Revitalization Boosts Sales in Emerging Areas
The Capitol Hill neighborhood often makes people think of Congress, the Supreme Court, the Library of Congress and the Capitol itself. But when real estate agents think of Capitol Hill, they think of money.
“I think depending on what part of Capitol Hill you’re talking about, they’re really in line with the city across the park,” said Kevin Shirley, associate manager at the Capitol Hill Long and Foster office, about housing prices. “We’re really in line with Northwest the closer you’re into Capitol Hill proper.”
That success, however, makes the Hill’s residential market “outrageous” to many buyers, said Don Denton, manager of the Coldwell Banker Residential Brokerage Pardoe office on Capitol Hill. But despite skyrocketing prices, people are looking to the Hill as a viable location to settle down.
So, in searching for a place to call home on the Hill, some buyers are looking to the neighborhood’s up-and-coming areas.
Two of the current hot spots attracting buyers on the Hill are the Barracks Row area, a stretch of Eighth Street Southeast which runs from the Eastern Market Metro to the gates of the Washington Navy Yard on M Street, and the H Street Northeast neighborhood, which extends from North Capitol to 17th Street.
Both the Barracks Row and H Street neighborhoods are part of DC Main Streets, an initiative that provides five years of technical and financial assistance to revitalize neighborhood districts. While the revitalization obviously will make the neighborhoods more attractive to buyers and retailers, Shirley said people are not moving to these areas for that reason alone.
“People move to the Hill generally because they work on the Hill,” Shirley said. “It’s a lifestyle choice. And that the area is being revitalized, it makes it an easier choice.”
Shirley said the Hill is attracting buyers from all price ranges and income levels, and while the majority of those buying properties have two incomes in the household, there are a few doing it on their own. Nonetheless, it all comes down to location.
Real estate business on the Hill is booming in part because people are looking for convenience. While “traffic congestion has gotten nothing but worse in the last four or five years,” Denton said each time major traffic jams delay commuters, the District picks up a few more residents. Being close to work, downtown, the airports, the Metro and “a waterfront that is about to explode” are just a few of the convenience factors people take into consideration when thinking about moving to the Hill, he said.
“I can’t walk from here to my house without seeing a dozen people I know,” Denton said of his half-mile trek to and from work. “We walk primarily, don’t have to get in our car to go everywhere. Within about eight or nine blocks there’s a market, cafés — lots of community centers, if you will.”
Bill McLeod, executive director of the Barracks Row Main Street Initiative, said pedestrian traffic has gone up about one-third in the past six months, which has helped the businesses in the area. And for businesses looking to come to the area, he said commercial building prices on Eighth Street Southeast have basically doubled in the past three years, yet the “historic, narrow storefronts and deep stores” are being bought.
The revitalization efforts in both the Barracks Row and H Street neighborhoods is “a value added for those folks who are making the Hill their home,” Shirley said. And for those who already are Hill residents, the revamping of the areas give them no reason to leave. In fact, Denton said many of those in his neighborhood are renovating their homes.
“I am looking at the possibility of doing a substantial renovation to the back of the house to get what we want,” Denton said of his home, which he and his family have lived in for eight years. “To get the kind of house we have now, it’d be way too much money.”
Tim Lewis, executive director of the H Street Main Street Initiative, said it’s promising to see the growth of property values, but affordable housing is a top concern in the H Street community.
“There are not a lot of people who own property who are looking to sell right now — they’re looking to hold because the area is so hot,” Lewis said. “But deals can still be made. I think everyone has a number.”
Those in charge of the former Capital Children’s Museum site at 800 Third St. NE had a number — $24 million, to be exact. Bought by Abdo Development, the site will now be transformed into approximately 550,000 square feet of residential housing, featuring 110-foot-tall buildings with 11 stories, an English basement component and underground parking. (see related story, page 26)
According to Toby Millman, vice president of project development for Abdo, the cost of the residential units will vary anywhere from the low $200,000 range to up to $1 million.
“We know we’ve got a big job on our hands — we’re not afraid of it,” said Jim Abdo, president and CEO of Abdo Development, at a community meeting in August. “We’re looking for permanent residents that are going to bring into this neighborhood. That is part of successful development; it’s how we impact the neighborhood and the lives of the people in the neighborhood.”
The H Street Northeast Strategic Development Plan outlines the ideal H Street neighborhood, complete with a central retail district, arts and entertainment, a mall and urban living. Also, “H Street is proposed to be primarily a transit and pedestrian corridor with retail parking,” and the possibility of bus rapid transit or light-rail transit has been proposed, according to the District of Columbia Office of Planning Web site.
The demographics of both communities are changing as rapidly as the property prices are increasing, and between both commercial and residential development, Denton said people are “putting their own mark on the fabric of the community.”
The desire to live in an up-and-coming neighborhood is not a cheap venture, though, as the average sales price has increased more than 200 percent since 1995. Overall, the average sales price of a home on the Hill was roughly $154,000 in 1995 compared to today’s $464,000, according to a Coldwell Banker Real Estate report. And while nearly 60 percent of Hill sales were less than $150,000 nine years ago, this year not even 1 percent of properties will sell for less than $150,000.
“We’ve had 12 or 14 sales over a million dollars on Capitol Hill this year,” Denton said. “It’s staggering. Condos are selling $400 to $500 a square foot, and years ago you could have given them away.”
While buyers are not finding much real estate for less than $350,000 on the Hill, properties are still being snatched up as quickly as they’re put on the market, and how long they remain on the market depends on the price.
Shirley said the average sales price for a Barracks Row-area property is $447,000. He said how long a house takes to sell varies, but a property in the area averages 19 days on the market.
Looking out his window during rush hour, the gridlock “quickly makes me realize why our market is doing what it’s doing. People just don’t want to deal with it if they don’t have to,” Denton said. “People want an urban lifestyle if they can afford it and get it.”