The prices of some of the most stately homes in the Washington area have risen as much as $45,000 since election day as sellers prepare for what they believe will be a massive wave of wealthy Republicans sweeping into Washington behind President-elect Ronald Reagan and a bevy of conservative new members of Congress.
Some Washington homeowners have listed their houses on the market with huge markups -- which could bring them up to $77,000 profit -- just to see if any of the expected 6,000 newcomers will bite. And homeowners are not the only ones hoping to cash in on the modern-day California gold rush.
In Alexandria yesterday, an estimated 500 real estate agents gobbled free sweet rolls and listened to the city's 21-piece string orchestra as city and school officials used their best hard-sell tactics to convince agents that the Virginia suburb is the perfect spot for Republican newcomers. a
It is still too early to know where Reagan's staff and supporters will settle. Since the former Hollywood actor-turned-politician has not named his Cabinet, few top Reaganites have bought homes here. But when they are ready to buy, they will discover this area's market primed and ready for big-buck sales.
While high interest rates have stalemated real estate sales under $250,000 here, few realtors believe the 15 percent rates and tight lending policies will deter conservative Republicans from buying homes with some of the area's most exclusive addresses.
Many sellers are putting their homes on the market now -- rather than waiting for spring, according to realtor Vicki Bagley.
"I just listed a mansion on the Potomac for $1,250,000 that has an indoor, 60-foot-long swimming pool with a rope that swings from the second-story master bedroom over the pool," Bagley said. "The owners think that will appeal to a Californian."
"Prices don't scare them, because prices in California are higher," realtor Bill Duggan of McLean said after yesterday's session in Alexandria. Most of those in the market for such houses have established credit and will not worry about an interest point or two when buying expensive homes, he said.
"We are dealing with a different kind of buyer than we were four years ago when the Georgians came to town," added Jane Coyne, who is a personal friend of several top Reagan aides and operates an exclusive real estate service in Northwest Washington.
"The men and women who will follow Reagan here are experienced bankers and businessmen -- sophisticated persons of means who live in large cities and in big houses and are used to spending what it takes to get a nice property," she said.
"I know a lot of people who are listing their houses with brokers at ridiculous prices just to see what will happen when Reagan comes to town," says David Adler, publisher of The Washington Dossier magazine. It only took Adler eight hours to sell all the advertising space in a special real estate supplement he plans to deliver to Reagan's transition headquarters this week.
Most newcomers are likely to be wary of homeowners who are selling only to make a quick profit. Nevertheless, realtors say many buyers can expect to pay premium prices for houses worth $250,000 or more, because many defeated Democrats and their staffs are not moving away and there is a shortage of homes in the upper price range.
"This is a new phenomenon for Washington," Coyne explains. "We've never had so many established Congressmen lose their jobs.
"People on [Sen. Herman] Talmadge's staff have lived here 20 years. They aren't going home to Georgia. They are staying here, Washington is not a transient city anymore, and the market for nicer homes is really, really tight now and it's going to get tighter with the Reagan people moving in."
The tight market has led to escalating prices, especially at the watergate, a Republican citadel that during the Nixon administration housed Attorney General John Mitchell, presidential secretary Rosemary Woods, campaign fundraiser Maurice H. Stans, Sen. Bob Dole of Kansas, and, next door, the Democratic National Committee headquarters.
Assuming Reagan's followers also will be attracted to the ritzy Virginia Avenue address, Watergate residents started raising prices within days after the election, real estate records show.
A two-bedroom, two-story, ground-floor unit owned by Dorothy Thompson had been on the market for nearly a year at $325,000 but was upped to $350,000 after Reagan's victory. The realtor handling the property said the price was raised because "we had priced it too low to begin with, not because of the election."
A three-bedroom condominium in Watergate East, owned by James Brockett, president of First Commercial Bank in Virginia, was listed at $450,000 for three months. Last week, the price was increased to $485,000.
Another Watergate tenant put his one-bedroom condominium on the market five days after the election at $300,000. "That's about $100,000 more than one-bedrooms sell for," one agent disclosed. "He's just trying to make a killing."
Watergate is not the only high-rise affected by California gold fever. Before election day, a two-bedroom condominium with a pool-side view at the Westbridge complex in the 2500 block of Pennsylvania Avenue was priced at $230,000 by its Philadelphia landlord. After the Republican sweep, the price jumped $45,000, to $275,000.
A career civil servant listed his Foxhall Village home the day after Reagan won for $275,000 and immediately got four calls from brokers with interested clients. He had bought the five-bedroom house 11 months earlier for $198,000.
"I'll only accept cash," explained the official, who asked not to be identified. "Who's to say my price is too high? In today's market, it might be too low."
So far, Reagan aides have been interested in Georgetown, the Kalorama-Embassy area, Watergate and Foxhall Village because those places are close to the Kennedy Center, other cultural spots and good restaurants, says Coyne, who has sold two homes in Northwest Washington to Reagan administration members for more than $300,000 each.
"They are willing to forego a swimming pool just to be inside the city," Coyne said. "These people are from California, they know about commuting and they don't want to do it."
At yesterday's 3-hour meeting in Alexandria, city officials plugged their suburb's close-in location, cheaper housing prices -- averaging $92,000 per house, $77,000 per condo and $161,000 for Old Town property -- plus intergated schools, three soon-to-be completed Metrorail stops, and lack of high-rise development and unstructured growth.
The sales pitch soft-pedaled recent violent-crime increases in Old Town and ignored problems between the city and school board.
"I've been surprised because I figured conservative Republicans would not be real big spenders," said Jay Chambliss, manager at von Meister and Georgelas Properties in McLean where Mrs. Reagan sought help before the election when looking for a place to rent.
"But," Chambliss said, "they are not shocked by the prices. The only thing that seems peculiar is that they all want two- or three-car garages. They seem to think it snows here from October to June."
While Washington's creme de la creme market is booming, property listed under $250,000 still is stagnant. But realtors expect the transition to perk up the depressed market. "They all can't afford $300,000 homes can they?" one realtor asked.
Across town, Coyne doesn't think she will have any trouble selling a $750,000, the two-bedroom condominium at Foxhall Village she listed this week.
"You can entertain 250 people easily in this exclusive home," she said. "Besides, small -- and I mean really small -- homes in Beverly Hills cost $650,000. Reagan's top people are not going to be scared away by this price. For what they are getting, it's a real steal."