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More D.C.-area homes selling for $1 million

Georgetown, Chevy Chase and more keep rising in value

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Georgetown, gay news, Washington Blade

The highest home prices in the area can be found in D.C.’s Georgetown neighborhood. (Photo by Daniel Lobo; courtesy Wikimedia Commons)

“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.

Happy Hunting!

 

Ted Smith is a licensed Realtor with Real Living | at Home specializing in mid-city DC. Reach him at [email protected] 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/

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Real Estate

Real Estate in 1776

A revolutionary transformation of land ownership laws began centuries ago

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In 1776, the United States was on the brink of a revolutionary transformation in terms of land ownership.

I have been interested in real estate most of my life. Even at age eight, during family vacations when we drove to Nana’s house via old, country roads, I would point to any wood frame house in disrepair and talk about fixing it up. 

It got to be a joke in our family. My father would join in, pointing to every dilapidated barn we passed and saying, “Here’s one you could fix up.”  Little did he know that my childhood interest in real estate would make up a big part of my future.

That’s but a small part of my real estate history, but since I was born on Independence Day, I thought I’d relay a few facts about the real estate world of nearly 250 years ago. Turns out, it’s remarkably similar to today.

In 1776, the United States was on the brink of a revolutionary transformation (as we may also be in 2024), not only politically but also in terms of land ownership and real estate. This era was characterized by a blend of colonial practices, evolving legal frameworks, and a growing sense of independence, having separated ourselves from British rule.

Land ownership then, as now, was a primary source of wealth and status. Its distribution was highly uneven. Most of the land in the Thirteen Colonies was controlled by a small elite class, including wealthy merchants, planters, and colonial governors. 

These large landowners acquired vast tracts of land through royal grants, purchases, and inheritance. Small farmers, artisans, and laborers either owned modest parcels of land, paid to work on rented property, or became indentured servants as immigrants. 

The legal framework governing real estate in 1776 was a combination of English common law, colonial statutes, and local customs. Property rights were well-established, with deeds, surveys, and title records playing crucial roles in documenting and securing land ownership. Colonial courts adjudicated land disputes, often referencing English legal precedents.

The doctrine of primogeniture mandated that a family’s land holdings be passed down to the eldest male heir. This practice ensured the preservation of large estates but also contributed to social stratification and limited opportunities for younger sons and women. However, the revolutionary ideas of liberty and equality began to challenge such entrenched norms, leading to gradual reforms in inheritance laws.

The late 18th century saw a surge in land speculation, driven by the promise of new opportunities in the vast western territories. Wealthy individuals and companies acquired large swaths of land with the intent of selling them to settlers and investors at a profit. This speculative fervor was fueled by the belief that westward expansion would continue unabated, opening new frontiers for agriculture, trade, and settlement.

Land speculation, however, was fraught with risks and controversies much as it remains today. Conflicts with Native American tribes, who rightfully resisted the encroachment on their ancestral lands, were a constant threat. Additionally, disputes over land claims and titles were common, as overlapping grants and fraudulent transactions complicated the already murky legal landscape. 

While rural land dominated the real estate market, urban properties in burgeoning colonial cities like Boston, New York, and Philadelphia also held significant value. These cities were centers of commerce, trade, and political activity, with thriving ports and markets. Real estate in urban areas included residential houses, commercial buildings, warehouses, and wharves.

The design and architecture of colonial urban real estate reflected both practical needs and social aspirations. Wealthy merchants and professionals built grand townhouses, often in the Georgian style, while more modest homes and tenements housed artisans, laborers, and the urban poor. The value of urban properties was closely tied to their location, with prime spots near markets, docks, and government buildings commanding higher prices. (Sound familiar?)

The Revolutionary War marked a pivotal point in American history and had profound implications for real estate. The war disrupted traditional land ownership patterns, as loyalists who sided with the British Crown often had their properties confiscated and redistributed. This period also saw the rise of the new concept of individual rights, which influenced land policies.

In the aftermath, the new nation faced the challenge of creating a fair and equitable system of land distribution. The Northwest Ordinance of 1787, for instance, established a standardized system for surveying and selling western lands, promoting orderly settlement and expansion. 

As the United States embarked on its journey toward independence and nationhood, the evolving concepts of property rights and land distribution would continue to shape its development for years to come. Generational wealth for the masses, however, still has a long way to go.

Valerie M. Blake is a licensed Associate Broker in D.C., Maryland, and Virginia with RLAH Real Estate / @properties. Call or text her at 202-246-8602, email her via DCHomeQuest.com, or follow her on Facebook at TheRealst8ofAffairs.

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Real Estate

How to protect yourself from rental scams

Beware of fraudulent checks, identity theft

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Scams can affect both tenants and landlords during summer rental season.

