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Many Buyers Must Try, Try Again As Condominium Market Shrinks
Victoria Hammond's third time trying to buy a condo was the charm, and she moved into 1800 Wilson in Arlington.
(By Gerald Martineau -- The Washington Post)
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Earlier this year, the Joule in Arlington, developed by Ed Peete, also went from condos to rentals. In Leesburg, Comstock Homebuilding went so far as to repurchase 58 of the 316 condominium units at the Bellemeade for $12.8 million before selling the building to a Midwestern apartment operator in June.
In rare cases, developers have combined condos with rentals.
Take the Four Winds at Oakton. Orion Residential bought the property in April 2005 and renovated it as condos. So far, about 225 have been sold.
In January, Orion decided to rent 103 units because sales were not fast enough. "In order to create a little cash flow during the sales process, we decided to release those," said Dan Gumbiner, Orion's president and chief executive. The company hopes to sell them eventually and is offering a lease-to-own program.
At Vaughan Place in Northwest Washington, the developers -- Ross Development and Investment and Carlyle Group, a D.C. private-equity firm -- sold 186 units to individual buyers, then sold the remaining 388 to a New York rental company in April.
That has rattled some of the owners. Lenders give less favorable loan terms to people who buy or refinance units in buildings where most residents are renters or where most are owned by a single entity, said Kevin Connelly, a mortgage banker with Pinnacle Financial in Vienna.
"I have very mixed feelings about it. In terms of my day-to-day living here, it's extremely pleasant," said Patricia Kenworthy, who bought her condo at Vaughan Place in April 2006. "In terms of thinking if I had to sell for some reason, it's very scary."
Christopher Ullman, a spokesman for Carlyle, said, "We remained on course in terms of our business plan, which was selling and/or renting condos."
Still, analysts said that because of local job growth, they don't expect the condo market to melt down in this region as it has in other areas of the country. The result here will be a healthier market as supply and demand reach an equilibrium, analysts said.
"What we're seeing is a pipeline that was started being completed, and there's virtually nothing being put in the pipeline, whether from lenders or developers," said John McIlwain, a senior fellow for housing at the Urban Land Institute.
Hammond, the government consultant, was eventually able to buy, this time at 1800 Wilson Boulevard in Rosslyn. In June, she had a "Third Time's the Charm" housewarming party. "Happy ending," she said.
Not so for Leigh Robertson.
A foreign-service officer, she wanted to buy a condo before moving to Bangladesh for two years. She put down a deposit in November on a one-bedroom at View 14. When that fell through, she put down a deposit at Highland Park in Columbia Heights. Now in Bangladesh, she is still waiting to hear whether the contract will be ratified.
If it doesn't go through, she plans to suspend her search until she returns.
"I'm going to buy something that's ready," she said. "Beware of pre-construction."
