inch!

Of course, now I get to take care of the roof.  DC Greenworks normally provides maintenance the first year, but I agreed to do it to keep costs down.  Besides personally wanting to keep it nice looking and functional, in order to receive the DDOE rebate, I had agreed to ensure “80 percent vegetative coverage and continued stormwater management performance in perpetuity.”

Well, achieving 80 percent will take some attention — right now the little plants cover less than 10 percent of the roof.  DC Greenworks says it’ll be two growing seasons before they’ll cover it.