Friday, December 23, 2005

Condos At Gallery Place


$599000 - Gallery Place Metro/China Town ( located in downtown, Washington, DC )

"Santa is brining a gorgeous 2 bedroom, 2 full bath condo to a deserving girl or boy for the low, low price of $599000. A steel for this area! Located on the eight floor, with views of 7th and H st from every window! city living at its best. Enjoy all of the surronding shops and DC`s best restaraunts. Oh by the way the metro is located outside the building. It cant get any better then this call Tom 301-512-8945 with any questions! Have a happy holiday Get in to this unit in early January! Special financing availble! 777 7th"

Craigslist Listing

Google Map

The google map link on the Craigslist site does not even work. The word steal is spelled 'steal.'
Is 599K a 'Low price' for a 2br 2ba condo, 1,100 sq ft? Sure it is a spanking new condo downtown, but it is 600K. The monthly costs ( 30 yr fixes, solid credit, tax deductions, property taxes, amd condo fees) are over $4,000 a month. Yikes. It is a condo. There is a huge amount of newly constructed condo and condo under construction occuring in the city of Washington, DC. Prices are already falling for condo units. A friend of mine owns a 1br condo in DC and is having a real tough time selling, despite having lowered the price twice.

Will it sell at 599K?

The price is inline with other newly constructed 2br 2ba condos in downtown DC for sale. However, there is a condo glut in DC. The inventory for condos is building. The seller better hope for a quick sale otherwise they won't get the 599K.

19 comments:

  1. It looks like in a good location- and is brand new- I saw nothing on sqaure footage- so at 600K you may be getting 1200sq ft.
    Also- as there is now a condo glut that is worsening as each month passes- I doubt that there will be a reduction when the spring season begins 'officially' in 2 weeks. So at 600K it may sound good now- but in a year it could easily be 50-75K less, or even more. AVOID.

    ReplyDelete
  2. 599K for 2 bedrooms? That is INSANITY. If I had 599K I could ge an extremely nice single family house by any metro station in MD/VA. Even with the housing bubble. Gallery Place is nice and central to everything, but if you ask me it is worth an extra 20 minutes in the commute to get more room and not have to pay condo fees, etc.

    I, also, have trouble understanding why people require more bathrooms than bedrooms in their house.

    Debbie

    ReplyDelete
  3. This condo will be purchased by someone who doesn't want a single family home (many, many people chose to buy a condo over a SFH by choice, not because of $), and who doesn't want to live in the suburbs (for obvious reasons), and who decides (wisely in my opnion) that taking on an additional 20 minute commute each way each day is not worth any small gains in sq. footage of living space or having a small patch of grass next to your driveway in Va of Md. I wouldn't pay more than 449k for this condo, but I expect that it will sell soon close to asking price.

    ReplyDelete
  4. Sell soon close to asking price? Perhaps.

    This one makes me giggle because I can actually see the building in question as I type this...and I can see a lot of similary priced units in large, newly constructed buildings with lots of unsold units. We will see...

    Oh, and I do have a question: If I buy this condo, where do I buy groceries? I can walk downstairs to the metro, but I'd hate to have to ride it for a quart of milk. You see, this neighborhood has, until recently, been a commercial one. There are none of the traditional residential amenities here...groceries, dry cleaners, etc. Oh, well, it'll be a great investment, anyway.

    ReplyDelete
  5. This calculation can help tell the future of this little condo (and any others)....
    MOI (Months of Inventory) provides a measure of market balance and is a good helper in understanding, or predicting, marketing results.

    1. Have a Realtor search the MLS for the number of competing active listings, and note the number.
    2. Have the Realtor search the MLS for the number of sold competing listings over the last 180 days.
    3. Divide #active/#sold. Divide result by 2 (because the look back on solds was a half year), then multiply by 12 (months in a year.
    The result is MOI. Market balance point is 6.5 MOI. If your calculation is >6.5 then you are in a Buyer's Market. If <6.5 then you are in a Seller's Market. The greater above or below 6.5, the greater the appreciation (if above) or depreciation (if below).

    Using this condo as an example, if the MOI was, say 11 (=severe Buyer's Market), then the likelyhood of a successful sale at some calulated market value is small. If the pricing has included
    reductions for a slowing market, then the likelyhood is greater. If the example MOI was 2.5, and the condo was properly priced, then there is a high likelyhood for a fast sale near asking price.