As the summer rental season ramps up, be aware that scams can affect both tenants and landlords. As a property owner looking to rent out your space, you might encounter various fraudulent schemes when advertising your property online. Understanding these scams and recognizing the red flags can save you stress and even financial loss.

Three of the most common scams that landlords face in the District of Columbia include the following:

1. Fake Payment Scams

Tenants provide fraudulent checks or money orders for rent or security deposits. These payments appear legitimate initially, but eventually bounce or are identified as fake.

Why it works: Scammers take advantage of the delay between the initial deposit and the time it takes for banks to identify fraudulent checks, allowing them to secure access to the property.  Once they do, they have possession and in the District of Columbia, that means a court case to remove them.

Prevention Steps:

  • Verify Funds: Wait for the check or money order to fully clear before handing over keys or signing the lease. This can take several days.
  • Use Electronic Payments: Encourage tenants to use electronic payment methods like bank transfers or verified payment apps, which can be more secure and quicker to verify.
  • Bank Verification: Contact the issuing bank to verify the authenticity of the payment instrument.

2. Identity Theft Scams

Prospective tenants use stolen or fake identities to pass background and credit checks. Once they secure the lease, they may engage in illegal activities or fail to pay rent.

Why it works: Scammers exploit the reliance on documentation and credit reports which, if fake, can be difficult to verify without thorough checks.

Prevention Steps:

  • Thorough Screening: Conduct comprehensive background checks, including employment and previous rental history. 

As a self-managing landlord, this can be both time-consuming and complicated.  There are several easy ways to get caught in unlawful methods of screening based on the Districts strict tenant laws.  When in doubt to get it legally right, seek out professional help, so you do not inadvertently end up violating regulations in place to protect renters.

  • In-Person Meetings: Meet prospective tenants in person and request multiple forms of identification to verify their identity. Again, it’s critical to do this within the boundaries of the law. Make sure if you do it for one, do the same process, have the same questions and take the same actions for all interested parties. 
  • Cross-Check Information: Contact employers and previous landlords directly using publicly available contact information to confirm details provided by the tenant. Make sure you are indeed speaking to their prior or current landlord by preparing very specific questions about their lease agreement or other items a fake reference will not know or will stumble to answer. 

3. Subletting Scams

Tenants illegally sublet the property to others, often at a higher rate, without the landlord’s knowledge or permission. This can lead to over-occupancy and property damage. You may also not know who is living in your unit or if they would have qualified if you had screened them.  Lastly, if they have possession of your property, getting them out involves a court case. 

Why it works: Scammers take advantage of landlords who do not monitor their properties closely, allowing them to profit from unauthorized subletting.

Prevention Steps:

  • Find management: Ensure that preventative steps are taken, to ensure renter compliance with any sub-letting rules you’ve laid down in the original agreement.
  • Regular Inspections: Conduct regular property inspections to ensure that only authorized tenants are residing in the property. Inspections in the District are tricky, a landlord cannot just enter at will or too frequently.  Be sure you know the rules, or ask a professional for advice before you enter your renter-occupied property.
  • Lease Clauses: Include clear clauses in the lease agreement that prohibit subletting without written permission from the landlord. Is your agreement rock solid? Or do you need professionals on your side who know what to do to ensure both you and your renters are protected fairly?
  • Neighborhood Watch: Establish good communication with neighbors who can alert you to any suspicious activity or unauthorized occupants.  If you used to live at that location your former neighbors and friends are the best way to keep eyes and ears out on what is going on in your property and to alert you to any unusual behaviors.

By taking these preventive measures, landlords can better protect themselves from common scams and ensure a more secure rental process.

Anatomy of a Common Rental Scam

Another prevalent scam starts when you post an advertisement for your rental property. Scammers may copy your listing, post it at a lower price, and pretend they are the landlords. Unsuspecting tenants may pay a deposit to them or even the first month’s rent to these fraudsters, believing they are securing their new home. Here’s how the scam typically unfolds:

Step 1: Scammers take the details and photos from your legitimate listing and create a fake one, often with lower rent to attract more potential tenants.

Step 2: They claim to be out of town and unable to show the property, urging potential tenants to drive by and view the property from the outside.

Step 3: They ask for a security deposit or the first month’s rent via online payment methods before the tenant has signed a lease or even seen the inside of the property.

How to Protect Yourself

Here are some steps you can take to protect yourself from these scams:

Secure Your Listing: Use reputable rental platforms and websites known for their security measures to advertise your property.

Watermark Your Photos: Adding a watermark to the images in your rental listings can prevent scammers from easily stealing your photos.

Educate Potential Tenants: Inform applicants about common scams and encourage them to be cautious of listings that seem too good to be true, ask for money up front, etc.

Meet or Video Call Potential Tenants: If possible, meet tenants in person or through a video call to verify their identity and discuss the rental terms. Requiring a matching photo ID during the application process is an added layer to ensure this is the same person.

