Tuesday, April 04, 2006

Mica Condos Update

The Mica Condos are a condo conversion project located in downtown Silver Spring, MD [suburban Washington]. The building used to be called Springwood Apartments.

Prices for remaining units.
Click on image for larger version.


Here is some more information on the Mica Condos:
  • There are 140 units in the building.
  • 82 of them have sold so far [as of 4/1/06].
  • There are 17 studios in the building. All have sold for prices in the very low 200's.
  • 10K for a surface parking spot. 20K for Garage Spot. Free spot for 2br/2ba, amd 3Br units. Monthly Parking Fees Apply
  • Free 42' Plasma TV and 1 Yr Free Cable
  • Condo Fees per month: Studios $240 a month, 1BR $390, 2br/1ba $459, 2br/2ba $645, 3br 2.5ba $716. Includes "Electric, Natural Gas, Water & Sewer, Pool,, Club Room w/ Billboards, Media Center, Fitness Center, Common Area Maintenance, On-Site Management, Reserves, Master Insurance Policy, Snow & Trash Removal"
  • Realtor Agents 3%
  • The sales people are pushing Interest Only ARMs 3yr, 5yr, 7yr or 10yr. There are only three companies that can do the loans George Mason, CountryWide and Wells Fargo.
Previous Posts:

39 comments:

  1. David -- did you notice on the postcard that you scanned in that prices were originally advertised as being from the 290s (presumably for studios) to the upper 900s. It looks like the pricing ended up actually being from the low 200s to the low 600s. That's about 20-30% lower that what they seemed to be aiming for originally (even more when you factor in incentives). Even with this revised pricing, I'm still surprised that 82 people have bought into this 60s era highrise with high condo fees.

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  2. john,

    I did notice that. :-) I was actually going to post about it tommorow. Smart readers I have.

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  3. I don't know that I'm too smart. Truthfully, I had gotten the same postcard as you in the mail, and I was struck by how high the prices on the card were compared to what's in the MLS. It's very nice to see your data to provide confirmaton of what I expected.

    In other Silver Spring bubble news, the 8045 Newell condo (newly built condos, only a six-story building) apparently has 27 lockboxes on its front fence. The MLS is flooded with listings from it.

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  4. I rent in Silver Spring. You are better off renting a one-bedroom for $1,200 per month than buying a condo.

    I should snoop around the SS and see what condos are available. I doubt I can afford any of them anyway.

    btw...Sales agents pushing interest-only ARMs like heroin dealers on a street corner really bothers me.

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  5. http://www.washingtonpost.com/wp-dyn/content/article/2006/04/02/AR2006040201253.html

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  6. anon,

    what article? it got cutoff.

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  7. I also rent in downtown Silver Spring. I got a 1 bedroom for $1138 Month (better than a studio)
    free parking, all utilities, fitness center, tennis courts, swimming pool, snow and trash removal. However I didn't get any plasma TVs but the money I am saving I can buy my own, along with a 10 day cruise and other goodies. The best part is if I have to relocate, I want have to suffer a massive financial loss.

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  8. The Washington Post article linked above is about how police found large quantities of chemicals used to produce meth and a date rape drug in a tonwhouse in a new Wheaton development (I had seen the story on the local news, but it's nice to know the details).

    As the article notes, this was in a new townhouse community in Wheeaton. The article says that they are half-million-dollar townhomes, but that's incorrect. Investors have flooded the MLS with about 10 of these townhouses (I think there are only 50-70 in the entire development), and they're asking $600K-$700K (plus about $85/month for HOA fees) for about 1600 square feet of living space.

    As if spending $600K-$700K wasn't already ridiculous enough, now you have the added bonus of living next to really sketchy neighbors.

    One last note on these townhomes -- the Washington Post did an article on them when they were first built because, as it turns out, the two-car garages that were advertised during pre-construction can really only fit two cars if you don't actually need any space to get out of the car. Apparently, the owners were out of luck, though, as the measurements given on pre-construction drawings were completely accurate -- none of them had bothered to take note of how small the garage would actually be.

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  9. As for Mica, I wonder how much the price drops are real. Have parking spaces always cost extra? What other things are they charging for that they didn't before?

