“who is this for? Some foreign potentate’s children studying at Georgetown Law? Are Russian oligarchs running out of Manhattan and London apartments to buy up?”


“Dear PoPville,

This corner (5th and Q) used to belong to a house with an attached, street-facing garage — a major rarity in the area. (it also used to be the epicenter of a local gang turf war! fun facts!) The developers originally won permission to build 8 units, as I recall, but instead built 4 luxury spaces — and, as you can see, are trying to sell them for nearly $1.5 million each! Ed. Note: You can see a virtual tour here.

I guess my question is: who is this for? Some foreign potentate’s children studying at Georgetown Law? Are Russian oligarchs running out of Manhattan and London apartments to buy up? Is there a market, in Shaw, for apartment-homes that cost this much? The list price has many of us in the neighborhood scratching our heads.”

April 2015

108 Comment

  • Income inequality reveals itself most readily in residential real estate.

  • The corner unit has already sold for 1.5 mil, so yes there is a market for this. I don’t think these fall into the apartment category, they are townhomes with in law suites and underground parking. There is not much like it in the neighborhood, but there have been comps selling for well over 1 mil (row homes with basement rentals), so I don’t think it is that far fetched.

  • It looks to me like it’s really designed for eight units, with each property for sale having two units in it. I think the idea would be to buy the property then rent out the bottom part or use it as an in-law suite. Ditto has had some innovative/unusual properties like this in the past, such as the Oslo.
    I realize that doesn’t fully answer the OP’s question, but I think it does speak somewhat to the question of how a place like this could be somewhat affordable.

  • The answer to your last question is clearly “yes”, because Unit A went under contract (list was $1.58 million) before the properties were even listed. The homes came out nicely, with very few exceptions (e.g., downstairs bedrooms in Units B and C aren’t really separate). Overall, very tastefully done. Only downside is that we lost the bocce ball court that was on that lot previously….

    • What do you mean about the bedrooms not really being separate?

      • Can’t exclude them from the main portion, right?

      • By that, I mean they aren’t separate units. There is no door that shuts off the downstairs from the upper floors. So in that sense, Units C and D are much more 4BR, single-family townhomes than Unit A, whose lower level bedroom could be rented out as a separate unit.

        • i’d be really, really surprised if people are buying $1.5M brand new luxury houses like this and looking to rent part of them back out when there are plenty of smaller and cheaper options with similar finishes available. These spaces are clearly for guests, au pairs, in-laws in town, etc.

  • Looks like 4 bedrooms each? Isn’t that what people are demanding, rather than 1 and 2 bedroom condos?

  • We went to the open house because we’re neighbors…the in-law suites have dishwashers but not ovens, which seems like a really weird choice.

    But as somewhat recent buyers in the neighborhood, I wouldn’t mind if they all go for asking…

    • we use our dishwasher nightly and our oven monthly, so it makes sense to me.

    • Blithe

      It is odd, but I use my dishwasher regularly and my oven rarely — so I can get that an oven for many of us is kind of aspirational.

    • Blithe

      Is that one of those elements that allows it to be designated as an “in-law-suite”vs a separate apartment? As in, was the oven left out, while other amenities were not for some sort of real estate-related reason?

    • I’ve heard of this before. The oven would make it a kitchen, which would make the space a separate unit, which would require a C of O. I’ve heard flippers doing a hook up for an oven but not actually installing one to avoid having to go through that process.

  • nightborn

    There’s clearly a market for this, or $1M++ Logan/Dupont townhomes would not be selling in a matter of days. And Shaw is a great neighborhood. No idea where people get this money, but it’s certainly out there.

    • I don’t think this is out of reach for many DINK households in DC. Each person would be paying around $2850/month, or less if they rent out the in-law suite and/or garage. It’s a lot of money to come up with every month, for sure, but you don’t have to be a Russian oligarch to afford it.

      • nightborn

        True. I guess on a corporate lawyer’s salary it would be doable, for example. Or if the buyer has family assistance on a good down payment.

