Hill’s Condo Market Is Starting to Broaden
Mark Higgins is ready and willing to buy his first home. He wants a condo totaling at least 1,000 square feet. And he hopes to live on Capitol Hill.
But after two months, Higgins isn’t even looking anymore.
“Price,” the Arlington, Va., renter said. “Not because I am unwilling to spend, but because right now it would be like buying AOL at the peak of the Internet bubble — not a good idea. As a buyer, I can be patient, very patient.”
Higgins, a presidential management fellow at the Joint Financial Management Improvement Program in D.C., may have to test that virtue.
The condo market on the Hill remains hot — good news if you’re a seller, but not so good if you want to buy a nice place near work. The driving factors: low interest rates and few condos for sale.
As of Nov. 1, only 43 condominiums were listed for sale on the Hill, said Larry Kamins, sales manager at Prudential Carruthers Realtors. Only two were listed at $175,000 or below, and you can bet they’re not in the most desirable locations. Twenty-six were advertised for more than $250,000.
“There aren’t enough of them,” Kamins said. “The availability of properties is a big problem. The development has slowed down because there aren’t enough available properties.”
Most vacant sites near the Capitol have already been developed; hordes of new units came on line in the past five years, thanks in part to developers buying unused D.C. schoolhouses and turning them into residences. That means condo developers are broadening the ring around the Capitol.
Most new development is now focused on the neighborhood around the Potomac Avenue Metrorail station, where a Texas company recently announced plans to build Jenkins Row, a 247-unit condo project featuring a Harris Teeter grocery store. And optimism surrounds both the H Street area and Southeast waterfront, though it’s too early to tell how those neighborhoods will develop.
Kamins knows many Hill staffers want to be close to the Capitol — “It’s an expensive walk to work,” he notes — but warns those starting a condo search to be realistic.
“Be prepared to look and see what you can afford — and not think that the sudden $200,000 property is going to show up in the $800,000 neighborhood.”
The $600,000 Question
Jenkins Row, one of the biggest developments on the Hill in years, will be located at 13th Street and Pennsylvania Avenue Southeast on the site of the controversial Girls & Boys Town facility for at-risk youth.
But don’t think it will be easier to afford just because it’s more than 10 blocks from the Capitol.
Developer JPI has not indicated a price range for the units and did not return calls seeking comment, but agents say they’re likely to start in the $200,000s and peak in the $600,000s.
“On Capitol Hill and in D.C. or general, if something is under $600,000, it usually sells very quickly, whether it’s a house or a condo,” said broker Dino Milanese of Coldwell Banker/Pardoe.
The Harris Teeter will only make the development more attractive — and expensive. Hill residents have long clamored for a new grocery store. And Jenkins Row is still within walking distance of much of what makes the Hill the Hill, including Eastern Market and Barracks Row.
Other developers with projects near the Potomac Avenue Metro station couldn’t be happier.
Across Pennsylvania Avenue, The Escalade — with 12 units ranging from $600,000 to $720,000 — attracted 200 people to its first open house in late October. Ten units were snapped up by Nov. 10.
Another company, Macy Development, is very confident about the area: It is building two condo projects at 15th and C streets Southeast. The Venetian will contain 24 units; The Gaslight will have nine. Marketing will start next year.
“They will be two [Metro] stops from Congress and in the $300,000 and up range,” said Topher Cushman, Macy’s vice president of development and acquisition. “You can still live on the Hill.”
The H Factor
If you find yourself priced out of the new construction market, you can always search for an existing condo, though many have seen triple-digit increases in recent years.
Although asking prices remain high and inventory low, Claude Labbe of Flaherty Group Realtors said the market shows signs of slowing down. He said high energy prices coupled with the specter of higher interest rates could deter buyers.
Whereas the market usually calms a bit after Christmas, Labbe has witnessed a slowdown since Columbus Day, a fact he attributes in part to uncertainty over the presidential election.
“We’re not at all seeing the same kind of hot market we’ve seen in the last two or three years,” he said.
Labbe said one area that could hold the greatest opportunity for buyers is between H Street and Florida Avenue Northeast.
The city has targeted H Street for revitalization, and the anchor project is the former National Children’s Museum site at H and Third streets at the foot of the viaduct crossing the Union Station rail yards.
Abdo Development bought the site and plans to build Senate Square, which will feature 480 condo units and could hit the market as early as 2006. Abdo plans to offer a range of sizes and prices, including some low-income condos.
“There will be unit sizes that allow everyone from the economic spectrum to participate in Senate Square,” said Jim Abdo, president and CEO.
He said it’s too early to price the condos, but the project will feature studios to three bedrooms. Watch for marketing to begin next spring.
“We’re trying to produce a tremendous number of entry-level units, if you will,” he said.
The downside, however, remains the neighborhood, still home to boarded-up rowhouses and businesses. Abdo said permanent residents with a stake in the community are the first step in revitalizing the area.
Other developers have also turned to the area. KL Associates and Neighborhood Development Co. plan to build the New Yorker at 300 L St. NE, just two blocks from Abdo’s property. It will have 44 one- and two-bedroom condos ranging from the low $200,000s to the $500,000s.
The companies, which expect to break ground this winter, launched sales in October. Thirty-three of the units have been reserved, said Kimberly Mitchell, sales manager.
“We’re going to be the pioneers,” she said.
Kamins, the Prudential Carruthers agent, noted that it took 20 years before the 14th Street Northwest corridor — which, like H Street, was ravaged by riots in 1968 —showed signs of life.
“I’ve got my fingers crossed on H Street,” he said.
The unknown in the market is the fate of the Southeast waterfront, slated to become the home of D.C.’s new baseball team. Mayor Anthony Williams (D) hopes the stadium will spur economic development along the waterfront, which is divided from the Hill and downtown by the Southeast/Southwest Freeway.
It’s uncertain what residential development might occur around the stadium, which will not open until the 2008 baseball season. But city officials hope to see a renaissance similar to what MCI Center did for Seventh Street Northwest and what Camden Yards did for downtown Baltimore.
“Right now Capitol Hill sort of ends at the freeway,” Labbe said. “I think that’s going to change in a few years.”