By most measures, Washington is a great place to be a seller—the real-estate market is booming, and bidding wars are the norm. But there are some exceptions, like the recent sale of a seven-bedroom, seven-and-a-half-bath Colonial on Marwood Hill Drive in Potomac, which was listed as a potential short sale. Its former owner, Jinesh "Hodge" Brahmbhatt, sold the home for $1.9 million, according to Maryland property records; he bought it in 2006 for $2.6 million.
You might've read about the former financial adviser last year when he was under investigation for steering his athlete clients, including former Washington running back Clinton Portis, Detroit Pistons guard Brandon Knight, and 49ers tight end Vernon Davis, to invest in an alleged $18 million Ponzi scheme. Brahmbhatt's lawyer, Alan Futerfas, says his client didn't know the investments were fraudulent and was deceived by the scheme's operator.
Nonetheless, Brahmbhatt, who in the 90s worked at Stratton Oakmont—the brokerage house made famous by Leonardo DiCaprio in the The Wolf of Wall Street—lost his firm, Jade Wealth Management. And the Financial Industry Regulatory Authority barred him from the securities industry for failing to appear at a disciplinary hearing related to the alleged fraud. Futerfas says Brahmbhatt had to sell the Potomac house as a result.
Among the home's features: a grand two-story foyer, a home theater, a massive master closet, and two kitchens.
Find Marisa M. Kashino on Twitter at @marisakashino.
In DC real estate, there are few things more enviable than a perfectly renovated old rowhouse—and this particular one is a triple threat, combining a glam restoration with a beautiful private patio and a killer location. The turn-of-the-century end-unit rowhouse sits on one of our favorite city streets, Q Street in eastern Georgetown—a quiet, shady street conveniently positioned just a few blocks from gorgeous Montrose Park and Dumbarton Oaks. The four-bedroom home is a sleek stunner, recently redone with a contemporary style that includes some majorly chic touches. Some of our favorite details? Downstairs, we love the foyer’s bold checkerboard flooring, the kitchen’s Carrera marble counters, custom Porcelanosa glossy white lacquer cabinetry, and statement dining chandelier, and the living room’s modern marble fireplace. Upstairs, the master bedroom is designed with high-drama black wall, and the spa-like master bath features a freestanding soaking tub, eye-catching tilework, and a huge walk-in rain shower. But the best part, perhaps, is the private garden in the rear of the home—a two-level, surprisingly deep patio space with a cozy stone fireplace area and ample built-in seating throughout. It practically begs for summer entertaining. Fingers crossed for an invite.
This home is listed at $2.75 million. Take a look below, then go to Washington Fine Properties for the full tour.
To locals, it’ll come as no surprise that renovating and reselling homes is big business in Washington’s many booming neighborhoods. Now, confirmation: A report released Thursday from the real-estate site Redfin ranked the country’s top ten neighborhoods for price increases due to flipping—and the Washington market counts four of the ten. Which one comes in on top? That would be Petworth, which ranked number one in the country with an average of $312,400 gained per flip. Next up is Brookland, listed at number three with $271,900 per flip, with Fort Totten and Stadium Armory a little further down the list, at numbers six and seven with $233,000 and $230,400 gained, respectively. Other cities with neighborhoods in the top ten include Portland, San Francisco, and Los Angeles. Redfin defines a flip as a home that was purchased and sold again within a year—and of course, a pricing increase doesn’t necessarily mean a profit, since improvement costs are often sunk into the home before reselling.
The report includes a few other interesting tidbits about home flipping in our city: Last year, more than 4,000 area homes were flipped in about 172 days, according to Redfin’s analysis of MLS stats—and with 2013’s average of $104,100 gain per flip (that’s higher than the national average of $90,200), don’t expect it to slow any time soon. This year is already on pace to lap last year’s total.
Head to Redfin to see the full report.
The first time you do anything can be a bit tricky. But throw in a mortgage, a contract, and a potentially life-altering decision? That’s a whole new level of scary. We checked in with local realtor Erin Mendenhall of McLean’s Mendenhall Properties, and she shared her expert wisdom on what to know when you’re first setting out on the house hunt. The number one thing to remember: “Your agent should make you look good,” she says. “Just like a Hollywood agent lands celebs dream roles, or an NFL agent can take a college athlete to the big leagues—you want your agent to make you look good and to fight for you.” Noted. Read on for the rest of Mendenhall’s advice.