        • Maybe two corporate lawyers. As a corporate lawyer, I can promise you my salary alone isn’t paying for that. Maybe if I had paid off law school and had no debt there, it would get a little closer, but yeah, this is for a two income lawyer family.

        • people, there is a lot of wealth in DC already – this isn’t news and there are more people than ?russian oligarchs? (if those exist) or lawyers who make money. Also, there would never be 8 units, the zoning doesn’t come close to allowing it and variance wouldn’t get approved.

          • +1. Million dollar cash offers are very common in DC. There is plenty of money for multi-million properties. A couple making $250K can easily afford this. There are many, many such couples out there.

        • Inheritance, making money in a different city, older people who sold their prior home and still make good incomes…there are plenty of people who can afford this, and there are lots of people out there that aren’t thinking of the cost in terms of the monthly mortgage payment as a % of their income.

      • Yeah, we have a set up like this–we bought a 5 bedroom house with my inlaws, they pay half, we pay half. Cost a 1.3 million total, so our half was 600k, which really isn’t bad for DC prices. Great deal if you like your in laws!

    • parents and (formerly) swiss bank accounts

  • $1.5 mill for a four bedroom isn’t terrible. It’s technically an apartment but pretty darn big and the HOAs are pretty low. And Shaw might be “transitioning” but it’s pretty centrally located and has a lot of great amenities, so I’m not surprised.

    • Yeah, I could never afford these places. But, DC real estate really doesn’t have many eye popping +10-20 mil expensive places like NYC, Lon, SF, etc.

  • $1m+ homes in DC? I’m shocked! Although I will never be able to afford these places, and although I too scratch my head about how many people can afford stuff like this, I”m glad these condos were built. Now four families can live on this lot instead of just one.

    There are lots of rich people around here. Many of them now live in “non-luxury” housing. If building more luxury housing means that rich people stop buying up regular old row houses, that leaves more of those houses for the rest of us.

    For those who are skeptical that the construction of luxury housing positively impacts us mere plebiscites, I will remind you that rents have gone down in the past year.

  • This might make sense if it were in a different neighborhood, just steps away from high-end amenities. Though I’ve always thought that was a very pretty section of Shaw, or whatever the realtors have got you calling it these days.

  • People who complain about pop-up conversions done “on the cheap” take note: this is an example of the “spare no expense” development that results in a very high asking price.

    • nightborn

      Actually high end finishes are not a guarantee of quality construction… some friends of mine bought an incredible place with great finishes (marble, expensive cherry floors, high end appliances, etc.) in Columbia Heights last year and have had a number of issues with the roof deck, leaks, electric, you name it. And their place was not a gut job, it was completely torn down and rebuilt! And of course the LLC that did their place has since dissolved…

      • This is so true by the way. A lot of new construction from the ground up is often shoddily done. A lot of fly by night builders who often are doing this first and only project. It’s why it’s so important to do due diligence when buying new. We were under contract for new construction that was gorgeous – fortunately the night before our inspection, there was a bad rain storm. The roof of the bedroom caved in as we were doing the walk through. Needless to say, we pulled out of the deal minutes later. It was literally a sign from above…

    • A high asking price, and a high profit. There’s nothing inherently expensive about this place beyond the land price and some of the designer fixtures (door knobs and kitchen/bathroom).

      • Ditto is a reputable firm and does great work. I wouldn’t expect any of this to be shoddy. You get what you pay for. I agree many flips I’m DC are crap, but look who is behind the work.

  • supply and demand. these guys are meeting the demand for 3-4 bedroom condos, of which there aren’t many in the city, as all new building skews towards 1 and 2 bedroom condos because that’s the low hanging fruit that’s most profitable.

    No need to point the finger abroad. It’s our own city’s zoning restrictions that have driven the prices so high by artificially restricting supply.

  • Some stupid design choices (Jack and Jill bedrooms should have a bath tub, for example).

    For that price, I’d just buy a house.

