Dear PoPville – Good Deal or Not Revisited? A tale of 2 houses

Ed. Note: Regular GDoN Revisited contributor hipchickindc is down with the flu. Feel better hipchick!

Dear PoPville,

Recently you had a post about retaining the original details in a house. Something interesting that happened this year down a few blocks down the street. Two houses were purchased in the same row and were remodeled and sold. The interesting part is that they are basically started as the exact same house with the same base layout. I am wondering what the readers think — which was a better deal, which one people like more, and what do they like or not like about each?

Here are some more details. Please note, that some of these details maybe estimated.

House 1: 5523 2nd St NW

Asking: $400,000
Sold: $421,000

Time on market: 1 open house for 2 hours resulted in a bidding war.
Description: House was in disrepair, so it was gutted. Layout of the house was changed with led for to a nice master suite. Bathrooms were moved also. Laundry on second floor. The purchase
Remodel done by some large all-in-one buy it, remodel it, sell it company.

House 2: 5527 2nd St NW (more photos here.)

Asking: $450,000
Sold: $427,000

Time on market: 2 months — went under contract after 2 open houses, but possibly fell through, then went under contract again.
Description: Original details were maintained as much as possible. Less open w/ more room separation. Master bedroom has vaulted ceiling.
Remodel done by Lofft Construction, a local place on Kennedy.

40 Comment

  • binpetworth

    Both were good deals. Personally, though, I like House 2 better. Even though the rooms look darker and are smaller, I would be drawn to the idea of having more leeway to put my personal touch onto it and not have to paint an entire floor of the house when you want only one room a different color–and I’m a sucker for the dark wood molding. House 1 is perfectly nice, but a bit too cookie-cutter bland for me.

    • Agreed. I’d even pay a slight premium for the 2nd house. I love the original wood details, the lofted bedroom with beams, and the restored built-ins.

      The backyards for both houses are a bit disappointing. Though there isn’t much space to work with, I’d probably eventually build out a large, raised deck with a parking space underneath.

  • It would have been more interesting if they had been both listed for $400K or $450. As it is, considering they settled for $6000 within each other, one is left to wonder if the pricing spurred the bidding more more so than the property per se; I would venture that it was the marketing of the lower list price since in the end it did settle below the historical feature property. Just a speculation and nothing more.

  • Very interesting example. Of course, it’s also an example of the power of staging. The people with that first house really staged it (cookie cutter staging, no doubt, but they do it this way because it does look friendly and inviting) while the second house requires a lot more imagination.

  • Shows that market pricing works I guess. I like them both, though like others, I dig old wood.

  • Where they on the market at the same time? That would be interesting if they were.

    I’d pick the second one over the first one hands down. I LOVE the vaulted bedroom in the second one. And I think the kitchen has a lot more personality. I also love that they kept all the original woodwork and built-ins. In my opinion it has a lot more character. I dislike the trendy tiling in the bathrooms of the first one. In 5 years that will look completely outdated. I guess I just prefer a more classic look.

    That said, it does not surprise me in the least there was a bidding war on the newer looking one- especially since it was originally priced $50k lower than the second one.

  • I might also add that the first one obviously not only had professional staging, but also professional photography done. That makes a huge difference when driving traffic to the house. The second one, while I ultimately would choose it over the first one, has what appears to be poorly done amateur photos. That could also account for why it took longer to sell.

  • Honestly, I prefer the house with more original details. Those built ins in the dining room are to die for. It’s a shame they sort of half-assed the kitchen though. Some higher end appliances and ceiling height uppers would have made that much more impressive.

    • Agreed. The second house’s kitchen is really sad. I think the price difference would have been greater if the second house’s kitchen hadn’t been worse than the first house’s.

  • I thought I would go for the second one hands down, but the first one is done very nicely (for your standard gut job). The master closet space and bathroom with his and hers pedestal sinks are very nice…

    In the end I would probably still go with the House 2 – it would be more fun to make your own. The ceiling in the master is AWESOME, with the exposed beams and 2nd row of windows. I also appreciate the back deck and outdoor space, even if it appears to be small.

  • I actually prefer the first house. I love the openness and all the light. I’m not a fan of dark molding and wood work. I live in a home with separated rooms and hope my next space has a more open concept on the main living floor. The only downfall in my opinion for house 1 is the carpet on the bedroom level.

