GDoN Revisited by hipchickindc – 532 24th St, NE

Hipchickindc is a licensed real estate broker. She is the founder of 10 Square Team and is affiliated with Keller Williams Capital Properties. 10 Square Team is a advertiser. Unless specifically noted, neither she nor the company that she is affiliated with represented any of the parties or were directly involved in the transaction reported below. Unless otherwise noted, the source of information is Metropolitan Regional Information Systems (MRIS), which is the local multiple listing system. Information is deemed reliable but not guaranteed.

Featured Property: 532 24th St NE
Legal Subdivision: Old City #1
Advertised Subdivision per Listing: Old City #1
Original List Price: $399,000.
List Price at Contract: $399,000.
List Date: 11/10/2011
Days on Market: 57
Settled Sales Price: $380,000.
Settlement Date: 02/06/2012
Seller Subsidy: $0.
Bank Owned?: No Short Sale? No
Type Of Financing: Veterans Administration backed loan (VA), a 100% financing opportunity for qualified Veterans
Original GDoN post is: here.
The listing can be seen: here. To see pics, click on the main pic after opening the link and scroll through.

Good Deal or Not Revisited (GDoN-R) has looked at very, very few properties in this price range that were neither a) condo ownership, or b) in not very nice condition. Thus it amuses me that the comments on the original Good Deal or Not post (GDoN) for the renovated, livable subject property (with parking, no less) were largely tilted toward “overpriced”. (Recall that last week’s GDoN-R, was, in fact, not in very nice condition, was listed for $549,000. and sold for $700,000.) Alas, the adage of “location, location, location” comes very much into play.

This was not even the highest recent sale in the area within the past six months. There were three higher sales within relatively close proximity.

True, one can buy on the lower end of the pricing spectrum as well. Note, however, that active inventory is actually tight (surprise, surprise). Here are the recent sales in the past six months originally listed under $300,000. In some cases, certainly not all, these lower priced properties are getting bid over list price and are attracting cash investors. In 2010, the unrenovated properties were typically going for sub $150,000.

Hmmm. Let’s think about this. Investors see an opportunity to buy cheap (by DC standards) property, renovate it, and sell it for more to buyers willing to pay for the renovated product. Buyers, I might add, who want to live in a whole house rather than in a few hundred square feet. I’m not saying that this neighborhood is going to turn into Dupont Circle overnight, but it’s worth considering that a very short time ago, some of the same types of comments to the GDoN post could have been said regarding a few blocks to the west around H Street, or other areas like Bloomingdale or Petworth.

37 Comment

  • What a great home and a good deal for some savvy buyer.
    This neighborhood is a bargain and remarkably close in.

    Even Gladys Kravitz would be jealous.

    • Close in to what? I like the house, but 24th St isn’t close in to anything, as far as I can tell.

      • all relative, no?

      • It’s not far from H Street, is semi-walking distance to the Stadium Armory metro station, and is a block away from the X2 bus line. And if/when the streetcar line opens, it will be close to that too.

        • It’s a mile east of the Granville Moore’s and a mile north of Stadium Armory. I’m not saying it’s not a nice house, and I’m not saying it’s not a nice neighborhood. I’m saying it’s not “close in”.

          The streetcar will definitely be a boon to it, though.

      • I live on 24th St and I LOVE my neighborhood. Super close to H st, I go out there all the time, and lots great community feel. Houses are selling because no normal young 20-30 something person without a sugar daddy can afford a house anywhere else in the city.

  • why do some people take such close up photos? they need a wider lens, or to back up. i want to see full rooms!

  • Good deal. Rosedale and Kingman Park are still reasonably priced, and I think early investors are going to kill it long term.

    It’s crazy to me that commenters on the original GDoN thought this was “too far east”. In the coming years, people will look at these sort of comments and think they are bananas, as this neighborhood is only minutes from the Capitol Building.