  • Sigh… believe it or not, there are a lot of two-earner households in this area where each person is earning upwards of $100k. The enormous concentration of law firms in D.C. is a big factor there, though by no means the only one. Also – perhaps the readership of this blog skews fairly young, but a lot of commenters seem to forget that just because one is spending $1.5M for a house does not mean one has a household income of $400k per year (or whatever it would take to qualify for a $1.2M mortgage). Chances are these are mid-career people who have a substantial amount of equity due to many years of home ownership (think of people who bought around Eastern Market 10-15 years ago). Their mortgage payment may not be much higher than the people spending $500k on a starter home in Trinidad.
    And yes, there are oligarchs from various countries buying RE in large U.S. markets. All of this is to say that there’s clearly plenty of demand for these units.

    • The growing cyber security field is another one. It’s not unusual for a kid right out of college to be making over $100k doing that.

    • Not to mention someone who made a lot of money in the DC market – say buying a house in 2000 and reselling it today – so could have $500k or $600k to put down, making the house that much more affordable, especially if you rent the basement out.

    • Yeah, a mid career couple with an income of 200-300K and 500K in home equity in their current home could afford this place without too much trouble.

      Hell, a junior partner at a decent sized law firm could make 200-300k alone.

      • I’m not the best at math, but how is an $8,000/mo mortgage (at least) affordable for someone making $200K/year if you’re supposed to be ~40% of debt to income ratio for most lenders? After taxes, someone making $200K/year is only bringing home probably $11K/month. This mortgage is at least $8K I’d guess unless you had a very hefty down payment.

        I do not see how $1.2m homes are easily affordable on $200K/year.

        • A million-dollar mortgage at 4% (PenFed’s current jumbo rate) is just over $4800 per month. If someone has $500k in equity from a previous home sale (and that was Bob’s hypo), it’s easily within reach. Note: I think you’d be nuts to take on that kind of debt at an income level of $300,000 per year – but I’m in the minority on that. Plenty of people do.

          • I clarified that my point was assuming no hefty down payment as Bob suggested (mostly because I don’t know very many people, lawyers or otherwise, who are sitting on half a million in equity and those that do can probably buy something bigger and nicer than this in Chevy Chase). $4800/month before taxes and insurance is pushing it for a $200,000 salary in terms of what you could actually borrow from a lender. I struggled to borrow much less than a million on a $200,000 salary because of debt to income limits (me being a lawyer still paying off the boatload of law school debt).

          • A $200k salary is at least $10k/month in take home pay even assuming some pretty big subtractions for retirement and the like. Even after dropping half of that on a mortgage this hypothetical person has more disposable income than many people in this area live off of to start with. I still wouldn’t do it myself, but it’s not like you’d be broke. The typical thresholds for mortgage payments really don’t apply well at the upper income brackets.

  • I’d totally buy this place if I could afford it–they look really nicely done, and I love that location.

  • I think a neighbor killed himself in that driveway a year or two ago. I remember biking by right after it happened… Sheets were covering it.

  • I’d totally get one, but I worry there’s not enough space for the family, chef, au pair, his/her personal assistants, and armed security.

  • I love these! I’d love to live here and I think the price sounds not bad for 4 lovely bedrooms. We moved from Shaw to a more suburb-y part of DC (for schools) and I miss this location every single day. Sigh.

  • I think you may be out of touch with the market. I saw this earlier today and thought it was a fair price. They are big units in a great neighborhood. I can’t afford one now, but in five years, I should able to get one. By then, my mortgage on the currently valued $600k place should be paid, so this would only be a $900k mortgage, which we could potentially be able to swing as a 30 year product, as we now have a 15 year. By then my kid, who will have spent the first 10 years in our nearby condo might want a little more space. Obviously, there are a lot of factors that could change, but I’m just saying that there is a big market, and it is a much more realistic long-term goal purchase for those of us who have been here a while than the $2.5 million terrace that was posted yesterday.

    • Oh, and I am a GS-14. My spouse makes about 100K. Neither of us expect huge salary bumps.