  • Though I like character I prefer the first house/open floor plan. To me though it was completely gutted, they created charatcer with the sofits, there are clearly defined spaces and it flows nicely.

    I would imagine that in a few years the owners of the second home will look to expand/open up the entry ways more to created a more open line of sight floor plan. I do love the ceiling in the master bedroom. I also like the brick work on the back of the house. Never seen that before.

  • Viewing these as end users, everyone will choose their preference and be happy. The closing prices aren’t far enough apart to be obvious for either side.

    But the REAL way to tell who got the better is to see how much each company invested to renovate each vs. end price. My guess is one company is more than happy with the price they got. And the other, maybe not so much. The world will never know.

    • Which leads me to ask this question: Thought I know there are lots of different variables to this- does anyone have any ancedotal evidence of how much it costs to do a full “gut” job on a standard craftsman style rowhouse? Can I safely say that $150K would cover such costs from basement through 2nd floor rehab?

      • cost to you, or cost to a professional real estate investor?

        to you, $150 is waaaay low.

      • Yes, $100-150K is pretty much standard for total gut jobs in DC.

        So the issue is how much the original properties was acquired for. If #1 was acquired for $200K then they are happy. If it was $300K then not at all. #2’s limited reno may be more due to acquisition price than vision for the property. It’d be fun to figure out who got what, for what at the very beginning.

        • The 1st one 5523 showed it was sold in Feb ’12 for 177k. the 2nd one 5527 was sold 6 ’12 for 230k.

        • “100-150k is standard for gut jobs in DC”.

          Pretty uninformed comment for about a thousand reasons. If you’re talking about a true, to the studs gut job, you’re also redoing all plumbing and electrical to bring them up to modern standards, as well as new roof, new flooring, new windows and obviously new kitchen and bathrooms. Maybe it’s possible to do all that for 100-150 in a very tiny house with absolutely no frills or upgrades, but to claim that’s a standard cost throughout DC is pretty silly (plenty of KITCHENS in DC cost 150k to renovate).

          • I don’t know about. I know of a Shaw complete gut job that was done for the owner for 100k on an FHA 203k, that included a 2 bed 2 1/2 ba upper unit and a separate ready-to-be-legal 1 bd/1 ba basement unit. Sure the contractor is now AWOL and the owner has had to get people in to fix a few things here and there (leaky roof that was allegedly new, finish the separation of the electrical, a final inspection or two).
            The owner makes me a little sick with envy because she was able to refinance pretty much as soon as she moved in and her home value had almost doubled.

      • Here’s the thing. For a professional flip company, or a do it yourselfer who has the time and knowledge to serve as her own General Contractor (to the point of hiring and managing day laborers etc), $150 is a reasonable cost for a gut renovation.

        However, if you are a homeowner and need to use an architect and general contractor, $150 is hilariously, comically low.

        So, if you are a homebuyer thinking that you can buy a fixer-upper and gut renovate it for $150, you are categorically wrong.

        Think more like $250 at a bare minimum, and $300+ if you want it to have more flair than the standard flip job. And, after all, if you don’t want it to have more flair than the standard flip job, why not just buy a standard flip job.

        Mark my words, this is the deal.

        • one more point – the reason for this is that you will pay the GC the margin you would have paid the flipper. No such thing as a free lunch.

          • bfinpetworth

            This is the precise reason I bought a high-quality flip rather than doing it myself through a general contractor. Much less stress and in the end, the numbers would end up nearly the same. The one important benefit of doing it yourself is the design control you can exert. But if you’re lucky enough to find a quality flip that suits your taste, then it is a win-win.

  • I am wondering if the second house was gutted… meaning how old are the pipes?

  • I live around the corner from both of these. The first house was certainly done better – the second was sloppy and a big part of why the first contract and the first listing agent backed out. I am positive they didn’t do the pipes and there were no permits whatsoever. The 1st had some water issues in the basement at first but the seller eventually fixed them.

    That being said, we’re neighbors! That block, around Longfellow and up to 1st is an awesome block of people, both longtime residents and newcomers.

  • #1 Bought $177K in Feb ’12. Sold $421K in July ’12. ($177K+$150K=$327K; $421K-$327K=$94K profit) OK profit for 4 months spent.