    • Cleveland Park is also “minutes from the Capitol Building.” Obviously “too far east” is a relative term, but this place is not walking distance to anything of note other than the Pizza Hut on the Google map. And having to rely on the X2 every day sounds fun. The last time I rode that bus (and I rise buses all the time) 6 Guardian Angels were standing guard. That doesn’t sound like critical mass for anything good. And if you’re waiting for the streetcar to get built, you’ll be waiting a long time, my friend.

      • I’ll make you an bet then…
        $100 bucks.
        You start driving from Cleveland Park and I’ll start walking from Kingman Park.
        Who ever gets to the Capitol first wins….

        • Are you here yet? I’m standing in Statuary Hall. Now, what am I going to do with my $$$…

          • Why has this post so raised your ire? Pay the same price for a condo based on a what Google Maps said?

          • I waited around but you took too long; I walked back home…took me just about 20 minutes.

            😉 peace to you.

          • SF, I think you missed the point entirely.

            Frickorfrack – you win.

          • 15 minute walk to H street. I lived in NE on 7th St before this and it took me as long to get to Union Station or to the restaurants on 8th St. Also, 15 min walk to Stadium Armory Metro. So yes, it’s close to something. Say what you want about X2 but it runs more frequently and consistently than many other buses in the city IMO.

      • Whatever, dude, Pizza Hut serves beer.

  • Wow. Where to start? Maybe with the breezy understatement “This neighborhood is not going to turn into DuPont Circle anytime soon.” Or with the 2005-esqe analysis that is other properties in a neighborhood are selling for a higher price, this place must be a good deal. Hurry up and get in the train or you’ll be left behind! This post just reinforces my theory that the most of the people making money off of real estate in “transitional” neighborhoods are the realtors and the flippers/developers. After they jack up the price on some naive soul, with visions of a huge profit when a coffee house opens down the street, magically making the area desirable & safe, the “juice is gone from the orange” – most of the profit has been made and the buyer’s unrealistic hopes probably will go unrealized. After all, the point of buying a home is to live in it. If the neighborhood sucks now, it might get better and the buyer might be sitting on a gold mine. Or, it might not. Then, the buyer is faced with living in a neighborhood that probably will have serious shortcomings for several years and the appreciation of the home is only so-so. After all, what is the engine of economic development in this neighborhood? A new Redskins stadium? FedEx isn’t exactly sitting in the middle of a retail/restaurant wonderland. So many reasons to pass in the location here, and no concrete reasons to buy, other than inexpensiveness. Not much of a good deal, if you ask me.

    • Huh? How about that it is simply a great, diverse neighborhood, literally just 2 miles from the Capitol Building and with really fine people living there who take care of and appreciate their homes and neighborhood. The metro (Stadium Armory) is already there and the street car is just a year away. I have to tell you also the ANC and the Kingman Park neighborhood association are very active…real community involvement.
      Sorry, but a neighborhood doesn’t have to have some coffee house to make it “good”.

    • theheights…I would assume that means you live in Columbia Heights? Ten years ago, the perspective on “The Heights” was not that much different.

      I live in a neighborhood that many considered “scary” when I started working here and eventually moved here. It was also considered too far away from anything. Now I take pleading calls from other agents trying to get their clients into listings before they hit the market.

      • Your assumption would be incorrect. Columbia Heights is a good example of what I’m talking about. No question it is better than it was. But exaggeration of the neighborhood’s attributes is legendary. CoHi is nowhere near worth the prices it currently commands and I helieve that will limit buyers’ profits upon resale. Anyway, you didn’t answer my points to your original post.

        • Really curious, then, to know where theheights lives, and why he/she seems to loathe this neighborhood so much.

          • The Heights Apartment Complex, Manassas, Va.

