Buyers in the Washington area, accustomed to the lack of available homes and declining affordability in the past few years, are beginning to recognize that widening their scope of potential neighborhoods might be necessary to get a home they want.
“Data is more accessible than ever to buyers today, and they are more sensitive now to what they can afford,” says Meredith Margolis, a real estate agent with Compass in Washington. “Instead of saying ‘I want to live in Upper Northwest,’ they say, ‘Where can I get a three-bedroom single-family house with a basement for $400,000 or $600,000,’ or whatever they need and what their budget is.”
Although many buyers are open to exploring different areas, they still want that community to have value to them.
“The biggest challenge is that almost all buyers want walkability, but the places with the most walkability are also places where inventory is very low,” said Allison Goodhart DuShuttle, a real estate agent with the Goodhart Group at McEnearney Associates in Alexandria. “We try to see if buyers might be okay with being able to walk to certain things, but not everything, such as to a park or a grocery store or a restaurant or two.”
People who telecommute once or twice a week are more willing to expand their search to areas with a less desirable commute, DuShuttle said.
“I always suggest that people test out their commute from a new neighborhood, because it might not be as bad as they think,” she said.
Once buyers identify their priorities and describe what they want in a neighborhood, a real estate agent can often help them find some of those qualities in a community where there are more houses available in their price range. Although the challenge is higher in price ranges under $600,000, for which inventory is particularly limited, buyers with a larger budget can’t always find what they want, either.
Some buyers who want to live in the city end up in nearby suburbs, but others eventually find places within city neighborhoods that may not have been their first choice.
For example, Owen Morrison and his wife, Meredith Langston, who worked with Compass real estate agent Sebastian Courret, searched for 18 months after relocating to the District from Boston. The couple rented in Georgetown, where Langston could walk to her business management consulting office in Dupont Circle.
“We looked in Logan Circle and Shaw and were outbid on a two-bedroom condo in Dupont,” said Morrison, a musician. “We looked at Capitol Hill, too, because our priority is Metro access and living in a walkable area. We were outbid on a townhouse there that sold for $100,000 over the asking price.”
Even with a maximum budget of nearly $900,000, the couple struggled to find a place with the space and neighborhood amenities they prefer, until they found a three-bedroom townhouse in Columbia Heights.
“Our townhouse has a basement that can be rented, which made it even more attractive, since we can use the rent to offset some of our mortgage payment,” Morrison said. “It’s been renovated and is on a block with a mix of renovated and unrenovated rowhouses.”
Prices have been climbing for years in the District for both renovated and unrenovated houses, said Bobby Montagne, chief executive of Walnut Street Finance, a private lender and developer based in Fairfax, Va.
“We started buying in Petworth in 2010 and moved on to Eckington, Edgewood, Brookland and Trinidad, all neighborhoods where values have spiked,” Montagne said. “There really aren’t very many bargains in any of those neighborhoods now.”
Montagne said the neighborhoods with lower prices now that he thinks will appreciate quickly include Deanwood in Northeast and Hillcrest in Southeast.
“About one-fourth of the houses in Deanwood are walkable to the Deanwood Metro station, and the Deanwood recreation center is a nice family-oriented amenity,” Montagne said. “Hillcrest isn’t very walkable, but you can buy a dilapidated detached single-family house there for $250,000 to $300,000, and even renovated houses sell for $500,000 to $600,000.”
Montagne said Petworth still has some houses ripe for renovation, but he admits that it can be hard for home buyers to compete against developers who can pay cash for a property. He said it’s possible to find unrenovated houses in that neighborhood priced in the $500,000s.
“One of the great things about buyers looking at different neighborhoods is the blurring of lines between the four quadrants of the city,” Margolis said. “We’ve seen a major migration to Southeast and Northeast. For example, a lot of buyers are looking to buy around the Potomac Avenue Metro station in Southeast because they’ve been priced out of Capitol Hill.”
Buyers who like the idea of living in the District, downtown Bethesda or even downtown Silver Spring often need to expand the boundaries of their home search.
For example, Margolis worked with a couple who wanted to stay in the District, preferably in the Forest Hills neighborhood, so their three children could attend Deal Middle School and Wilson High School. The couple wanted to be within walking distance of a Metro station yet have a larger home for their growing family. Despite their sizable budget of about $1.8 million, they couldn’t find anything in the city. The family moved to Chevy Chase, Md., in the Somerset Elementary School neighborhood, about a half-mile from the Friendship Heights Metro station.
Buyers with a smaller budget — under $600,000 — are unlikely to find anything in Bethesda or Chevy Chase, particularly not a single-family home, said Antonia Ketabchi, a real estate agent with Redfin brokerage in Rockville.
“There are some cute neighborhoods not far away from Bethesda that are an option, such as near the Twinbrook Metro station,” Ketabchi said. “You can find a fixer-upper in the $300,000s and renovated single-family houses in the $400,000s. These are 1950s-era two-level bungalows with four bedrooms and two bathrooms, most less than a mile from the Metro and from the new Pike & Rose development that has lots of restaurants and shops.”
