Despite high interest rates, resale prices of condominiums in the District continued to climb sharply in the first half of 1981, a new study by the city's property assessment office shows.
Average prices of resale condos jumped by 16 percent over the prior year, with the average sale price of both new and resale units reaching $82,000 in the first six months, up from $66,800 two years ago. The monthly appreciation of the resale units continued to be "extraordinary," assessor George B. Altoft said. The rise in the sales average partially reflects new luxury construction under way in Georgetown, he said, but it also reflects the double-digit annual increases on the prices commanded by existing units.
Condominium units are still considerably less expensive than detached houses, however, which averaged $126,000 in sales price in June, but condos are moving out of reach of greater numbers of buyers, the assessor's study indicates.
Altoft observed, however, that the prolonged mortgage crunch and high prices may soon begin to slow the rise of condominium resale values.
In looking at 213 transactions between January and July where condos were resold for the first time, Altoft found that the average unit had appreciated by 2.4 percent every month during the initial ownership period.
Condos purchased during the first half of 1980 and resold during the first half of this year racked up average resale prices that were 50 percent higher than their original sales prices, an increase in value of more than 4 percent a month. Units purchased in 1979 and resold this year appreciated by an average of more than 2 percent a month; units bought between 1972 and 1978 appreciated by 1 percent to 2 percent a month before they were sold this year.
For example, a unit bought for $43,200 in October 1979 in the Cairo rental conversion at 1615 Q St. NW, was resold this June for $75,000 -- a 74 percent gain in 21 months, or about 31/2 percent a month. Another unit, purchased in the same building for $53,000 at the same time, resold for $86,000 last April, for a 61 percent gain over 171/2 months, an average 3.4 percent per month.
Condo conversions that took place earlier in the 1970s tended to have slightly lower average monthly price gains, but large aggregate jumps in resale value. An apartment at Carrollsburg Square on M Street SW was purchased originally in December 1975 for $59,000. It resold for $120,000 this June, registering a 103 percent increase in market value over the span of 66 months -- an average rise of 1.6 percent per month. At The Worland, at 2828 Wisconsin Ave. NW, a unit bought for $120,000 new in December 1977 resold in April for $169,000 -- a 40 percent increase over 40 months. Another apartment there purchased for $110,000 in August of the same year, sold for $182,000 last January, a 66 percent jump over a period of 41 months.
Altoft said that the high rates of appreciation were the result of several market factors. Some of the resales have been by first-time buyers in conversion projects, for example, tenant-owners are cashing in on discounts they got when they first bought, he pointed out.
Other units that have been held for four years or more -- particularly those located close to the downtown employment and cultural areas -- have turned out to be "highly sought-after places to live" that have doubled or nearly tripled in value, he said.
Other findings in Altoft's semi-annual survey:
Condominiums now account for half of all units sold in the city, roughly double their proportion two years ago. There were 2,326 condominiums sold during the first half of 1981, up from 1,780 during the same period last year.
The condominium boom continues to be a major revenue-producer for the city government. Conversions of rental buildings and condominium construction added $85 million to the real estate tax base between January and July.