Mounting mortgage interest rates are expected to cool off this area's housing market for a few months, but parts of the District may escape with only a chill.
House sales in the metropolitan area have been running hot and cool through much of the year. In recent weeks, buying has been generally strong. But there is increasing evidence that 10 percent-plus mortgage money will take its toll.
Record high mortgage rates are a real financial deterrent for some buyers and a psychological barrier for others. However, unsually strong demand for expensive housing inside the District line has shown sign of abating.
In addition to the young people who are part of the new household formation surge, this housing market is buttressed by those who are moving from big suburban houses or rental units to intown properties that are likely to appreciate as investments.
Those with the recent histories of Georgetown, Foggy Bottom and Capitol Hill in mind perceive that that new or rehabilitated housing in certain areas will be prime investments over the next decade. If the immediate past is any prologue, then the 1980s should see the District housing market taking a lead in this area.
Earlier this year, the Westbridge condominum building in the West End section near Georgetown sold out quickly, even before construction began. Sales also have been strong - at high prices - in new Georgetown projects and on the Hill, in Kalorama and other locations. The Beekman Place town houses on 16th Street NW were sold out a year earlier than the developer's projection.
Now the Glover tract, a prestigious site south of Ward Circle, between Massachusetts and New Mexico avenues, shows signs of becoming a major force in the luxury class market.
The formidable Foxhall condominium there has already established a reputation, despite its slow start in the down market of 1974. Nearly, on another section of the tract, developer Lawrence Brandt has begun a complex he is calling Sutton. As of recently, sales contracts have been signed for 73 of the 76 two-story-over-two-story, piggybacked town houses being built in the first section. Prices range from $107,500 for a two-bed-room unit to $138,500 for three bed-rooms. Pirces in the second section can be expected to be higher.
Newly opened for sales after the completion of three dazzling modeals of traditional town houses, the Westover Place complex created by Kettler Brothers Inc. on the Glover tract already has caused one marketing professional to use the word "landmark." The brick and masonry dwellings designed by Alan Lockmand are carefully detailed and, in some areas, grouped around private inner entry courts apart from parking.
The first Kettler project in the District, Westover is prived far higher than Kettler house in Montgomery Couty and Northern Virginia. Westover prices begin at $197,500 and go to $222,500 for the first section. The houses have three levels over basements. Sales contracts are being taken slowly from a list of 700 "interested parties" who had contacted the firm prior to opeing. This project was more than a year in being readied for offering.
Altogether 149 town houses will be built on an eight-acre site that the Kettlers acquired for $3.2 million, bringing several undeveloped parcels together on the site just beyond the Foxhall building.
Below the Foxhall, developer Gerard LaVay (who built the area's first condominium town houses at the Crest on Western Avenue more than a decade ago) has combined with the Donohoe Companies to plan a December start on 90 modern town houses in a complex called Embassy Park. They were designed by the Alan Lockman firm.
LaVay said the two-and three-story houses will be priced around $150,000. No models will be built, he said, and shoppers will be shown plans and blueprints.
In additon to the town houses, the Embassy park project is expected to eventually include a high-rise rental apartment building. Developer Brand's nearly Sutton complex will also include a luxury high-rise apartment building. Undoubtedly, both will be offered as rentals for a few years and then be converted to condominium ownership if that market continues strong.
Some of the action in this area south of Ward Circle is also being generated by the announcement that the 614-unit Towers apartment buildings in the 4200 block of Cathedral Avenue are expected to be purchased soon by a developer who has not disguised his intention of turning that 20-year complex to condominium ownership next year.
As a result, tenants in the Towers - some of whom have been there more than a decade - are looking around for alternative purchases in the area. Already they are eyeing Sutton place and Westover Place and soon they'll get a fill-in on Embassy Park.
Meanwhile, a number of intown rental buildings in the areas of Kalorama, West End, Connecticut Avenue, Capitol Hill and Georgetown have also gone condo.