A few “starter homes” are available in East Bethesda, said Jane Fairweather, a real estate agent with Coldwell Banker Residential Brokerage in Bethesda, but often home buyers lose out on those properties to developers. Otherwise, most Bethesda buyers with a budget of $800,000 must choose a small condo or an older single-family house, she said.
“If you’re willing to give up walkability and drive everywhere, the values in Potomac, especially farther out from Potomac Village, are flat or declining,” Fairweather said. “You can get a large single-family house priced in the $700,000s and $800,000s.”
Buyers looking for a walkable lifestyle might want to look at new suburban developments such as Pike & Rose in North Bethesda or Downtown Crown in Gaithersburg, Fairweather suggested.
“Buyers who already live near close-in Bethesda want to stay there, but people who live farther out in Montgomery County like the access to amenities in these new communities and the better price point,” Fairweather said.
Other options in Montgomery, Ketabchi said, include Kensington, where some single-family houses built in the 1940s and 1950s are priced in the upper $400,000s and low $500,000s. Kensington has a MARC train station, parks and a farmers market. She also recommends Parkwood, a neighborhood adjacent to Rockville Pike, north of Strathmore.
“Parkwood isn’t near a Metro station, but the neighborhood has highly rated schools, a nice community feel and reasonably priced ramblers built in the 1950s,” Ketabchi said.
Buyers who find Montgomery and the District overpriced are increasingly looking at Prince George’s County, said Bryan Waters, a real estate agent with Redfin brokerage in Prince George’s.
“Buyers from the District are especially looking at areas in Hyattsville, Mount Rainier and Riverdale Park, to buy townhouses and single-family houses,” Waters said. “That trend has been happening for the past five years and is now extending toward College Park and Laurel, too. You can find townhouses priced in the $300,000s and $400,000s in walkable communities, which is much more affordable than in the District, Arlington or Montgomery County.”
Waters said buyers willing to take on a renovation can find single-family houses in those same neighborhoods priced in the $300,000s to the mid-$400,000s. Other neighborhoods in Prince George’s with affordable houses include Bowie, where, Waters said, houses with 2,500 to 3,500 square feet are available priced from the $400,000s to the $550,000s. Near Largo, single-family houses are priced in the $500,000s to the $600,000s, and townhouses are priced in the $300,000s, he said.
“Realistically, Prince George’s County is the last affordable county close to D.C.,” Waters said. “There’s been a lot of development in the county in the last few years, so even though we could still use more restaurants, there’s a lot more retail than there used to be.”
Whether they prefer Alexandria or Arlington, buyers in Northern Virginia find heated competition in most walkable neighborhoods.
Rodrigo Ibacache and his wife, Carolyn Ibacache, whose agent is Margolis, own a 700-square-foot, one-bedroom condo in the Court House area of Arlington but want more space now that they are expecting their first baby.
“We wanted to move to the District and looked at Hill East, Trinidad, Eckington and Bloomingdale, but it was impossible to find something in our price range of $600,000,” Rodrigo said. “Nationally, that’s a high budget, but around here, that’s too low.”
The couple looked for a rowhouse with a separate basement they could rent to offset their mortgage and raise their price to the upper $600,000s but were still unable to find a place to buy.
“We looked near Old Town Alexandria, the Mosaic District and Del Ray because we like those areas, but they were all too expensive,” Rodrigo said. “Now we’re looking in South Arlington, because even though it doesn’t have a Metro station, it has good bus service to Ballston and Court House, and there’s some development planned that will make it better.”
The couple are debating whether to make an offer on a rowhouse with a basement and a back yard priced at $487,000. Although the three-bedroom, two-bathroom house is below their budget, it needs some renovation.
“People who like Lyon Park and Lyon Village in North Arlington might also like Aurora Hills or Arlington Ridge in South Arlington, which is walkable to Crystal City and offers a good commute into the District,” DuShuttle said. “The average sale price in Lyon Park is $1.086 million right now, compared to $798,000 in Aurora Hills for a detached single-family house.”
DuShuttle said townhouses in Del Ray, an Alexandria neighborhood popular for its walkability, average $606,000 for 1,000 square feet. Buyers can find similar townhouses in Warwick Village, which is walkable to Del Ray, for $553,000; for $411,000 in Jefferson Manor near the Huntington Metro station; and for $343,000 in Wakefield in the city of Alexandria, DuShuttle said.
“The Alexandria section of Fairfax County is usually a lot less expensive than the city of Alexandria because it’s outside the Beltway and the commute is longer,” DuShuttle said. “There aren’t as many bus lines, and you’re not as close to the King Street and Braddock Metro stations. But the houses are a little newer, the streets are tree-lined, and it’s a little quieter. Plus, you pay about $150,000 less for single-family house.”
DuShuttle said a few of her clients made an even bigger switch from Alexandria to the Aldie area of Loudoun County, particularly to the Willowsford development.
“It’s a completely different lifestyle, but several of these buyers wanted a bigger house and were willing to accept a longer commute to get it,” DuShuttle said.
Today’s buyers know that even with a big budget, you can’t always get what you want. Being open to a wider variety of neighborhoods, though, means you might be able to get what you need.