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  10. I went to an open house for this in Feb. The units are nice but the exterior of the building is a huge drawback, as well as the condo fees, which were actually higher than some of the brand new ``luxury'' buildings I've viewed in downtown DC. Also the prices they were quoting back then were about the same as what you posted today and the parking spaces were sold separately. Overall I don't think this building will do well until they offer a steep drop in the sales price -- $20 to $40 grand at least off the higher end units. Given the location and the outdated architecture, Mica really isn't offering much of bargain over what you can get in central part of DC. A little more square footage, but that's it.

    --shelley

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  11. I rent in Silver Spring. It's great there. I would never pay that much though. Rents are a far better deal, in my opinion.

    A Redskins fan

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  12. I don't think that gentrification is happening very quickly in Silver Spring, and it might not happen at all. I went to SS on Friday with my wife and my sister and brother in law. We saw The Inside Man at the Majestic Theater and ate a quick dinner at Chipotle. We saw a 7:30 show and got out around 9:30 or so. When we came out of the theater there were hundreds of people (mostly african-american teenagers) hanging around in the pedestrian walkway and on the sidewalks. A fight started. 2 girls. All these kids ran over to watch the fight! Hundreds of people were watching and cheering, etc. Not one person attempted to break up the fight, even at the very beginning of it which could have been successful. It became a serious mob seen where the 4 of us were concerned for our safety and the safety of others. I tried to call the cops, but got a recording! And this was in Montgomery County. The cops came and their sirens went and all these kids (that were only guilty of watching a fight) ran for it. It was scary to see a mob close up in action. I have yet to see this kind of thing happen in Bethesda or Adams Morgan or Potomac or Chevy Chase (where I did see a fight on St. Patty's day at 4 Provinces which was dealt with quickly and stopped. And the people in the bar all only wanted to stop the fight, not cheer it on.)

    This makes me think twice about going to Silver Spring again and would really make me think twice about spending $290k for a efficiency.

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  13. Another SS renter here. Correct me if I'm wrong, but those (amazing!) condo fees are just today's rates, no? It's unlikely they're gonna go anywhere but up, correct? So you get all the liabilities of ownership, combined with the apartment dweller's vulnerability to rising rents -- rents rising from a floor that's already really high. I don't see the logic in buying one of those condos at all. In what sense can one ever actually "own" the thing?
    -- sglover

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  14. "Correct me if I'm wrong, but those (amazing!) condo fees are just today's rates, no? "

    Correct. They will go up.

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  15. The anon poster who saw the fight in SilSpr is partly correct. Gentrification is certainly NOT guaranteed. I don't know if they passed out a lot of tax breaks to get all those businesses there, but what they also seemed to have done is dramatically increase security. Still, there could come a point where security is stretched, budgets are tight, and the problems keep getting worse.

    In the meantime, it is very nice right now. Houses and condos are priced as if the experiment will definitely succeed, so there is no cost to renting. If the experiment does succeed, I can probably buy in later at the same price, if I want (I doubt prices can go higher). If it doesn't succeed, then I can leave whenever I want.

    Also, I'm not sure how close the Mica is to all the recent renovations.

    A Redskins fan

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  16. Also, a question. When you buy a condo in an old building, let's say the building needed a lot of repairs. (The old apartment building I rent in has needed many repairs over the last few years). Who pays for these?

    A Redskins fan

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  17. Anonymous
    This (2 girls fighting and hundred spectators) makes me think twice about going to Silver Spring again and would really make me think twice about spending $290k for a efficiency.

    Even if downtown silver spring was Utopia I'm still not dishing "Upper $200's" for 819 square foot studio condo.
    However I would be willing to pay $100K for this studio condo if Silver Spring was Utopia.

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  18. "When you buy a condo in an old building, let's say the building needed a lot of repairs. (The old apartment building I rent in has needed many repairs over the last few years). Who pays for these?"

    This is anecdotal, but from what I've seen, the answer is: You, the lucky "owner"! The significant other of a friend of mine owns a condo in Georgetown. Everybody in it got to pony up $20,000 for roof repairs. My understanding is that usually a portion of the condo fees are diverted to this sort of contingency, or at least insurance. But apparently these sorts of nightmares can happen.
    -- sglover

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  19. So there was a fight outside of a movie theater. Were you robbed? Did you get carjacked? C'mon, Silver Spring has a safe community. It sounds like you are a Bethesda snob making judgments about African Americans.