          • It’s not a matter of loathing the neighborhood. I’m ambivalent about this neighborhood. My point is that the much of the purchasing in transitional neighborhoods is based on pure hope of further developments that may or may not occur. The idea that prospective buyers have to “get in early” leaves out the important caveat that the realtor is pumping up hope when she has no evidence that it has any foundation. It all boils down to this: If you’re buying in a certain neighborhood because you’re going to make a killing as the neighborhood improves (a refrain repeated ad nauseum around here), you’re taking a big risk. If you’re buying because you’re basically happy with the way things are now, you’re probably going to be happy with your choice. After all, if a neighborhood needs to improve so much (and this is not about Kingman Park, but rather a larger point), why would you want to live there in the first place?

            As for anonymous (brave, aren’t you?) quip about Manassas, I would point out that cracks about the suburbs, which is not where I live, btw, usually are a replacement for actual ideas. Try harder, next time.

          • @ The Heights – every real estate purchase involves significant risk. Continuing to rent and not purchasing also involves risk. I’m not sure of the point you are trying to make here.

          • H Street Landlord: every risk is not equal. I know that this is heresy on this blog, but buying a house in A transitional neighborhood (take your pick, any will do) is clearly a larger risk than buying a condo (or a house, if you can) in an established neighborhood. The simple reason is that the transitional neighborhood might not become what the buyer wants or expects. Of course, if it does, the buyer might be in for a payday. But if it doesn’t, then the buyer will see less appreciation as well as less than ideal living conditions (crime, schools, etc.). Again, I know that on this blog crime is purported to be low in everyone’s neighborhood (especially in those where it actually is high), so that point will not make headway. Even though you claim that every real estate investment entails risk, obviously some are far riskier than others.

          • @The Heights – it depends on how you are ranking criteria.

            1) Purchasing a less expensive house (if it is livable) has much less downside risk – you can’t lose more than you paid.

            2) Arguably a more inexpensive home can appreciate faster/at a greater rate than something more expensive due to starting at a much lower base.

            There is also the possibility you mentioned. All three scenarios are equally valid. Also, sometimes, people buy houses just to live in.

    • I’ll agree with you that there is a lot of hope that gets preyed upon in the real estate bus. Especially with young first time buyers in transitional neighborhoods. It can be sad.

      And I’ll absolutely agree that in my opinion the rough areas all around H street are no longer good buys. So much development is anticipated there, and with near certainty, that prices now pretty much reflect what the area will look like in ten years, IMHO. As has been said before, they better pray for the street car. So it would seem that in this area you will pay a boatload of money and live with unpleasant neighbors for quite some time while receiving a less than ideal ROI. Or else less than other neighborhoods.

      Don’t get me wrong, the area WILL be nice. But the houses won’t go too much up in value when it does. IMHO.

      If you buy in Trinidad (or 24th st) you might as well just buy in Anacostia for 1/2 price. I strongly considered it and would have done so had a great oppurtunity elsewhere not come up.

      Which leads me to the point where I disagree with you. This neighborhood will be nice. It will develop. I hate to jump on bandwagons, but I feel that it’s safe. People are moving to cities all across the country, not just in DC. It could reverse, of course, but I don’t see it happening.

      You asked what the driver of economic activity in that hood is? No, it’s not the Redskins. Like in every other neighborhood in this city it is the federal government. If you like your property value, vote Obama 2012.

      • I honestly hop you’re right because everyone is better off when DC’s neighborhoods get safer and more desirable. As an aside, that doesn’t mean that improvement demands displacement. It means that long-time residents get to enjoy appreciation of their homes, the streets get safer, etc. it would be bad if every neighborhood in DC “gentrified.” I just find the exuberance in the real estate market here (so close in time to the lessons of 2008) to be alarming.

        • I concur that there is some cause for alarm.

        • Before 2008, a kitten could get a loan. Housing crashed because people couldn’t afford their homes, and couldn’t sell because loan requirements changed to reflect peoples’ incomes — not Mittens’.

          You should be most concerned with income, not home prices. Prices are driven by income in 2012 — they’re a reflection of the robust growth in the area. It’s a sign of good things happening. If the job market starts to decline, that’s when you get bearish on housing.

    • Here’s how it works.

