Geoffrey Bannister works in downtown Washington, likes to bike to work and was renting a small home in Falls Church. When the landlord decided to tear down the house and build a larger one on the lot, Bannister figured it was a good time to buy.
His price range: around $500,000.
In a tight real estate market, many Washington area home buyers are finding it challenging to snag a property in the half-million-dollar range. Although $500,000 is considered the gateway between starter and higher-end properties, what you get for that amount can vary widely from one community to another.
The supply of homes on the market is at historic lows — especially in the $500,000 range, which experienced a 25 percent surge in sales during the past year, according to data from MRIS, the Rockville-based multiple listing service.
But Bannister lucked out: After looking about a month for a three-bedroom house in the $500,000 range in both Northern Virginia and suburban Maryland, he recently put a contract on a three-bedroom single-family home in Takoma Park that was built in 2008.
“We saw a bunch in Silver Spring that were rather older houses, built in the 1920s or 1930s, but those can have their drawbacks,” he said. “There was also a house that I saw that was really nice for $615,000, but then it was sold. It was a little expensive, so that worked out.”
Francesca Gianaris of Re/Max Metropolitan Realty, who was Bannister’s realty agent, said the market for homes in the $500,000 range has picked up. She said it was a race for another of her clients to get a seller to accept an offer on an Arlington home in the low $500,000s before the open house.
“She was able to buy the house last month. It was a small, charming, older duplex-style home in Arlington with a lovely little back yard,” Gianaris said. “It was a fight, though, and she had to throw in more money.”
With interest rates at near-record lows, more people are being enticed to move up to the $500,000 price range, experts say.
“The low interest rates are driving buyers in all price ranges, including the $500,000 range. The low cost of borrowing the money allows for much more buying power,” said John Stone, a real estate agent with Keller Williams.
In addition, he said, what was a starter home that was under water may now have reached a point where the owners can sell with some equity and make the jump to a higher price bracket.
John L. Heithaus, chief marketing officer of MRIS, agreed that low interest rates are heightening the demand for homes in general.
“Clearly we’re in a hot market, and the demand factor is high because rates are so low,” he said. “We see younger families moving back to the District in this price range.”
In addition, some real estate experts say the $500,000 price range is particularly competitive because of the conforming loan limit of $417,000.
“For buyers with 20 percent down, they can qualify for the best rates if they’re borrowing $417,000 or less, so when we are looking at a $500,000 price point [$100,000 down and a loan of $400,000], it’s extremely competitive,” said Katie Wethman, an agent with Keller Williams. “In other words, many buyers can only afford up to $500,000, so as we bump up against that ceiling, the competition can become very tough.”
Heithaus said affordability and what you get for your money are two different things. Generally, the larger the house that buyers in that price range are seeking, the farther outside the city they will have to look.
“It does partially depend on location, but if you are looking in the closer-in suburban towns or D.C. proper, it probably translates into a townhouse or relatively small single-family home,” Gianaris said.
“The simple truth is that the closer you get to our major job centers, like D.C. and Tysons, for example, the more you have to pay for less,” Stone said.
He added that a buyer more adjusted to the pricing of the area won’t need a four-bedroom home with a garage and large yard to accommodate a family lifestyle and may end up in a townhouse duplex in the Del Ray area of Alexandria or in a condo in Arlington.
“If they are willing to slug it to work, some will go as far south as Stafford and Fredericksburg for the much larger home but the longer commute in traffic,” he said. “Others are willing to give up the space for convenience. Coming to terms with what is the right balance for you can be difficult.”
From mini-mansions in scenic country-like settings to small but lavishly appointed condos, from newer construction to historic properties, $500,000 will buy a variety of housing types in the region:
Just under $500,000 will buy a five-year-old luxury five-bedroom, 31 / 2-bathroom home in Southeast Washington.
The $499,900 house on Suitland Road has a brick front, two-car garage, large deck and a fireplace. The house, in the Hillcrest neighborhood, offers 3,100 square feet of space.
On N Street in Southwest, $499,000 will get you a southern-facing two-bedroom, two-bathroom co-op unit in a waterfront high-rise. The building is two blocks from the Waterfront station on Metro’s Green Line, with Nationals Park and Arena Stage close by.
Steven Gross, a real estate agent at Welcome Home Realty, said the building offers unique architecture and was part of the urban renewal in the area in the mid-1960s. Features of the unit include renovated hardwood floors, two balconies and two formal rooms.
In more-established neighborhoods, such as many in Northwest, buyers will find smaller dwellings but in upscale communities. There’s a one-bedroom, one-bathroom condominium on the market on 25th Street in the West End for $499,900.
Its downtown location puts it within walking distance of Georgetown. The unit comes with high-end finishes including upgraded cabinetry, granite counters and stainless-steel appliances.
In Charles County, buyers can score big with a sprawling five-bedroom, 41 / 2-bathroom single-family home sitting on five acres in Hughesville for $489,900. The home, on Mairfield Court, has an extensive wrap-around porch for neighborly chats. It also offers nearly 3,804 square feet of space and comes with a formal living and dining room, a large kitchen with stainless-steel appliances, ceramic floors, a morning room and a recreation room. Hughesvillle is a quaint town with boutiques and craft shops.
For buyers looking for a place closer to the city, there’s a three-bedroom, two-bathroom single-family home built in 1954 in Kensington for $499,900. The Cape Cod on Lexington Court is on a cul-de-sac. The house is within walking distance of the MARC train, a farmer’s market, shops and cafes.
The house comes with a fireplace, updated insulated windows, vintage tile bath and the original hardwood floors.
Enjoy waterfront living? A two-bedroom, two-bathroom 997-square-foot penthouse condo at National Harbor is selling for $499,999. The high-rise on Potomac Passage has concierge services, a rooftop terrace, building amenities and a scenic harbor view.
The penthouse unit has upgrades, including stainless-steel appliances, hardwood floors, granite counters and a spacious living area. The community offers special events throughout the year, including movies on the Potomac.
A five-bedroom, five-bathroom house in Warrenton offers another example of how money can go further the farther one is willing to live from the city. The house, 40 miles outside the District on Von Neuman Circle in the Vint Hill community, is priced at $497,000.
It has a gourmet kitchen with granite counters, ceramic floors and top-of-the-line appliances.
“The home is a custom-built Victorian farmhouse by Miller and Smith that they will never make again,” said Clare Stalnaker, the owner, who has listed her home without a real estate agent. “There’s a lot of detail in it.”
In Gainesville, a four-bedroom 31 / 2-bathroom home on Tenbrook Drive in the Broad Run Oaks subdivision was reduced a few days ago to $479,000 from $489,000. The house, built in 2003, has hardwood floors in the kitchen, a deck, a patio and a koi pond.
The owners “have had a house built and they’ve moved in, and that’s why they’re reducing it,” said Linda Coffey, an agent at Long and Foster. “It’s great for a first-time or move-up buyer.”
Closer to the city, home buyers can find a two-bedroom, one-bathroom rowhouse on Mount Vernon Avenue in Alexandria’s historic Rosemont neighborhood for $499,000.
The home, built in 1946, has hardwood floors, crown molding, a partially finished basement and a fenced-in back yard.
Carisa C. Chappell is a freelance writer.