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Developer Reflects on a 'Buoyant' Market

By Dana Hedgpeth
Washington Post Staff Writer
Monday, August 30, 2004; Page E03

D.C.-based Monument Realty LLC is one of the most active developers in the region. It has 2 million square feet of office space and residential units under construction or expected to break ground in the next six to eight months in Northern Virginia and downtown D.C. That makes it fairly bullish compared with many competitors, who fear the regional market may not continue to climb back from the trough it fell into in the last recession. Michael J. Darby, one of the principals of Monument, talks about real estate.

Q What is going on in the real estate market now?

More investors are buying condos, said Michael J. Darby, a principal of Monument Realty LLC. Below, a rendering of Monument Realty's Odyssey Condominium, under construction in the Courthouse section of Arlington. (Katherine Frey -- The Washington Post)

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ARight now, everybody is trying to get as much done before something happens. I don't think they know what that something is, but they think something could happen. If there are major changes in the national economy, that could have an effect. I don't think it's going to happen quickly, but people are scared it could, and they're worried about the implications.

What are the implications?

D.C. is such a buoyant market, and a lot of people are enjoying that. If you get an economic downturn, it affects them and that's not a good thing. There are people who feel that residential pricing on condos, especially, is escalating too quickly. We see more investors buying condos, and they need to sell or rent them. The question is: Are there enough renters for the units? I don't think anyone in Washington knows.

What's the future of the real estate market look like?

If people believe things are going to keep going, they'll keep buying. If they get nervous, they'll stop buying. Right now there's a fevered pitch with buyers and investors [on condos]. People are telling stories of buying a place for $300,000 and flipping it 12 months later for $400,000. They put 5 percent down, and it turns into 20 times what they planned on making.

Can that intensity keep going?

It's going to get to a point where people just can't afford these units. We are starting to see people who are having sticker shock at the pricing. But then just when you think it's going to get hard to sell the units, you see three or four people coming behind the sticker-shocked guy to buy. People are moving downtown. They value their time and they're sick of commutes.

What is going on in the office market?

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