The average selling prices of single-family houses in the District rose by only 6 percent in the past 12 months -- the slowest rate of gain in more than a decade, new data prepared by the city's real estate assessment office shows.
Compared with the steady 15 to 22 percent increases of the previous five years, the 1980 figures "represent a very significant cooling of the market," said Charles Horwitz, the city assessment supervisor who conducted the price review.
"Even in [the recession years of] 1973 and 1974, prices here kept going up in the 10 to 17 percent range," he said. "Now we're beginning to see some actual declines in neighborhood average prices" of 10 to 18 percent -- even in some higher-priced Northwest areas.
Horwitz emphasized that the declines do not mean that property values of individual homes have dropped during the year. They do mean that the average price of all the houses sold in many neighborhoods have leveled off or declined -- an unusual phenomenon in the "recession-proof" District.
Horwitz attributed the slowdown in prices primarily to the difficulties of financing homes as expensive as the District's in an economy of double-digit mortgage rates. The average sales price in 1980 has been $99,694, compared with $94,096 the year before.
Twenty-nine of the District's 56-assessment areas had average prices in excess of $100,000, 12 had average prices of more than $200,000, and one (Kalorama) had average prices of more than $300,000.
Horwitz's study documented what many industry professionals suspected this year about the over-all sales volume of single-family houses in the city: Volume was down 24 payments from 1979 -- 3,068 sales during the first nine months, as compared to 4,028 in the same period of 1979 -- and down by 42 percent from 1978, when 4,900 houses changed hands during the first nine months.
A companion study to Horwitz's prepared by city assessor George B. Altoft revealed that the District's real estate slowdown has also affected condominiums. Between January and October of this year there were 2,305 condo units sold here -- a marginal 2 percent increase over 2,263 units sold in the same period in 1979.
The average sales price of condos dropped by about 1 percent -- from $68,900 to $68,350 -- but Aloft attributed this to the greater number of sales of lower-priced units to tenants in buildings converted from rental to condo ownership.
Most existing condos, in fact, are growing in resale value strongly, Altoft's data indicates, despite the challenging financing situation. In a random sample of 100 resales of condos in 1980, for example, the typical unit jumped by more than 2 percent in resale value for each month it was held, Altoft found.
Units in prestigious buildings such as the Westbridge in West End appreciated in value by as much as 5 to 8 percent a month. One Westbridge unit Altoft studied was bought for $23,600 on Aug. 28, 1979 and resold for $242,400 on Aug. 29, 1980 -- long enough by one day for its original investor-owner to chalk up a $118,000 capital gain. Another unit in the same building went from $116,400 to $225,000 in 10 months time.
Altoft cautioned that new buyers of condos shouldn't assume that their units will gain in value as impressively as the average unit resold in 1980. Financing is getting more difficult for condo units as well, "and no one can really predict where appreciation rates are headed on any form of D.C. real estate for the next year or so," Altoft said.
Among this year's top neighborhoods for resales of single-family homes, according to Horwitz's data, have been: Kalorama (up 25.7 percent to $329,000 average sales price); Woodley (up by 25.9 percent to $273,167) Hawthorne (up by 26.5 percent to $191,700); Riggs Park (up by 27.1 percent to $77,905); and Lily Ponds (up 34.6 percent to $47,538).
The neighborhood experiencing what Horwitz termed "statistically significant" declines in average sales prices were: 16th Street Heights (down 19.3 percent to $77,698); Glover Park (down 4.2 percent to $132,275). Colonial Village (down 10.3 percent to $150,750); Wesley Heights (down 18.7 percent to $193,263); and Observatory Circle (down 4.3 percent to $219,144).