Inaugural Rentals Begging For Takers
Friday, January 9, 2009
Across the Washington region, homeowners' dreams of a quick and easy payday are evaporating as the days tick down to President-elect Barack Obama's swearing-in ceremony Jan. 20: The inaugural housing market has gone bust in record time.
Those who listed their properties within a week or two of Obama's Nov. 4 election victory were able to score deals, but those who jumped on the bandwagon after that have largely been left without offers.
Take Tim Tate, for instance. When he heard that a neighbor had rented out his condo in the trendy Mather Studios in downtown Washington for $3,000 for inauguration week, he and his friends hatched a plan to rent out their own units and use the profits for a week-long jaunt to Morocco.
But nearly two months after listing his condo on an inaugural housing Web site (one bedroom, one bath, $2,000 for the week), Tate has gotten nary a nibble. Neither have his friends. He dropped the price twice. The only inquiry came from European parents who wanted to rent it for their daughter's semester in the District.
"We all started to list, and then the silence ensued," said Tate, a glass artist and founder of the Washington Glass Studio.
Since word spread of get-rich-quick glory, homeowners flocked to online sites, flooding the market with hundreds of properties seeking upward of $10,000 for the week. But supply has far outpaced demand, said real estate agents and creators of Web sites devoted to brokering deals. This week, with the holidays over, demand has picked up slightly, the brokers said, but most people are not likely to find renters.
"I'm blown away by how little demand there is," said Tania Odabashian, vice president at Corporate Apartment Specialists in Northern Virginia.
"Initially, we were flooded with calls from people looking for [inaugural] housing. For about four or five days, the phone would not stop ringing. . . . But now we have apartments as low as $150 a night that we can't get rid of. I've rented one two-bedroom in Tysons Corner. We have six or seven apartments inside the Beltway that will probably end up empty."
Brokers cite several reasons for the sluggishness. Initial crowd estimates of 4 million people were far too high -- officials are now planning for half that -- and scared off many potential visitors. The difficulty of getting tickets to official events may have prompted others to stay away. And property owners who had visions of easy money priced their units way too high, often for more than $1,500 a night.
"Everybody wants to make extra cash," said Andre Butters, co-founder of inauguralhomes.com. "They see a few people put ads on Craigslist for $10,000. People think that's what the norm is. That's not what the norm is."
It's a renters' market, and what prospective renters are seeking are residences that are close to the U.S. Capitol and cost no more than about $500 to $600 a night, Butters said.
He had 680 properties listed on his site and a closure rate of about 5 percent, meaning he had done about 40 deals. Almost nothing over $1,000 a night is being rented, Butters said: "There's just too much out there."