D.C. area condo market driven by affordability, lifestyle choices

April 4

Affordability and lifestyle choices are often the biggest factors driving Washington area buyers into the condominium and townhouse market.

Buyers embrace these home styles for their lower maintenance requirements and, often, their location in a walkable community near shops, night life, restaurants and public transportation.

A big issue in the D.C. area housing market continues to be a lack of properties for sale, but new listings are up compared with last year and new contracts were up in the first 11 days of March, says Jonathan Hill, president of RealEstate Business Intelligence (RBI), a subsidiary of the Rockville-based multiple listing service MRIS.

“Contracts on [resale] condos are leading the way with an 18 percent increase compared to the first 11 days of March last year,” Hill says. “Townhouses are next with a 10 percent increase.”

RBI data show that from February 2013 to February 2014, townhouse listings rose 25.7 percent and condo listings jumped 28.9 percent.

“The city has really changed in the past decade or so, with more and more people wanting to live in the city,” says Ryall Smith, a real estate agent with Coldwell Banker Residential Brokerage in Washington. “People are working really hard, and they don’t want to spend their time commuting. They realize it’s not healthy for their personal lives or for family life.”

Smith says people are more willing to compromise on the size of their home in order to live in a neighborhood they want and to take advantage of the city’s walkability.

“The number of sidewalk cafes and restaurants we have in this city has just exploded over the past 10 years,” Smith says. “People love to take advantage of everything the city has to offer, including parks and green spaces as well as the cultural amenities and night life.”

Whether they’re looking in the city or in the suburbs, townhouse and condo buyers are typically eager to move to a location they can enjoy yet comfortably afford.

Less than $400,000

Inventory is low across the board. But Angela Rawlins, a real estate agent with Long & Foster in Crofton, Md., says first-time buyers can find both condos and townhouses in Prince George’s County for less than $400,000.

“Most first-time buyers would rather buy a townhouse than a condo because a condo is closer to an apartment,” Rawlins says. “In Prince George’s County, you can often find a three-bedroom, 2.5-bathroom townhouse with a garage for the same price as an apartment.”

Rawlins says townhouses appeal to young couples and families, but in her area, the appeal is more about the price and proximity to public transportation rather than to restaurants and night life. She says these buyers are looking for hardwood flooring, an updated kitchen, a master suite with a private bathroom and a small yard with a deck. Townhouses in Prince George’s County are priced in the upper $200,000s and low $300,000s, she says, and condos are priced in the $100,000s and $200,000s. Rawlins says buyers with a bigger budget opt for a single-family home.

“Condo buyers tend to be young first-time buyers, but they still want some upgrades like granite counters and stainless steel appliances,” Rawlins says.

Eduardo Zarate and Madi Castillo, buyers who worked with BJ Matson, a real estate agent with Keller Williams Realty in Rockville, were renters who needed more space. “We’ve been living in a two-bedroom apartment with one child, and now my wife is pregnant with our second child,” Zarate says. “We’ve been saving money for a down payment and decided we’re ready to spend the $2,200 per month on a house instead of renting.”

Zarate found a three-bedroom townhouse with a finished basement and a fireplace in Silver Spring and, with Matson’s help, they were able to see the property and make an offer before an open house was held. The couple are moving from Chevy Chase, Md.

Yi Zhang, another buyer who worked with Matson, opted for a townhouse in Germantown priced just under $400,000. He and his wife wanted more space than their apartment had because they plan to have children, and he also wanted a home in a quality school district, in good condition and convenient to his work and to the Chinese grocery stores along Interstate 270.

In the District, Smith says you can find a studio or one-bedroom condo with a parking space in a gentrifying neighborhood for $350,000 to $400,000 or a smaller unit without parking and that hasn’t been fixed up for $300,000 to $350,000. He says the high-end, deluxe loft-style condos cost more than $400,000.

“Condo buyers in the under-$400,000 price range are usually singles, couples or ‘mingles’ who are roommates buying together,” Smith says. “These buyers look at these places as an investment that they’ll live in for a few years and then rent [out], so they’re very concerned that it’s in a location near public transportation and within walking distance to restaurants and night life.”

Smith says one other group of condo buyers includes empty-nesters or frequent visitors to the city who want a one-bedroom, one-bathroom condo to use as a second home.

“I’ve worked with some grandparents who want a small condo to stay in when they visit their children and grandchildren in the city,” Smith says.

In Virginia, condo and townhouse buyers in the lower price ranges are completely focused on affordability, says Rob Blitzer, branch vice president with Re/Max Allegiance in Burke. He says these buyers can be singles, young couples with children or sometimes empty-nesters who want to reduce their home maintenance chores.

“Families with kids will try to afford a townhouse because they want more space and a little yard, plus the different levels make it feel a little bigger,” Blitzer says.

