Inside the DC Bubble

The Story
--- Developers of the Grant condo in Logan Circle threw a glitzy party to boost sales. The party with a National player drew attention in the WaPo.
--- Why hold these sales parties? "We're in Washington. People love their events and their black tie and their kind of sassy parties," said Tracy Danneberg, special events coordinator for Metropolis Development. "You have to keep up with it and be different."

Bubble View:
--- Do these parties really sell units? Recently I saw a party for the Beauregard and thought to myself looking at all the cliched buff men dressed in black, this would be a turnoff if I were a buyer. (I think the park expensive cars out front and import beautiful people to enhance the look too.) I thought the first rule of effective sales is: make the client feel comfortable, not feel intimidated.
--- I wonder if the sales staff likes this marketing tool because they want to want to throw a party, not because it improves sales. I want to see the balance sheet not be feed sorbet cocktails. Then again, the second rule of marketing is: sell the sizzle, not the steak, especially when the steak is not the best cut.
--- Third rule: The flashier the party, the lousier the deal.

Link: WaPo

The Story:




Link: Greater Capital Area Assn. of Realtors

The Dish:
--- Condos: Invetory is down. Contracts up over last year. Prices are flat. No bubble bursting. Neither buyers, nor seller have an advantage, but this could turn into a sellers market.
----Single Family Homes: Supply of new homes to the market is down. No real direction in prices, but they are higher than last year. Again no real advantage for buyers or seller.
---Buyers and sellers should remember the Mantra: "A well priced property will move in this market."

Or the old DC for that matter. 22 West ain't cheap and it's not stodgy. Bob Dole would feel out of place. (He would stay put at the Watergate.)


The Story:

Are DC condo prices on the rise? Or is there just more super high-end supply that has masked post-bubble decline in prices? Could be both.

Above are the lockboxes outside of Quincy Court at 1117 10th St NW. Not quite Logan, not quite NOMA. Near the convention center and loads of other condo/lofts. Walkable to downtown. (A transitional 'hood going from abandoned to "upscale," somewhere on the road from dangerous to no man's land.)

The 13 lockboxes look dramatic and suggest the condo bubble is bursting because there are soooo..... many unsold units. So how come the MLS only has six units listed accordning to ZipRealty?

Upon closer inspection two of the six units are list by JP Real Estate Group and another two by condo marketer McWilliams/Ballard Inc. The JP Group website lists yet another unit as well, so seven total. Sounds fishy. What's going on here? How many units are there? Have the realtors forgotten to remove thier lockboxes after a unit sold? Unlikely.

My dear Watson, units being mothballed by the developer!!! Indubitably. Or maybe not. Prices have begun to creep up, but that could be artificially created by developers holding on to units. If I had deep enough pockets that what I would be doing too.

Over at GPLiving they seem to be upset that a planned building at 704 3rd St. NW will feature commercial space only, but no retail, no condos, no apartments.

Considering for how many decades downtown went with virtually only commercial development and considering how much residential it has experienced (along with neighboring hood) of late, DC Bubble has to now respectfully say maybe we have struck a good balance.

Mixing commerical and residential development produces an 18 hour neighborhood. Retail can cater to officeworkers and residents from 7 am until 1 am. Coffee and bagels, lunch and soft goods, dinner and a movie and drinks afterward.

Now please don't construe this post as a criticism GPliving (because we love you to death!!), but we think a mix is better than too much of a good thing like residential development.

Thanks GP for the photo and the effort you put in to get it.

If DC condo buyers replaced the industrial fixtures in their loft condos with mission inspired lighting to go with their arts and crafts inspired furniture, what will the dwellers of the Lacey condo to make it look "traditional." I got it!!! Drape the exposed walkways in mauve velvet!! Put Campari prints over the glass!!