    In short, no matter how bad the market balance is, sales are possible at the right price. Using MOI can help set the right price. I use it all of the time - up markets and down - to help set winning pricing strategies.

    ReplyDelete
  6. It's a steal at $600k...if it was in Manhattan.

    Buying a new construction condo in DC with an IO mortgage may have made sense as the condo market boomed in 2004 and early-2005, but it would be financial suicide for 99% of the potential buyers to buy this condo at this price at this time.

    ReplyDelete
  7. CORRECTION: The greater above or below 6.5, the greater the appreciation (if BELOW) or depreciation (if ABOVE).

    ReplyDelete
  8. Resource - how does your formula account for listings expired and then re-listed? There are properties all over my neighborhood that keep coming on and off the market.

    If something shows "12 days on market" in the MLS, but I've seen the "for sale" sign up for three or four months, how do I account for that?

    ReplyDelete
  9. anon 5:02, you gotta be kidding - 599k gets you a single family house by any metro in VA/MD???? Houses next to Rosslyn, Courthouse, Claredon, Ballston metros are around 1m. 1200 sqft 2BR/2ba in Arlington near a metro is just about the same 600k as downtown DC. There's no discount. Arlington is just the alternative location for those new DC workers scared of living in "the city."

    ReplyDelete
  10. Of course I bought a house 1/2 half mile from the Greenbelt metro (in College Park) for $120k in '99.

    ReplyDelete
  11. $545/sq.ft. You can buy a condo directly on the ocean here in central Florida for that.

    ReplyDelete
  12. 1100 Square feet at that price
    AVOID..... in a year 100K lower.

    ReplyDelete
  13. My sister bought a 4 bdrm. house right by Twinbrook metro a few months ago for less than $400K.

    ReplyDelete
  14. I personally wouldn't buy that condo, but then again, there is no such thing as a townhouse that costs the same price and is 20 mins away by car (unless you mean 20 mins away by car at 2:30 in the morning).

    Safeway is coming to that area, as well as a Balducci's. The Gallery Place/Chinatown/Penn Quarter/MCI Center/Archives/Navy Memorial/Mt. Vernon Square Convention Center (should I stop now?) neighborhood will be a great "downtown" area over the next couple of years.

    Still though, at that price, some people can pay the mortgage easily and hang on to it for years (dual income, no kids who want city life).

    To each his own. Different strokes...

    ReplyDelete
  15. That area is fantastic now. It's a great area for young professionals. Of course, 90% of ypung professionals won't be able to afford it. After the loan for the 599K, you need to pay very high DC taxes and probably a substantial condo fee to boot.

    And, of course, 20 years ago, that area was very near the hood.

    599K is outrageous. Let's inject a little realism here. 100K less, or 200K less, is still outrageous. I love the DC area. I'm a long time resident.

    But that area could be near the hood again in 10 years.

    Lower govrenment spending, increased DC area crime, bad DC government, higher interest rates... all these things are in the very real near future for that area, and prices for small condos will drop precipitously.

    It's only hope is that higher oil prices will make it better to live close to city centers.

    ReplyDelete
  16. Dear DC: The MOI formula doesn't really need, or want, days-on-market. An old and tired real estate "trick" is to reset the days on market shown on the MLS, if a property has aged on the market. The beauty of MOI is that it looks only at what is now ACTIVE and what has been SOLD, and only for competing properties. Slight-of-hand tricks simply do not hurt the calculation.

    There may be some slight impact due to statistical aberations from properties being churned, but as long as there are a reasonable number of comparable properties in the ACTIVE and SOLD lists, then the calculation will be reliable. Here, "reasonable" would be to use a comparables criteria that produced a dozen or more comps in each category, ACTIVE and SOLD. In large markets, the comps could number into the range of several dozen. In small markets, it may not be possible to find a dozen true comps, but I feel that it would still be worthwhile to calculate MOI with what you have.

    ReplyDelete
  17. Will somebody tell me how I can get to those townhouses selling for less than 600K from downtown DC in 20 mins??

    It takes 15 mins just to drive to the beltway or to RT 50 from Dupont Circle.

    ReplyDelete
  18. FYI, the condo WAS sold for the asking price. Whoever bought the condo has to be insane (or not very bright, or both). Or maybe the seller's/buyer's agent(s) is(are) good at talking people into making terrible financial decisions!!!

    ReplyDelete