FABULOUS NEW PRICE. Sunny, renov. corner apartment listed at NEW LOW PRICE to sell quickly. Almost 1000 sq ft w/ old world charm and fabulous light. Great roof deck, front desk, near metro. No pets. Seller will pay one year's condo fee.
What, you may ask, is this fabulous new low price?
CURRENT LISTING PRICE HISTORY |
|||
|---|---|---|---|
| Date | Price | % Change | Days at Price |
| 5/15/2009 | $499,000 | |
26 |
| 6/10/2009 | $495,000 | -0.8% | |
That's right--they've dropped the price almost 1%. Perhaps you did not want this house at $499,000. But now that it is $495,000 how can you resist acquiring two small bedrooms and a bathroom on an okay block? Assuming a 10% downpayment and a 30-year mortgage at a 7% fixed annual rate, you could save nearly a dollar a day--almost the price of a cup of coffee (if you are not picky about where you buy your coffee)--off of your roughly $3,000 monthly payment.
Snarking aside, check out what the buyers paid for the place in 2005:
| 10/4/2005 | $460,000 | -$5,000 | $455,000 |
They bought near the height of the bubble. Yet they think their house has appreciated by nearly 10% in the intervening four years. Maybe they did a hell of a renovation, but usually buyers who have extensively renovated advertise that fact. And they're not in a gentrifying neighborhood--Kalorama gentrified decades ago.
People's expectations still have pretty substantial price increases baked in. Until people let go of the assumption that offering a mere 2.5% annual profit from the market's peak is a real bargain, prices will not have bottomed.
Denial is not just a river in Egypt...
Good analysis. Too many sellers forget that information about their homes is more transparent now. The days of secretive realtors who hinted at "motivated sellers" is going, going, gone....
Is the offer to pay condo fees new also? That could be 3-4 thousand as well and directly in your pocket the first year. When we bought our house last month it wasn't the price drop that got us, it was the offer of cash at signing.
Maybe the seller isn't very motivated, what are other units in the bldg going for?
Brian
The situation in Kalorama is being repeated in many DC and other major US city zip codes...sellers clinging to unrealistic prices based on cost of acquisition and maintenance rather than the market. After a frustrating six month search in DC (in which offers made on properties sitting for 6 -9 months without a single bid were ignored or countered with asking price), I gave up and went to Alexandria, VA. DC prices are still too high based on the current market and valuation trends, poor quality of city services and schools and high crime rates.
Real estate markets vary tremendously by location. DC is doing well because the government is expanding (and probably will continue to do so for the next umpteen years). In many, many other locations in the USA, there are tremendous deals to be had in real estate. It isn't mathematically sound to extrapolate about the nation wide bubble on the basis of one unusual local market.
Since you are a blogger, don't you have considerable freedom on where you live? Why would anyone live in DC who doesn't have to live there?
@Steve Koch - "Blogger" isn't a job title. As a former freelance writer, I wish it were. :) I don't know what Megan's other sources of income are, but chances are that she needs to be in or very close to one of the Centers of the Empire (expensive cities -- NY, DC, SF) to cultivate gigs that have Atlantic-level prestige.