      Imagine a bell curve that shows the income of the “gentrifier cohort” in DC. It’s easy to make money if you buy a house at the left hand side of the curve, just before it bulges upward. Once the neighborhood is “discovered” by the majority (people in the middle of the curve), it’s appreciation potential gets less and less, because there are fewer and fewer buyers as we go further along the curve. Price acceleration decreases above the home price that the median income person can afford.

      Keep in mind that most people search in a range — a given couple might only be interested in homes from $400k – $500k. If neighborhood acquires a $400k average price, then an army of nascent demand is awakened — more people are interested as the price goes up. More demand, limited supply = rapidly increasing prices. I really don’t think it has much to do with people thinking they’ll strike gold or eventually get a coffee shop, so much as market forces.

      Most of the neighborhoods PoP focuses on recently awoke those armies of demand — and it’s reasonable to assume that as DC’s population increases (for the first time in a generation), the same phenomenon will repeat itself again and again.

      You also have to look at DC’s relatively wealthier suburbs — as DC acquires more and more enviable resources (shops + schools + safety), more would-be suburbanites will move to the neighborhoods in DC offer shorter commutes and a walkable lifestyle.

      • I think you’re right, generally. You’ve explained rhe inflation of prices, but those prices could ve over-inflated (mini-bubble), which is what I’m suspicious of. There’s just such a disconnect between the vibe of this commentariat and th realities on the ground. I’ve walked around many (not all, by far) of the favored neighborhoods spoken of here with such optimism and found reality doesn’t come close to justifying the hype. Where we really disagree is the nature and effect of DC’s population growth. I don’t see any reason that an Arlingtonian or Bethesda-an (whatever they call themselves) would move to DC for walkability (they already have that), schools (DC schools are improving, but when you’re at the bottom, that’s not saying much and MoCo & Fairfax County are two of the best school systems in the country), or safety (DC is more dangerous). Therefore, my concern is that orices as they are are not sustainable because the young, childless people who are pledging their futures to transitional neighborhoods will think twice (and quickly) when they have kids. Then, if there’s not another childless couple to buy their place at an inflated cost (so they can recoup the money they paid the developer), the game will come to a halt rather quickly. I really think if DC doesn’t drastically improve the schools and general safety, this trend is not sustainable.

        • If a critical mass of young couples move in — who all are of similar backgrounds — it’s likely that the school in that neighborhood will be acceptable to them, being as the school is populated by the children of their peers. So the question is when we run out of people to continue this trend — someone could get stuck in a neighborhood that doesn’t reach critical mass. Possible, but not as likely to happen when the population is increasing.

          Arlington and Bethesda aren’t walkable by DC standards. The parts of the burbs that are walkable are very expensive. Same consideration: condo in Arlington or a home in Trinidad.

          Like H Street mentions, renting has its own set of risks. What if you’re gentrified out of your neighborhood? What if your income doesn’t rise over time (rents always do)? What if after a wave of gentrification sweeps over DC, you can’t afford a parking space here? Condos, in my mind, are far more risky than home purchases.

          The risk of not partaking in potential appreciation isn’t zero. By renting, you could be trading away a much better life in the future for a life that is marginal at best. Opportunity cost 101.

          • i think we’ll be seeing a lot less gentrification in residential areas. commercial areas will still build up, but the rate of people moving into the city has slowed. and crime is moving back up.

            i agree, there will be people stuck in neighborhoods that haven’t not reached a critical mass of middle class community oriented folk.

            i hope i’m wrong.

          • @ anon – can you substantiate this? Crime is at a 55 plus year low.

  • I’ll just add that it is super, super easy to get out of town from this location– BW Parkway is just down the street. This area is way more accessible than people give it credit for, even before the streetcar starts running.

    • +1

      It’s also close to two Safeways and an Aldi.

      And affordable with possible rental income from the basement. Plus its a nice quiet neighborhood. Not everyone wants to live right on a bunch of bars.

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