GDoN Revisited by Hipchickindc – 1224 Orren St NE

Featured Property: 1224 Orren St NE
Original List Price: $299,000.
List Price at Contract: $299,000.
List Date: 07/10/2010
Days on Market: 3
Settled Sales Price: $320,000.
Settlement Date: 09/16/2010
Seller Subsidy: $5000.
Bank Owned?: No Short Sale? No
Type Of Financing: Conventional

Original GDoN is: here.

The Listing can be seen: here. To see pics, after opening the listing link, click on the main pic and scroll through.

At only three days on the market and substantially over list price, clearly somebody saw the value of an entire updated house with a basement and parking. Given that the property sold over list, it is likely that there was more than one interested party.

I was happy to profile this property simply because this is one of those areas that has not been visited much in the course of Good Deal or Not (GDoN). Over the years, I’ve owned a property in Trinidad and represented clients for more than ten four-unit buildings in the neighborhood. Just like many other parts of the city, Trinidad has seen values head up and then back down, but it has generally not returned to early 2000 prices of sub-$100k.

While I haven’t personally lived in Trinidad, I have definitely had the experience of living in a gritty urban neighborhood because I could get the kind of space I wanted for what I could afford at the time. When people say that there are no affordable neighborhoods left in DC, they are often keeping their options somewhat limited.

For those who might be curious about what is currently available for sale in Trinidad, here are residential listings and here are multi-unit buildings.

24 Comment

  • Thanks for the follow up Hipchick. About half of those listings in your link are in Carver-Langston, a little different from Trinidad.

    I like the listing on Levis St, short walk to Jimmy V’s Sullivans and Cap City Diner. It’s still a little rough on that street, maybe not for long.

    The listings on Queen St and Staples could be solid investments.

  • “When people say that there are no affordable neighborhoods left in DC, they are often keeping their options somewhat limited.”

    Exactly. What they are really saying is “I can’t find a house or apartment with everything that I want in a neighborhood that has everything that I want and that I can afford.
    It’s like dating. When people say there are no good peopleto date, what they really mean is “I can’t find a person that fits my specific dating criteria who is interested in dating me.”

    • Well, I think this house makes the point about the lack of affordable housing. A $320,000 house is not affordable to someone making the median HH income in DC.

      • This house happens to have been fully renovated, which makes it one of the more pricey homes in that location. There are less expensive ones available. Link is provided above.

        • That’s a fair point about this house being at the top of the market for Trinidad, but I still find it remarkable that you’d need to earn nearly 6 figures to afford a house in one of the highest-crime neighborhoods in the city (albeit one of the nicest homes in that neighborhood). To me that’s not “affordable housing.”

          • This is not one of the highest-crime neighborhoods in the city, not even close. Do some research

          • On a per capita basis it most certainly is. Sure Adams Morgan and Columbia Heights and Dupont have more total crimes but they also have many times the number of people walking around.

          • I just went to Crime Reports dot com and do a search for all crimes on this particular street since May 1. Results- Zero

          • Your 6 figures assertion is just wrong — especially at today’s rates. Someone making roughly half of $100,000 with great credit and a lot of savings could qualify for this home. Their monthly payment would be fairly affordable after tax considerations are realized.

          • To the person who couldn’t find any crimes on this street since May 1: Technically, you weren’t lying. But the amount of crime in the neighborhood since then is pretty scary, don’t you think?

            Trinidad residents have perhaps the thinnest skins in the city. They need to face the fact that their neighborhood still has a very long way to go.

  • @ Tres: What?? Even with low rates, someone earning $50k could responsibly borrow about $200k tops. So yeah, if they had $120k in savings, they could qualify for this house. Maybe in your world most people are carrying around that kind of cash, but not in mine.

    • While you are right that someone making about $50k yearly salary couldnt afford this place you def could afford it for less than $100k yearly salary. If you had $30k to put down or even $20 and made about $70k per year you should be fine all other things considered.

      • I think that’s kind of a stretch. A $300,000 mortgage @ 4.37% is $1500 a month. Then you have your taxes and upkeep for an extra few hundred a month.

        $70k salary is $5800 a month gross so with this example your total housing expenses are over 30% of your gross, before tax, salary, which I think is high. But maybe I’m pretty conservative financially.

        • I agree with this. I make around $70k and have crunched the numbers, and decided that 300k is about as high as I can responsibly go.