    #2 Bought $230K June ’12, Sold $427K Dec ’12. ($230K+$150K=$380K; $427K-$380=$47K) Doubt they used $150K for reno, they had $50K less to play with at start. Five months for less than $100K profit, not good.

    This is just fun with numbers, I have no specific knowledge of either house. But you can see why so many small developers still like doing it.

    • Don’t forget the transaction costs. 3% of the final price to the buyer’s agent, plus 1.1% each on the acquisition and purchase prices. So they both likely spent an extra $20K there, plus whatever they’re paying their own agent/lawyer/sales person/whatever.

  • On the first house, I really do not like the mosaic tile part of the shower. Do people consider that neutral? It is such a fine line between keeping things neutral and giving rooms enough character to intrigue buyers (but again, neutral enough so that they can imagine their own touches in the space). Also, do people like the bathroom vanities that look like furniture? I guess I do like the furniture look but I find the idea of having to clean under them or fish a toothpaste cap from under them very unappealing (especially in a room that can get steamy with moist floors). Am I alone in this sentiment?

    • bfinpetworth

      I’m a furniture craftsperson and made a double sink vanity in the style of furniture for my house in Vermont that I renovated myself. It was a fun project – solid ash with several coats of polyurethane on the top to protect from water. I stained the ash black so that the grain would show through the black, even mixed my own black stain. I made the bottom shelf high enough off the floor so that it was easy to clean underneath. We thoroughly enjoyed that vanity for the seven years we lived there.

      • Sounds like a beautiful and functional solution. As a craftsperson I bet you could even put it all the way down to the tile and still make it look like a beautiful piece of furniture. I am envious :-)

    • Nope. I really dislike the bathrooms in the first house. Granted, our house came with builder’s grade flipped bathrooms very similar (without the mosaic tiling). If I had my way, I’d redo them all and make them more classic with white subway tiles, tumbled marble floors and an open style vanity instead of the cabinet. But, that’s just me :)

  • It just goes to show that market fundamentals are what drive prices, not aesthetics. For a given house of a given size in a given condition the price will fluctuate minimally due to the interior finishes. True showpieces like a beautiful mantle, or add-ons like built-ins or a basement bar may drive prices, but those are distinct value-added components of the property. If it shows well you are going to find somebody with matching tastes on either end of the spectrum who will buy it at the market price.

  • anon. gardener

    Normally I would prefer a house like the second house. But. None of the quarter round trim matches the baseboard. I guess they matched it to the floor? Anyway, it all looks horribly wrong. That brick column in the kitchen? Hideous and screaming for paint. And those crappy short kitchen cabinets – seriously? Looks like they had them left over from another job. The carpet in the basement doesn’t look like it was installed well. So even though i hate the ugly duct work in the first house, and the bathroom tile isn’t my cup of tea, I would choose the first house because it is truly move in ready. Too much to do in house number 2.

  • So the lesson is that however much you may subjectively value the “original details” of your house, the market may value them to be much lower.

    Would love to know why #2 thought starting out at $50k more than the house two doors down for just sold for was justified.

  • I was prepared to love the second house and barely glanced at the photos of the first house but then I saw the second house and was disappointed. I don’t like either of those homes.

  • I prefer #2 by far. The first one is big box, Home Depot, soul-sucking, sterile shlock. I so wish these companies that flip would respect the homes that make DC interesting and stop gutting them into vanilla submission. I will say that it looks like house #1’s reno is better executed and house #2 should have painted white woodwork, but there’s no contest for me as to where I’d want to live.

  • “Soulless home depot” sold in Feb 2012 and the “semi renovation with weird kitchen pillar” sold June 2012 – am guessing that:

    1. 4 months makes a big difference considering prices have been rising; if on the market now these houses would be fetching maybe 50k more. It’s odd that these prices now seem low for Petworth;
    2. most buyers [not blog readers] prefer #1 to #2 so had that been sold later than #2 it would have gone for more;
    3. #2 cost a bit less to renovate so the developers didn’t lose out as much.
    The higher original sale price could indicate it was in better condition (less work) or the market was hotter (therefore the selling one will be too, so will get more money in the end).

    And at the end of the day all of these developers have many properties on the go at once, so a $90-100k profit isn’t bad at all.

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