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  20. This (2 girls fighting and hundred spectators) makes me think twice about going to Silver Spring again and would really make me think twice about spending $290k for a efficiency.

    Well.... Let's not get carried away. I live about three blocks from the new glitz district. For a while, in the 90's, I lived in what would become the glitz district, in an apartment on Ellsworth. Back in those days, crime and street drunks were a real problem. For instance, there was a fatal knifing in the apartment next to mine; I got to play courtroom witness for the episode. I see none of that now. I think this recent Friday night brawl is noteworthy because it's so unusual. And incidents like this happen every now and then at many places -- malls, nightlife districts, movie theaters -- that attract big crowds.
    -- sglover

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  21. Downtown Silver Spring is not as safe as Bethesda but its safer then Adams Morgan or U St corridor.

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  22. Redskins Fan,

    The owners pay for general repairs, from the condo fees. If the fees are not enough to cover the costs, fees get raised. This happened to me when I owned a condo in Alexandria a year ago...one of the buildings began *sinking*; to pay for the repairs, our fees almost doubled.

    Thank god I sold and moved to NM.

    Christy in ABQ

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  23. Is there any protection in condo agreements at all against the association deciding to double or triple the fee? This just seems incredibly dangerous for people who own condos, most of whom are not wealthy.

    And if an assessment comes along that, for instance, they need to repair the roof, can they just come to everyone and say give us $20K. That seems impossible for most people.

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  24. SS is a dump. It will never be Bethesda, which will never be Potomac, which will never be Mass Avenue Heights, which will never be...

    Jerkstore

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  25. It is extremely useful to find details and insight like this on specific developments in the NOVA/MD/DC area. Keep up the good work, great blog.

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  26. aeronet_412,

    You are most welcome. I wish there was more information on other developments. :-)

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  27. Thanks for all the answers to my question.

    SilSpr is not a dump, and it wasn't 7 years ago either. However, IMHO it is also not worth shelling out more than 80-100K for a new condo-- and even then, it better be really nice.

    A Redskins fan

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  28. Its amazing how dumb you all are when it comes to the MICA. There are units there in the $900's--A large penthouse. They didnt drop their prices. They are selling great. I bought there and its a great building. Maybe if you went and talked to the agents there you woulkd actually be informed and stop telling people bad information. If its that bad and you think they are over priced why are they selling several every week? Cause its a good buy...look at the comps!

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  29. "Maybe if you went and talked to the agents there you woulkd actually be informed and stop telling people bad information"

    I did. :-)

    "If its that bad and you think they are over priced why are they selling several every week?"

    Lots of people buy overpriced assets. Just look at the Tech Bubble, Tulipmania and the Roaring 20's. Just b/c others are buying does not make it a wise investment

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  30. Apparently you are just bitter and you just cant afford to buy--why else would you be whining and posting misleading and incorrect information? You get off on being a negative person? beating others down? Amazing....why dont you get a life and join the real world buddy. Im sure you are stuck in some rental, piled hiugh with debt and and just too lonely to do anything but spout your negativity to the world. GROW UP!

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  31. I went to visit the MICA, sales people were friendly but as someone noted above.. the risk of condo fees rising significantly has made me shy away from them.

    The buildings are nicely decorated but there are so many NEW condos being built around Silver Spring, I can't see how these units can be a good buy at all.

    In the ideal situation, someone that can afford a $300K-$400K condo would not choose the MICA, especially when you can get a spot in Bethesda that will be guaranteed to appreciate.

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  32. Actually appreciation is pretty gaurenteed in Silver Spring as this is still an up and coming area. Bethesda is too built out. You wanna buy somewhere where there is still room to grow and that would be Silver Spring--look at all what is going on there. There are still about 6 condo buildings coming to the area, prices are going no where but up. Do the math!