    • The way RE is going, in 5 years this will cost 2 millions, you will have to look for something else.

      • I would hope that the property that I currently own would also go up. But of course that might not be the case. There are tons of factors at play here, such as whether I really want to have a mortgage at all in five years, interest rates, whether we have unanticipated income/expense, etc. My point is only that this isn’t a completely unrealistic situation for a couple making a decent, but not phenomenal for the area, income.

  • How did a high-end residential development company get named Ditto? How about Carbon Copy. Photocopy. Mimeograph. Fire your branding agency.

  • palisades

    Who cares? If people want to pay for it, let them

  • I would like to know what is up with the new construction million dollar condo 2 block south of these. It’s been on-and-off the market for a year and a half.

    • Folks don’t want to spend a mill here for a partial-basement unit. I’m not at all surprised.

    • It’s also fairly unattractive from the outside in person. The photographs make it look better, but when walking by, I think it looks really odd.. Somehow it really doesn’t fit in with the rest of the block.

    • Yep, living areas in the basement, bedrooms upstairs right below your upstairs neighbors. Not a way I’d want to live at any price.

  • Apparently the building is being razed in April 2015

  • Looking at a price per square foot metric, this is actually low for Shaw. It’s only sticker shock if you ignore how incredibly large it is. Aren’t most listings in Shaw in the $500-600/square foot price range? At least for something fully renovated/brand new?

  • 1.5 really isn’t that bad. And Shaw is a great neighborhood too! Not sure where the OP came from. Some rural square state? You’re not in Kansas anymore!

  • Considering there are 2 bedroom penthouse condos being sold 915k on 5th & U NW, and around 1.3 mil condos on 14th & R. This is actually a great deal. Wouldn’t be surprised if all 4 luxury units are snatched within no time.
    Gotta love trust-fund babies with dual income.

  • Considering there are 2 bedroom penthouse condos being sold for 915k on 5th & U NW, and 1.3 mil condos being sold on 14th & R. This is actually a great deal – considering parking & rooftop terrace.
    Wouldn’t be surprised if all 4 luxury units are snatched up within no time.
    Gotta love trust-fund babies with dual income.

  • Russian oligarchs and foreign potentates would never venture to Shaw for a reasonably priced and sized townhouse when they could purchase an overpriced and undersized condo at City Center.

    And for the authentic oligarch or trustifarian – this is much better http://www.redfin.com/DC/Washington/1055-Wisconsin-AVE-NW-20007/unit-4W/home/62679072

    • Indeed it is! That is some truly excellent house porn, Andy!

      • Apparently the folks that bought it never moved in and are selling it because its too small???
        Mind you that entire building was sold in a few weeks with every unit going for all cash.
        So to answer the question on who is buying in DC – rich mo-fos with some serious ca$h!!

        • This really does have Russian oligarch written all over it. Are you serious or kidding about the buyers thinking its too small?

          • Shwness – I’m serious it was in the GeorgetownMetropolitan.com. Topher has some good sources so I trust him.

            I would kill for that condo – absolutely amazing. Sadly Powerball didn’t work out so I’m not moving anytime soon.

    • Holy Jesus. Those HOA fees!? Do they have someone come rub your feet (or other things) every night when you get home from work? Seriously. That is crazy.

    • That listing is clearly for the “more money than sense” crowd 😉

  • Thinking about buying one, and making part of it an ‘out-law suite’… for me… as I’ll need to start robbing banks to pay the mortgage.

  • Wow- these units are amazing and actually well- priced. The design and layout is very sophisticated- glad these guys decided to build their product in Shaw. Reminds me of a Soho loft or something you would see in NYC. Priced to sell if you look at what it is per square foot. These won’t last.
    Corner unit was the bomb- not surprised it sold first.

  • justinbc

    I’ve never seen a Ditto listing that didn’t out price most of the rest of their nrighborhood, and yet they still seem to be doing business just fine. God forbid other people in the city make more money than you.

Comments are closed.