1) Get help. “A licensed real-estate agent is like both a matchmaker and a lifeguard—they’ll hook you up with your perfect home and throw you a lifeline to help guide you through the tricky process. But don’t just rely on us. You should also consult with your local bank, and seek a different opinion. Treat this decision as if it were a medical decision. You financial health is just as important. So many people go online to see how much they think they can afford. But if you broke a bone, you wouldn’t go on WebMD—you’d see a doctor.”
2) Ask for a personal recommendation. “This business is all about who you know. So—who do you know? Have any of your friends recently bought a condo? Ask for their agent. Your agent is someone you need to trust. You’re going to have a million questions throughout this process—so make sure to think about that when choosing the right fit for you. Will they respond to text messages? Will they e-mail you back within an hour? Or will they make you feel like you work for them? That’s not the way it should work. Remember that.”
3) Know what to expect from your agent. “At your first face-to-face buyer consultation meeting, your agent should explain to you the different representation agreements for Virginia, Maryland, and DC. Yep, all those agreements are different. This meeting should be about you: What’s your ideal home? What are your financial concerns? What is your timeline? You should leave that meeting with concrete steps that you’ll make along the process. Think of it as a syllabus of sorts with a college professor at the start of a semester.”
4) Be smart about your loan. “Your agent should fight for you with a lender, and your agent should represent you in a face-to-face meeting with your lender. If you’re taking out a loan, your agent should know before the meeting how much you can afford. Do not let the lender oversell and overpromise how much you can afford. Consult with your bank ahead of this meeting. And whatever you do, don’t use an online website (cough, cough, Lendingtree.com) to fill out your financial information.”
5) Prepare, prepare, prepare. “Remember when you were applying for colleges? You had your SAT scores, letters of recommendation, and a résumé. This is more important. Have two years of tax returns, two months of bank statements, and two months of pay stubs.”
Another day, another über-luxe condo development: Sales for the seven residences in Georgetown’s still-under-construction, canal-facing condo development—dubbed 1055 High after the pre-1895 name of Wisconsin Avenue—started yesterday. Built with an eye toward evoking the historical architecture of the neighborhood while infusing the design with modern-industrial details, the building boasts some pretty lavish-looking amenities, such as a garden roof terrace with a 45-foot pool and a glass-enclosed rooftop fitness center. The private residences are huge—all three or four bedrooms units of up to 4,300 square feet—and feature private terraces or balconies, walls of windows that overlook the C&O Canal, Georgetown, and garden views, and two garage parking spots each. Naturally, the prices reflect the luxuries: The condos start at $3 million and range up to more than $5 million for the corner penthouse. They’re slated to be ready for a late fall move-in. Check out the just-released renderings below, then head to the development’s website for more details.
Prospective home-buyers probably don’t need to be reminded that it gets more expensive every year to own property in Washington. But a new report from real-estate website Trulia on how much a typical middle-class family needs to buy a house suggests that while it’s tough, it’s far better here than in other big metropolitan areas.
The report finds that 62 percent of homes in the Washington area are within reach of households earning the median annual income, measured at $88,233 in 2012, according to the US Census Bureau. Washington isn’t as affordable for middle-class households as Chicago, where 70 percent of homes are affordable, but it’s far more egalitarian than Seattle (53 percent), Los Angeles (23 percent), or New York (25 percent). The San Francisco metropolitan area, predictably, is the least welcoming toward middle-class buyers, with only 13 percent of homes within the range of what median earners can scrape together.
Trulia defines a home as affordable for a middle-class buyer if the annual total for monthly mortgage payments is no more than 31 percent of a purchaser’s yearly earnings, assuming a 4.4 percent 30-year fixed rate after putting down 20 percent. That comes out to about $27,350 for people in Washington’s median salary range.
But breaking down Trulia’s findings just a bit reminds that buying a home in the area is still incredibly difficult for many, if not most. While 62 percent of homes on the market are affordable for people making the regional median, it gets much tougher for those with less education. People earning the median salary for someone with a bachelor’s degree can scope out 75 percent of the market, but for people who have only some college experience or just a two-year degree, that figure drops to 47 percent. People who have only completed high school or less can only afford 25 percent of homes on the market.
