Purchasers of apartments converted to condominiums in the District during the past three years -- particularly tenants in the Northwest section of the city -- racked up huge captial gains when they resold their units in 1980, a new study by the city's assessments office indicates.
Some condominiums increased in value by as much as 13.6 percent every month they were owned, said George B. Altoft, the assessor who compiled the study of condo sales.
Altoft examined price increases on 375 of the units that were resold for the first time during the last quarter of 1980. The average gain at resale was about 32.4 percent for every year of ownership, or 2.7 percent a month.
Apartments purchased during 1979 and 1980 that were resold for the first time last fall showed even larger average gains -- 3.4 percent per month for units bought in 1979 and 8.3 percent a month for condominiums purchased and resold in 1980.
Altoft, who monitors the condo market for the property assessment office, pointed out that the biggest monthly gains have come in tenant-converted buildings, where residents had the opportunity to buy their own apartments at substantial discounts.
"Tenatns who begin with a price that's 30 percent below the true market value for their real estate get a big head start," Altoft said, "and when they sell within the first year or two they usually walk away with a lot of money."
Altoft's study covers 177 condominiums that were resold last year, most of them in Northwest, where the bulk of the converted buildings are located.
At one Northwest building, the Carlton Towers at 2829 Connecticut Ave., two purchasers boughts their units in 1980 and resold them for a quick profit later in the year.
One buyer paid $31,520 for a Carlton Towers apartment in May and sold it in October for $53,000 -- a 65 percent increase, or 13.6 percent for each month it was owned.
Altoft also concedes that his data actually understate the true, dollar-for-dollar economic returns to sellers because the mortgage debts on the properties are not disclosed.
For instance, if the seller of the $53,000 unit originally purchased the property with a $5,000 down payment (and obtained a $26,000 mortgage loan), the seller's dollar-for-dollar return would be something on the order of 300 percent for the entire transaction, of 60 percent a month.
The second unit resold in the Carlton had a similarly impressive gain: The tenant-purchaser paid $33,318 for the apartment last July and sold it in November for $52,000 -- a 56 percent gain, or 13.4 percent a month.
Altoft's survey indicates that the longer the condo unit is held, the lower the month-by-month percentage increases in resale value.
The typical unit purchased in 1975 and resold for the first time in 1980, for example, gained 2.1 percent a month throughout the holding period. Units purchased in 1972 and 1973 have appreciated by 1.6 percent a month during the period of first ownership.
"We talk about 1.6 percent per month or 2.1 percent per month being 'below average.'" Altoft commented, "but in reality those numbers are staggering. They mean property value increases of 19 percent to 25 percent, year in and year out, and 133 to 150 percent in five to seven years.
A selection of Altoft's findings are shown below. [CHART OMITTED]