    • Home purchase in DC for many people is heavily subsidized by various programs that provide types of 2nd mortgages. Some of the recent GDoNs have sold with that kind of financing. You should research those.

      I’m not sure how “responsible” one has to be in terms of borrowing, but in terms of being able to qualify, here it is:

      DTI is the limiting factor, but you can go as high as 45% under some circumstances. I’ve talked to lenders about this recently.

      The scenario I ran on this is $50,000 cash, credit at least 700, 4.5%, no other debt obligations. Monthly payment is $1250 principle and interest. Taxes are $250, insurance maybe $50. $1550 gives someone making $50,000 a DTI at 37%. So it is possible. Someone making $60,000 should qualify easily — DTI would be 31%.

      Many renters in DC at these income levels probably pay close-ish to $1500 anyway. Even if we say your average non-profiteer making $50,000 is paying around $1200/month, they’ll still find the mortgage to be an similar burden once they get their tax refund.

      • Mortgage of $270k @ 4.5 has a payment of $1368, not 1200. And 45% DTI is CRAZY.

        • 45% is CRAZY, but re-read what I wrote. $50,000 down. Mortgage is $250,000.

          I found a link to one of those programs. They say they’re offering interest rates of 3.875%. I dunno. I’d check it out.

          I forget the name of the other DC programs that subsidize home purchase. I’ve had friends use them. Someone else might know…

          In any case, what I’m saying is that anecdotally, I know tons of folks here in DC who are -renting- at DTI levels that are somewhat crazy. They’re already used to supporting a high cost of living, so why not consider putting that same money towards a home?

          You have to think about the benefits of being insulated from inflation. If you are going to be in DC for 20 years, you’re going avoid rent increases. A $1500 rent tab, growing at an average rate of inflation of 3% will reach $2700/month in 2030. So if you buy now and stay in your home, by 2030 you’ll be realizing a huge savings even if your salary only grows with inflation.

          There are obviously many factors to consider, I’m just laying out some different approaches.

          • Agreed, but the tricky part is saving enough for the downpayment while paying these outrageous rents. I’ve been doing it for the past few years, but the tradeoff is having to live in an area I strongly dislike.

          • Well, this house sold for $320k so the mortgage is actually $270k.

            I’m totally with you on the benefits of owning a home if you plan to stay in a place for a long time, but I don’t think it’s a good idea to stretch so much to pay a mortgage. I mean, have we learned nothing from the past 2 years?

            Also, I’ve never paid more than 25% of my gross pay in rent. Maybe that’s conservative but I have school loans and I like to have disposable income and to be able to save for emergencies. None of that would change if I bought a house.

          • I’m a NACA homeowner and the program is generally fantastic and not a scam. I recommend anyone check it out, especially if you’re not rich and looking to buy a house. The only caveat is that NACA is a nonprofit and may not be as efficient and fast moving as a corporate lender, and they make sure you can afford the house you get. Note the resulting mortgage you end up with is from Citi, at which point you’re dealing with a ‘normal’ lender. Anyways, check them out, just bring some patience.

      • “You should research those.”

        I’ve researched those hypothetical programs everyone alludes to once in a while and found nothing except for DC Bond Program which is a joke as it offers higher rate than regular lenders.

        “DTI is the limiting factor, but you can go as high as 45% under some circumstances. ”

        That’s exactly right… some lenders are willing to let you live on the edge, where you will lose everything the second you lose your job. I guess it could be OK for government workers as they are the only ones with decent job security, but pushing the numbers so much is just a huge gamble for most people.

        • This should help.

          I don’t know how DC Bond works, but I’m sure there’s better than a detrimental effect. You might have to make phone calls to get up to date info about it.

          I’m not advocating maxing out your leverage, but people should be aware that they can be a touch more aggressive if need be. If the neighborhood you love has 2 bedroom condos that are priced slightly out of your comfort zone, you might consider pushing the numbers a little as opposed to buying a 1 bedroom.

          If you buy the 1 bedroom, outgrow it (have kids, wed a WNBA player, etc), and have to sell it after 5 years, you’re not seeing any financial benefit to ownership (you’ve actually taken a loss), and at the same time you’re assuming all the risk of a decline in value. So sometimes the financially prudent move is to push your personal limits.

  • Ha! This was the very first home that I owned and resided in when I was a lowly paid Capitol Hill staffer! I made some improvements to it, but I couldn’t afford a renovation as nice as what the current sellers have done. Good to know the home is still looking good.

  • You can always rent a room or two out

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