“One million dollars!” Dr. Evil triumphantly announces as the ransom fee for a stolen missile in the first Austin Powers movie. He is, of course, ridiculed in the United Nations Secret Conference Room for asking such a low fee. But the way things are going with real estate sales in the Washington region, $1 million may well be the starting point for detached homes, townhomes, and upper-end condos in Northwest Washington, and some of the close-in Maryland and Virginia suburbs.
Housing in this region has always been expensive, and there have always been $1 million+ properties for sale in the areas mentioned above. But the percentage of those properties as a percentage of sold properties has been increasing over the last 3 years (of course, with seasonal spikes and troughs). In June 2012, million-dollar properties accounted for 8.55% of sold properties in the Washington region; by May 2015 that percentage has grown to 11.66% — an increase of 36%. (By comparison, the regional median sold price has grown in the same period by 22%, from $467,500 to $560,000.) Think of it: more than 1 out of every 9 properties sold in the entire region now sells for more than $1 million!
Where are the most expensive sold properties in the District? Not surprisingly, the highest prices are in Georgetown, where the median sold price is over $1 million for attached housing (e.g. townhomes and row houses), and over $2 million for detached (freestanding) homes. Cathedral Heights and American University Park in zip code 20016 are second, with the median sold price for detached homes between $1.1 and $1.5 million over the past year. Townhomes in this zip code are not far behind, at $922,500. Next are Friendship Heights and Chevy Chase in zip code 20015, where detached homes have sold for an average of $1.1 million since the first of this year. The median sold price for townhomes in Dupont/Adams Morgan has been above $1 million for the entire last year (except for July, when it was “only” $924,000). Finally, the median sold price for townhomes in Logan has been over $1 million for seven out of the last 10 months.
What about million-dollar properties in Maryland and Virginia? Chevy Chase has consistently commanded high sold prices. The median sold price for detached homes in Chevy Chase has been close to or above $1 million for the last 10 years. However, the median sold price for detached homes in Bethesda for 1Q2015 was $1.065 million, the highest in 10 years. Detached homes in Old Town Alexandria have averaged $1.06 million for the last year. Median sold prices for detached homes in North Arlington have been brushing up against the $1 million mark for the last year, averaging $931,000.
With salaries not rising as fast as home prices in the region, how can buyers afford a home? If you’re lucky enough to be selling and buying a home in this market, you will benefit from the phenomenal growth of our market over the past 10 years to put a good chunk of your sale equity into a new home so that your monthly mortgage may not rise at all. But if you are moving into this market from another part of the country, or are a first-time buyer, you may have to rely on loans from your retirement accounts or family funds to help you save enough money for a down payment that does not require private mortgage insurance. Thankfully, many lenders are recognizing this need and are offering programs to get people into a home. Consult your local REALTOR for recommendations about reputable lenders, as well as about helping you find a home in neighborhoods where the sold prices may not have risen quite so much as those mentioned here.
Ted Smith is a licensed Realtor with Real Living | at Home specializing in mid-city DC. Reach him at TedSmithSellsDC@rlathome.com and follow him on Facebook, YouTube or @TedSmithSellsDC. You can also join him on monthly tours of mid-city neighborhood open houses, as well as monthly seminars geared toward first-time homebuyers. Sign up at meetup.com/DCMidCity1stTimeHomeBuyers/.