Amy Stanley, broker/owner of Century 21 Leading Edge Realty in Manassas, says she’s seeing more younger buyers in their 20s purchasing townhouses farther from the city. Stanley says these younger people are bucking the trend of wanting to live in the city because they’re budget-conscious and feel they’ve been wasting their money on rent. They’re trying to buy a home and yet have a lower monthly housing cost. They’ve watched the market correct itself and like the idea of investing in a property they can live in now and then rent in the future.

“These are people who are paying $2,700 or $3,000 in rent, so they’re opting to move farther out in Fairfax County or Loudoun County or to Manassas to get into a townhouse,” Stanley says.

From $400,000 to $600,000

Stanley says that move-up or double-income buyers in Northern Virginia are interested in townhouses in the $400,000-to-$600,000 price range, where they can find a four-bedroom, 31 / 2 bathroom home with four levels. She says these buyers want the convenience of a townhouse with less yard, or they’re looking in an expensive neighborhood where single-family homes are too costly.

Stanley says condo buyers in this price range are mostly looking for a walkable lifestyle.

“Condos priced between $400,000 and $600,000 are usually right on top of everything in communities like Fairfax Corner, Fairfax Town Center and Reston Town Center, where buyers can walk to everything and get a little more space than they would with a less expensive condo,” Stanley says. “Usually these are purchased by a couple with two incomes, but these also appeal to older singles or divorced people who have sold another home before buying a condo.”

Stanley says condos in this price range are also available in Alexandria.

“We’re seeing empty-nesters buying a $500,000 condo in North Arlington to be near Metro, but if they want a newer place, even a one-bedroom will cost $550,000 in that location,” Blitzer says. “Young buyers, especially urbanites who want to walk everywhere, are drawn to North Arlington, too, because they don’t need a car, and they can walk to night life.”

Lenore Rubino, a real estate agent with Coldwell Banker Residential Brokerage in Washington, says buyers of all ages in the city are giving up their cars and are focused on living close to cultural attractions and restaurants.

“It’s pretty tough to find anything under $400,000 unless you want to take on a big renovation project, but even in that case, buyers usually need to spend more than $400,000 to get into a townhouse,” Rubino says. “Older buyers especially don’t want to put in a lot of work, so if they’re looking in the $400,000-to-$600,000 price range, they’ll need to look in a less convenient neighborhood like Glover Park or find some new construction on the edges of Capitol Hill.”

Marisa Martino and her husband, David Van Horn, worked with Rubino to find a townhouse in Columbia Heights when they relocated to D.C. from Boston.

“We bought a fixer-upper that was completely infested with cockroaches, mice and rats,” Martino says. “We’re basically camping out here while I do some of the work myself, although we’re hiring a plumber and an electrician for some of the work. It’s worth it to us because we love the neighborhood, and we wanted to live within walking distance of a Green Line Metro station.”

Martino and Van Horn paid $500,000 for the 103-year old home and have already replaced the roof and windows as well as had the place exterminated.

Above $600,000

While some home buyers would never dream of spending more than $600,000 on anything other than a single-family home, many buyers in the D.C. area are opting to spend that much in order to live in the city or in a walkable location or to have luxury amenities.

“In Northern Virginia, condos above $600,000 are mostly in the high-end buildings in Rosslyn with views of the city or on the water in Old Town Alexandria,” Stanley says. “Buyers of these places are usually more of a status buyer, someone looking for a showplace where they can entertain.”

Stanley says townhouses ranging from $800,000 to more than $1 million in Falls Church, Arlington and Alexandria tend to appeal to families who want to be in a quality location with good schools and an easy commute.

“One of the things we’re seeing in the city is that all the dots are connected,” Smith says. “People can actually get a starter home, then a home where they can have their career and their family, and then there are also larger one-level condos for when they become empty-nesters.”

Smith says empty-nesters are often looking for a turnkey, larger condo where they can move after they sell their single-family home, so they’re willing to put their money into it.

“These buyers will sell a home for $800,000 to $1 million and then be able to make a big downpayment on a condo and still keep a lot of cash,” Smith says. “There’s a whole new market for people who want to stay in the city while they make the transition from work to retirement.”

Rowhouses in the city are typically priced above $600,000 depending on the neighborhood and the condition of the home, but many are priced at $1 million or more.

“The number one source of buyers in D.C. is people who are bursting at the seams in their current place and need to move into a larger townhouse,” Smith says. “A lot of these buyers bought a place when they were single and now are married with kids, so they have a place to sell and can move up into a larger home on Capitol Hill or another part of the city.”

While some condo and townhouse buyers are focused on this type of home for the lifestyle and location, others are primarily concerned about their budget but want to get started on the path of homeownership.

Both groups of buyers need to remember to include condo fees and homeowner association dues in their calculations when determining what they can afford.

Michele Lerner is a freelance writer.

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