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  33. A good question to ask the realtors is 'What are included in the condo fees like utilities -water, heating, air conditioning ?' It is recommended that a condo owner attend the condo association or serve on the board of directors which makes decisions about the condo community. Expenses for roof repairs and other building repairs outside an owner's unit should be covered by a master insurance policy. Make sure one exists and is kept current otherwise the bank or mortgage lender would not be willing to grant a mortgage or can demand full payment of the mortgage at any time.
    A condo owner outside Silver Spring

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  34. Former ResidentJune 06, 2006 11:57 AM

    I was once a former resident of Springwood Apartments (now MICA Condos), and the things McWilliams Ballard put us through in the six months prior to my wife and I finally ridding ourselves of that horrible place are hard to describe. In short, it was like living in a construction site. Elderly residents had no place to sit down in the lobby due to the furniture being removed. The residents had to continually put up with 2-3 day water outages at least twice a month for the better part of three months, and the dust and debris from the construction resulted in respiratory problems for a portion of what was once our community. The building never stunk beforehand, and although admittedly not the nicest place you could imagine, it was fantastic for both its location and friendly atmosphere. Before McWilliams Ballard and MICA Condos bastardized the place in the name of trying to capitalize on the condo boom (which has since gone bust - my wife and I drove by there the other night, and it seems 100% vacant), it was quite a catch amid other high-priced apartments.

    Then the construction began - resulting in plenty of noise, dust, water outages - even an explosion in the lobby! (Thanks to some bumbling contractors hired to do work on the gas lines). All efforts to contact McWilliams Ballard failed, as the woman in charge was always conveniently out of the office, and in fact, the MICA people (who had begun to set up shop during the construction) even left the premises because of all the annoyance caused by the contruction, leaving the remaining residents without recourse.

    And don’t even get me started on Jason, that self-serving ignorant excuse for a man, and the principal contact for people who attended the varied open houses and condo-selling “parties” that MICA set up. What I want to say about him is best left unsaid.

    There are currently multiple lawsuits and complaints filed or being filed against McWilliams Ballard, the contractors, and various other entities involved in the tragedy that is MICA Condominiums.

    Be advised.

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  35. I was a former resident at Springwood too, and think that the developers made a miscalculation and got greedy. If they had offered residents a better deal on a purchase (their best offer was 5% on your unit "as-is", i.e., no deal at all), more residents might have purchased units and there would be fewer units to try to sell in this market slow-down.

    That said, they are performing major renovations on the building, so the above complaints are unfair, because if the model units and the development plans are any indication, this should be a fine building when all is said and done. The shell of the building is solid, unlike some of the cardboard construction I've seen around the neighborhood lately (Silverton and 8045 Newell), and I always loved the spaciousness and layout of my apartment. As far as being 100% vacant, I assume that is because delivery isn't due until later this year.

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  36. Maybe you negative bubble people should do some research. First of all, if you analyze home prices from 1940 on, you'll see ups and downs but overall, home prices ALWAYS rise. This is because, unlike stocks, etc. land is FINITE. Washington DC has the strongest economy of any city in the US and maybe the world. Statistically, we are the riches city in the US. This fact along with the huge influx of immigrants that we are home to indicate that we never experience a bubble. A slowdown is not a bubble. Yes, some people bought high and now some may receive a better price. But in the long run, those who are renting are still throwing their money down the drain. Just in tax savings along, these people will never get anywhere unless they buy. If you have to move out of the area RENT IT OUT. There are over 70,000 jobs coming to the DC/NOVA area in the next five years and believe it or not, there will not be enough housing to support this growth. By 2010 there will be another spike. Think it can't happen? That prices cannot go up any higher? Talk to me after you've seen a few crappy studios in NYC that sell for a cool million. It's called inflation folks.

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  37. Good points, Hoover. Also, I'd much rather buy into a building a few decades old that was built in an era of solid construction, than in the recent friezied climate, where developers are in a hurry to put something up, sell it and move on. The quality of these structures is unbelievably shoddy if you've ever watched one of these go up, and couldn't possibly stand the test of time like some older buildings will, even those that need some maintenance or repair work to bring them up to snuff. Sounds like the developers are doing that at Mica

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  38. ....to bring it up to current standard, that is.

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  39. David, instead of laying the blame at the feet of the sales agent, is it not the developer that is responsible? And I guess, more to the point, are you suggesting that people in Silver Spring can't read the 'fine print' in the ad? With as much inventory as there seems to be right now, none of these lenders is particularly interested in making a loan on a condo that they will end up eating [taking back] when the payments step up. Am I seeing this in some cockeyed manner here? Thanks for a great blog site!

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