GDoN Revisited by Hipchickindc – $50k below asking in Brightwood

6445-Luzon-Avenue-Northwest-e1432293738248

Hipchickindc (aka Suzanne Des Marais) is an associate broker with Bediz Group, LLC at Keller Williams Capital Properties . 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: 6445 Luzon Ave NW #205
Legal Subdivision: Brightwood
Advertised Subdivision per Listing: Brightwood
Bedrooms: 2 Baths: 1 Parking: Street Ownership: Cooperative Square Footage per listing: 1000
Monthly fee: $826.31 includes utilities (electric, heating/air conditioning), may include real estate taxes and underlying mortgage due to cooperative ownership structure

Original List Price
: $205,000.
List Price at Contract: $205,000.
List Date: 05/16/2015
Days on Market for this listing: 195
Settled Sales Price: $150,000.
Seller Subsidy: 0
Settled price per square foot: $150.
Settlement Date: 12/14/2015
Transaction type: Standard

Original GDoN post is: here.

The original listing can be seen here: here.

In 2015 to date, there have been a total of 501 units in cooperatively owned buildings transferred in DC, so District residents are no strangers to this form of property ownership. Generally, the experience of owning in a co-op building is similar to owning in a condominium. The primary difference is that technically, each individual co-op owner holds claim to a portion of an entity that collectively owns the building.

In cooperatively owned buildings, real estate taxes are assessed on the building as a whole. This is why it is not unusual to see higher monthly fees on a co-op, since property taxes are often paid through the fee. (In a condo with a mortgage, property taxes are typically paid as part of the monthly payment that goes to the bank and the bank pays the real estate taxes when due.)

In considering the value of co-op units, real estate appraisers compare recent past sales of other cooperatively owned units (as opposed to including condo ownership units as comparisons). In many parts of the city, condos and co-ops are similarly priced. Downtown units generally fall in the $400 to $600 per square foot range, depending on size and condition (larger units tend to have lower pricing per square foot). High end new construction units in prime areas can easily price $700 per square foot and beyond, and are more likely to be condo ownership.

The co-op community that the subject property is part of is located near Rock Creek Park in Northwest DC, above Missouri Ave and to the west of Georgia Avenue. Co-op comparable sales in the immediate area tend to fall into much lower price points than units available further south. There are currently four active listings from $175,000. and below.

The listing agent for this sale was Walt Johnson with Long and Foster Real Estate, Inc. Mo Ababiya, also with Long and Foster Real Estate, Inc. represented the buyer in this transaction.

14 Comment

  • HaileUnlikely

    1. The note makes no sense. The stated fee includes property taxes by definition, because in the eyes of the government, this is a single property owned by a corporation, not a bunch of individual properties owned by individual people. There exists no mechanism by which the DC government could tax an individual “owner” of a “unit” in a cooperative directly. That’s just not how it works.
    .
    2. This specific co-op is the co-op that soured me on co-ops. I have lived in this neighborhood for 12 years, like it a lot, and now own a house not far away, but a few years ago, before I ended up buying my house, I almost bought a unit in this building for waaaay less than this. However, it became evident to me that the board didn’t have a firm handle on the finances of the place and was in the process of digging itself into a deep hole. I suppose that it is possible that they could have turned things around by now, but in the absence of evidence to the contrary, I would not bet on it.

    • Don’t they just need to remove the word “often” and it would make complete sense in the “since property taxes are often paid through the fee” sentence?

      • How come my comments are always awaiting moderation of late? Did I rile someone up or something, PoP?

        • Prince Of Petworth

          I have too much free time. j/k sometimes it’s from shared IP addresses – sometimes I don’t know. Like why did your first comment go into moderation but this comment asking why not go to moderation? I have no freaking idea. I hate IT. It’s like getting my car fixed – a complete and total mystery.

          • PoP, her first comment contained a keyword (the one we were discussing the other day) that causes posts to go into moderation, even though apparently it’s not a word you ever asked your IT people to set as a moderation keyword.

          • Prince Of Petworth

            That is so weird I’ve checked so many times and it’s nowhere to be found. This is a really odd glitch. I’ll ask again.

    • “There exists no mechanism by which the DC government could tax an individual “owner” of a “unit” in a cooperative directly. That’s just not how it works.”
      .
      Do you not have to pay transfer tax on a co-op in DC? I know you do in NYC, and that is just one of the many ways localities can tax individual co-op ownership.
      .
      Also, If you are thinking long term, then boards can be changed and finances can be righted. It is just a different type of fixer-upper. You have to look at the floorplan and windows, not the fixtures, paint, board.

      • HaileUnlikely

        My point was that the listing implied some uncertainty regarding whether the buyer would be owe property taxes on top of the maintenance fee or whether the maintenance fee includes the property taxes. The maintenance fee always includes the owner’s share of the property taxes, because the entity upon which DC levies property taxes is the owner of the property, which is the cooperative as a whole, not the “owner” of an individual unit. The “owners” of individual units in coops do not own property in the eyes of the government and thus do not receive a property tax bill.

  • Co-ops command much lower prices than condos. One major factor is that most if not all co-ops tremendously restrict the conditions under which an owner can rent out the unit or forbid it altogether. That means an owner is totally screwed if they find themselves in a position where they can’t continue making payments and can’t sell it. Because investors aren’t interested, there is also less demand, thus making them more difficult to sell.

    • I don’t think that’s true across the board. When I was looking to buy my first place in DC, I looked at coops and condos alike and found them to be comparably priced. What I liked about the coop was that (1) the taxes were significantly lower because the building was taxed as a whole rather than by individual unit; (2) financing was a breeze because the rental policy capped rentals below the 50% investor-owner rate that causes banks to freak (in 2008-2010, I had friends who couldn’t buy into or sell some amazing condos on U Street because no one would finance them because of the high renter to owner-occupied ratio); and (3) because my coop had an underlying mortgage that reduced the amount I needed from the bank, I was able to take a smaller loan, which made me feel better about my credit situation in the event I needed to finance another major purchase (I didn’t, but that piece of mind was worth something to me, especially because I was single at the time).

      • ” financing was a breeze because the rental policy capped rentals below the 50% investor-owner rate that causes banks to freak (in 2008-2010, I had friends who couldn’t buy into or sell some amazing condos on U Street because no one would finance them because of the high renter to owner-occupied ratio)”
        .
        This. I currently own an investment condo and live in a co-op. Wouldn’t have it any other way. They have much better control over the building. It makes transactions longer and turning it into a rental property nearly impossible, but it is worth it if you want a a stable building to live in.

      • *peace. How did I not see that before?

  • HaileUnlikely

    It said “may include real estate taxes and underlying mortgage due to cooperative ownership structure.” It certainly includes real estate taxes, no “may,” nothing to wonder about here. It may also include an underlying mortgage, and in this case I can tell you that it definitely does.

Comments are closed.