You have to admire Imar Hutchins for breaking the mold. The website brags: "Concrete walls, a solid steel framework, and transparent glass panels combine to create an intriguing 24,000 square foot, 4-story structure complete with an interior atrium. " Feels like Brasilia, circa 1963.

Located at 1100 Florida Ave. NW, next to the Florida Ave. Grill (in fact this used be the grill's parking lot), you have to think that only in an emerging area like the U St. corridor could someone develop something as avant-garde as this 24 unit building. Boldness aside, the building sure does create a bit of a hodgepodge on the street.

Hope they can sell 'em.

After years of delays and bad luck, Roadside Development is getting ready to move ahead with a development at the 8th and O Market, reported WashBiz.

Ground has been broken on the Moderno on U St. Like the other buildings developed by Robertson Development and Lakritz Adler, this condo is very stylish and breaks the mold of DC residential development. This is the kind of high-end residential building that DC was lacking for so long.

Flats. Duplexes and Triplexes with very fancy-shmancy finishes.




Presumably there is no extra charge for the purple prose on the Moderna website. Would the following make you feel better about buying here? "The spare sophistication of the modern furniture displayed at MoMa. The newest styles on the runways of Paris and New York. Even the simple clean lines of a wine glass." Not me.

"The Bad News" On Condos: In Q1 2007, 3,472 condo units that were either in the planning stage or about to come on line in the Washington area were changed to apartments and another 790 were simply canceled, says the WaPo. Sounds like the signs of a healthy market to us because many investors want to own rental units based on the belief that people want to rent in this market.

Need more another sign of health: there were 395 condo contracts in April of 2007 compared with 354 and 434 from the same month in 06 and 07. So April 07 was a good month, not great, not horrific.

We beleive where the bubble is bursting is outside the Beltway, not in DC.

USA Today reported that "Condo sales have propped up residential real estate in the nation's capital this year." This is what DC Bubble has been saying.

While USA Today adds that the median condo price in the District of Columbia in April was $350,000, 4% lower than last year, it fails to note that month-over-month sales have begun to creep back up. For April, the median sales price was $350k, up 2.3 percent since the prior month.

Developers "built a lot of condos in a relatively short period of time," Vanessa de Merode, an agent at Long & Foster, told USA Today. "It slowed the market down. There were larger price adjustments."

The market for single family homes has been more mixed. One of the strongest segments is homes priced from $800,000 to $900,000, said USA Today.

See where that SUV is parked? It's yours for 25K.

Right smack in the middle of Columbia Heights at 14th and Euclid. Way back in the early 1990's you probably could have had a very nice apartment in that same neighbor for that same price.

Makes one think that the smart move perhaps would have been to invest in parking, not condo. You can't really live on parking space though . . . or can you?

Prices for condos and co-ops in DC have been nudging up this year. We will say it again: prices for condos in DC – not Rockthesda or 703 – are up. The median sales price is $350k, up 2.3 percent since last month.

Sales are up too. In April, there were 395 contracts for condos in DC. That’s an increase of 11.5 percent over the same period last year.

Want more: Inventory is down by 6.3 percent to 1,352 units. Adding to this trend, the number of new units on the market is down 9 percent, with only 640 new units on the market.

Bottom Line: It seems neither buyers, nor sellers, have an advantage, though the balance is tipping toward sellers. See last month's numbers.

source: Greater Capital Area of Realtors

Its been more than a month since we last checked in at the Radius. Back on March 25, there were 11 units for sale at this Logan Circle building at 1300 N St. NW.


Surprise, surprise. On May 19, there still are 11 units for sale, according to Zip Realty. Considering how fast inventory is growing in DC, this is a sure sign that the fall is going to get ugly for sellers.

Then again, this strip in Logan Circle is quite a nice neighborhood with bars, restaurants and tons of shopping just a few blocks away. Owners who have not overextended themselves can rent their apartments and wait out the glut, some would get positive cash flow and others not. Either way to our mind, if you have rentable property, the best strategy at this point is to rent, not to sell.