They were a real estate agent's dream: well heeled, well educated and preapproved for a $400,000 home.
But in the District neighborhoods where the couple wanted to live, all that real estate agent Leyla Phelan could show them were one-bedroom apartments in Logan Circle or small houses in Petworth or Brightwood.
A residence undergoes rehabilitation in the LeDroit Park neighborhood, where total property assessments more than doubled in three years.
(Kevin Clark -- The Washington Post)
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"It just blows my mind," said Phelan, an agent in Northwest Washington. She said the city's continuing real estate boom has been great for her business and good overall for the city. But as a District resident, she has concerns about who will be able to afford to buy a home in the city in the future.
"They can't all be attorneys and patent lawyers," Phelan said. "I love them as clients, but D.C. also has a lot of nonprofit people and universities. As a citizen of the city, you have to ask, where are the Whole Foods workers or gas station attendants going to live?"
Those hoping for a respite from skyrocketing property values will be disappointed when the District government begins mailing out assessments this month, city officials said. Residential assessments on average will rise citywide by 15 to 18 percent, said Thomas Branham, the city's chief assessor.
Branham said his department has not finished crunching the numbers and does not have data broken down by neighborhood. But he said he has seen no dramatic changes in terms of which neighborhoods are experiencing the greatest rise in values.
An analysis of city assessment data from 2002 to 2005 shows that Shaw, Logan Circle, Dupont Circle, Capitol Hill, Eckington, 16th Street Heights and Columbia Heights were among the neighborhoods that had the sharpest rise in real estate values, with total increases of more than 130 percent in each of those communities during the three-year period.
But even in the three city neighborhoods with the smallest overall change -- Congress Heights, Marshall Heights and Fort Dupont Park -- assessments rose by at least 39 percent over those three years, the analysis shows.
Real estate brokers who work in the District said homes in neighborhoods such as Logan Circle, Shaw, LeDroit Park and Petworth continue to appreciate dramatically because their values were relatively deflated in previous years. And neighborhoods that already were highly valued, such as Georgetown and Cleveland Park, continue to post large gains.
"Pricewise, we're not seeing any sort of slowdown," said Fred Kendrick, an agent with Coldwell Banker Residential Brokerage in Georgetown.
Based on sales data from the Greater Capital Area Association of Realtors, Kendrick said, single-family houses and townhouses increased in value by 15 percent from 2003 to 2004, while condominium and cooperative units rose by 23 percent.
Branham said that condos and co-ops are still catching up after years of being undervalued and that he expects that they will outpace single-family houses in this year's assessments as well.
District officials are grappling with how to protect residents from the city's success. Last year, the city reduced the cap on annual property tax increases from 25 percent to 12 percent and increased the homestead deduction from $30,000 to $38,000.
Still, D.C. Council members and others worry that rising prices are locking out prospective buyers who want to live in the neighborhoods where they grew up and putting pressure on elderly homeowners on fixed incomes who can't handle the rise of property taxes.
