By David Nakamura
Washington Post Staff Writer
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."
For example, Susan Haynes, a psychology professor from Los Angeles, is coming to the inauguration with two friends. They have a reservation at a Ramada Inn in Cecil County, Md., for $99 a night but would like to find something closer. Her housing budget is $250 a day, said Haynes, who is using Butters's Web site and real estate agent Joe Yu to help her find something suitable. They are looking at a one-bedroom apartment in Glover Park that costs $300 a night.
Deana Bass, an Alexandria public affairs consultant who founded the housing Web site obamadcbound.com, posted a notice on the site encouraging homeowners to lower their rates.
"People are revising their listings," she said. "But they're still asking much more than people are willing to pay."
Homeowners say it's not worth the risks and hassles of allowing strangers into their residences -- liability, contracts, insurance, cleanup -- if they don't earn top dollar.
Amani Council, who owns a four-bedroom house in Temple Hills, posted an advertisement on another inauguration housing Web site offering her basement unit for $800 a night. She got one offer for a total of $200 for several days, which she rejected.
"It's got to be worth the money for the inconvenience," she said.
Kara Snesko, who lives with her husband in a recently renovated two-bedroom house in Capitol Hill, listed her property on Butters's site in November for $1,500 a night.
Ten days later, she was contacted by Angela Blair, who does public relations for Veridicus Films in Fort Worth. The company is screening an Obama documentary on Inauguration Day, and Blair was looking for lodging for her bosses, Maria Arita and Thomas Howard, who directed and produced the film.
Blair offered Snesko $600 a night for five nights, but Snesko balked. She reconsidered only after Butters called to tell her, "If you don't take this, you might not get anybody at all."
This week, Snesko, who works at the State Department, signed the deal.
"It's $3,000 we didn't have before," she reasoned.
Tim Tate, the glass artist who lives at Mather Studios in Penn Quarter, also reduced his asking price -- dropping from the original $2,000 listing for the week to $1,750 and then to $1,500.
Tate got the idea of making a quick buck from a neighbor, Jon Gann, who runs a filmmaking and film festival consulting business. One day after Obama's election victory, Gann listed his unit at Mather Studios for $3,000 for inauguration week.
Within two days, Gann received offers from four people. He asked for references from each and signed a contract with a Chicago doctor, who is bringing three relatives with her.
"I figured they wouldn't destroy the place," said Gann, who plans to visit his brother in New York while his place is occupied.
Tate has given up on a big payday and decided to invite family and friends to his condo for an inaugural party. Morocco will have to wait.
"Everyone thought it was easy money," he said wistfully.