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GDoN Revisited by Hipchickindc – 1523 Monroe Street, NW

by Prince Of Petworth October 5, 2012 at 11:00 am 6 Comments

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 princeofpetworth.com 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: 1523 Monroe St NW
Legal Subdivision: Columbia Heights
Advertised Subdivision per Listing: Columbia Heights
Original List Price: $690,000.
List Price at Contract: $690,000.
List Date: 05/11/2012
Days on Market: 6
Settled Sales Price: $758,000.
Seller Subsidy: $0.
List to Net Sales Price Ratio: 109.86%
Settlement Date: 09/27/2012
Bank Owned?: No Short Sale? No
Type Of Financing: Conventional
Original GDoN post is: here.
The listing can be seen: here. To see pic, click on the camera icon after opening the link.

Last week’s Good Deal or Not Revisited (GDoN-R) sold at 21.77% above the list price and this week’s escalated nearly 10% over list. Buyers and their agents in many parts of town are certainly feeling the reality of limited inventory and an abundance of other buyers. The low mortgage interest rates making monthly payments so low in relation to sales prices have likely contributed to a larger than typical pool of buyers in higher price ranges.

Consider that the last time this home was on the market in 1999, interest rates were around 6.75% for a 30 year fixed rate mortgage. That is more than double today’s rate of as low as 3.36%. Of course, the net purchase price in 1999 was $152,525.

There have been eleven settled sales of houses within a quarter mile of the subject property since 04/01/2012. The average sold to list price ratio for these homes is 102.15%, which is reflective of multiple offers.

  • When interests rates rise, as they inevitably will, then what? Will buyers such as this one be stuck with a property worth less than it is worth? Beacsue as interest rates rise, prices will fall. I sense another bubble in the making.

  • Sorry — I mean, “worth less than what they paid for it.”

  • CA

    I don’t see that as a large concern in DC. Washington had been undervalued in comparison to its wealthy suburbs in MD/VA and cities similar to its economic demographics. 700k isn’t too far off from what you could expect to find a home in Montgomery, Howard, Arlington, Loudon Counties, etc. in years past. Those who want to maybe have less home and easier commutes now see the city as an option they didn’t see 15 years ago.

  • That doesn’t answer my question though. If prices fall as interest rates rise, then a house such as this (which the post says was bought in part owing to low interest rates) will end up being worth less than the price paid when rates were lower. That is my concern about low rates…. that they inflate prices. That is not unlike what happened a few years ago when “free money” was similarly being offered in the form of interest free mortgages and poof! Prices soared. The cheap money of low interest rates will do the same.

    • While low rates do inflate prices a bit, I think CA’s response does have some merit. The sustained increase in demand for housing in DC will help to mitigate any downward pressure on housing prices as interest rates rise. Whether the future increase in interest rates is enough to drive down prices substantially remains to be seen. One benefit of many of these homes in DC is that there remains high demand for basement apartments and room rentals. Renting a portion of your home provides further protection from a future reduction in home value due to these predicted higher interest rates.

      • CA

        I’m days late in responding, but yes, I believe the demand for property in DC will allow prices to remain where they are even with an increase in interest rates. If this house now sits with modest to no growth in value, even with a possible return to 7% rates, the demand for a house in the limited inventory in the city will allow it to hold its value.

        There are plenty of people and couples who can swing a 700k dollar home with a 7% interest rate in this town–not that I would expect to see rates that high anytime soon–you’re only talking ~4,500k a month.


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