Verify Tenant Information: Conduct a comprehensive background check, including credit, employment, rental history, and criminal records.

Red Flags for Landlords

To protect yourself and potential tenants from a scam like this, be aware of the following red flags during the tenant screening process:

  • Paying All Cash Upfront: If a prospective tenant offers to pay the rent for the entire lease period in cash without a proper background check, be cautious. This can be a sign that they want to avoid detection due to illegal activities or poor credit history.
  • Urgency to Move In: A tenant who is pushing to move in immediately, especially without seeing the property, should raise a red flag. They might be trying to rush the process before you notice any inconsistencies in their story or background.
  • Lack of Interest in Viewing the Property: Be wary of tenants who do not ask to see the property or who are satisfied with just external views. Genuine tenants will usually want to inspect where they are going to live.
  • Poor or Incomplete Documentation: If a tenant cannot provide proper identification, proof of income, or previous rental history, this is a significant warning sign. Scammers often avoid giving out personal information that can be traced back to them.
  • Unusual Payment Methods: Be cautious if a tenant wants to use unconventional payment methods like wire transfers or cryptocurrency. Standard practices include checks, bank transfers, or credit card payments, which offer more security and traceability.

Organizations That Can Help

If you find yourself a victim of a rental scam, there are organizations that can offer assistance and guidance:

Federal Trade Commission (FTC): They handle complaints about deceptive and unfair business practices, including rental scams. You can file a complaint at ftc.gov.

Better Business Bureau (BBB): The BBB provides information on businesses, including complaints and scam alerts. Visit their website at bbb.org for more resources.

Internet Crime Complaint Center (IC3): This is a partnership between the FBI and the National White Collar Crime Center, and it allows victims to report internet-related criminal complaints. Visit their site at ic3.gov.

Local Law Enforcement: Contact your local police department to report the scam, especially if money has been exchanged.

By staying vigilant and informed, you can protect yourself and potential tenants from falling prey to these sophisticated scams. Remember, prevention is always better than cure, especially in the real estate market.

(Note: For examples of the three scams included, we have produced some of the content of this article using AI.)

Scott Bloom is owner and senior property manager of Columbia Property Management. For more information and resources, go to ColumbiaPM.com.

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Real Estate

A look at down payment assistance programs

Pride in ourselves, Pride in homeownership

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(Photo by GaJaS/Bigstock)

One of the most popular questions at our home buyer seminars is “What are the down payment assistance or first-time homebuyer programs available where I live?”  There are various programs sponsored by multiple jurisdictions with the help of local banks, federal grants and loans as well. Knowledgeable lenders in the area will direct their eligible borrowers to these programs when a home purchase is being considered. Some of the programs are frequently mentioned in the local news: HPAP, EAHP, and DC Open Doors. There are also other options such as:

• FHLB grant for down payment assistance and/or closing costs

• Bank portfolio loans such as the Sandy Spring Bank loan, which can be 3% of the home purchase price – paired with a 97% first trust loan which is 100% financing at market rates

• Citibank Home Run

• Bank of America Down Payment Grant or Home Grant

• Chase Dream Maker Grant

• DC Open Doors – (DC Purchases only)

• HPAP/EAHP (for DC purchases only, when funds are available.)

All of these programs, grants, and loans come with guidelines and regulations, which may include income limits, household size limitations, geographic boundaries, homebuyer education classes, occupying the home as a primary residence, and funds availability. Some are easier to use and implement than others. Others may be available but can take 60 or more days to close on a home purchase, where another buyer may offer a seller a 30-day close. Some of these options may be stacked together to help build the buyer’s purchasing power.  

In many cases they are worth exploring, and “seeing if the shoe fits.” A knowledgeable lender will be able to help a prospective home buyer to “try on these shoes” and see if there is a good fit. The best local Realtors and lenders will help a buyer understand which can be used at the time of purchase, and what types of documentation are necessary for each instance.  

In our experience, the programs are there for those who need it, and in many cases make the difference between what a buyer has available to bring to the table, and what they need to get the “Sold” sign put out on the lawn, and the keys in their hand. Some buyers may decide to investigate these options and go without the program or the available funds anyway.  Perhaps the interest rate is higher when using a program as opposed to going without it, meaning the monthly payment will be more when you use these programs.  Each buyer has their own criteria of what makes a good fit for them.  As with anything, “Mama said you gotta shop around.”  It’s worth considering the various down payment & first time homebuyer assistance options available when looking to purchase and deciding which option(s) provide the best fit.  

Don’t hesitate to reach out for more information.

Joseph Hudson is a referral agent with Metro Referrals. Reach him at [email protected] or 703-587-0597. Tina Del Casale is a mortgage banker at Sandy Spring Bank. Reach her at 301-850-1326.

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