There are stark geographic breakdowns, too. Prince George’s County is the most affordable, with 85 percent of homes there within middle-class means, but in the District itself, median earners can only reach 44 percent of the housing market. The numbers get even slimmer in Northern Virginia’s close-in suburbs. Outlying Prince William County is more favorable, but people who live there but work closer to DC often trade lower home prices for higher transportation costs.
Trulia’s conclusions are fairly dismal. Although Washington isn’t nearly as bad as New York or California, the middle class here should not expect much relief, even with a recent slowdown in the local real estate market. And of the two easiest ways Trulia identifies as creating more affordability, one is undesirable and the other is unlikely when housing units in Washington are routinely snapped up within days of hitting the market.
“For America’s most expensive housing markets to become significantly more affordable, they would need either a spectacular drop in demand—a local economic collapse, for example—or a dramatic increase in housing supply,” Jed Kolko, Trulia’s chief economist, writes in a blog post presenting the data.
Has March Madness got you thinking that you should be working more on your free throws? Here are five homes that are on the market now with either indoor or outdoor basketball courts.
This Sykesville estate features a full indoor court and a designated “locker room.”
Price: $3.999 million
This McLean mansion has a terraced backyard with a “sport court,” plus a putting green and pool.
The owners of this ranch decked out their indoor ball court with wall murals meant to channel a cheering crowd.
This Winchester home offers up an outdoor half-court.
Another “sport court” that works for either basketball or tennis.
This first part shouldn’t come as much of a surprise: Washington is the nation’s sixth most expensive city in which to buy a house. But here’s something new—to make the purchase, your salary needs to be $62,809.63. Or at least so says a study released yesterday by mortgage-info site HSH.com, which combined median home pricing data from the National Association of Realtors with the site’s independent information on average interest rates to come up with the salary figures for 25 of the country’s largest cities. Predictably pricey San Francisco took first place, with $115,510, followed by San Diego, Los Angeles, New York, and Boston. See the full list with breakdowns by city here.
The salary requirement is meant to cover principal and interest payments on your region’s average home—here, that's listed at $368,000. And the full explanation of methodology does comes with a disclaimer: “There is no doubt that your income will need to be much higher to cover taxes, insurances, and other expenses to live in the home, plus any other debts you might have.” Well, yes. But discounting those extra costs—does that $62k figure seem tenable for our area, or are you as doubtful as we are? Sound off in the comments.
If you’ve been toying with buying a vacation home within driving distance of Washington, now may be a good time. “It’s still a buyer’s market,” says real-estate agent Bill Weissgerber Jr., who has been selling vacation properties around Maryland’s Deep Creek Lake and Wisp Resort for 30 years. The market in resort areas across the region tends to lag behind Washington’s: If values rise here, they’ll rise there—though less sharply—within a year or so.
The market here is hot, which means prices in resort areas may be poised for growth. “I think we’re at that inflection point where inventory is starting to shrink but we haven’t seen prices rise yet,” says Justin Healy, co-owner of Ocean Atlantic Sotheby’s, which sells homes in Rehoboth Beach, Bethany Beach, and Lewes. Coupled with low interest rates, the conditions are good for buyers. Convinced? Here are six tips and trends second-home buyers should keep in mind as they embark on the spring buying season.
1. Think Local
Jim and Marte Coleman recently bought a vacation home on the Miles River in St. Michaels. The Potomac couple hadn’t vacationed in the Eastern Shore town since their tenth anniversary 18 years before, so they relied on agent Barbara Watkins to help them see how far their money could go. “She was familiar with the nuances of the area,” Jim Coleman says. “We got a real education.”
Using a local agent also helps put you in touch with nearby lenders, who often understand the market better and can more accurately predict appraisals than their national counterparts. On the Eastern Shore, loan officers are aware of the rising premiums homeowners are paying for flood insurance—and the impact that can have on their housing expenses.
“Where a flood-insurance premium may have cost $1,500 two years ago, it might be $4,500 or $5,000 now,” says Eastern Shore lender Bill McGuire of First Home Mortgage. “That’s a game-changer for some people.”
2. Be Prepared for Paperwork
Lenders are much more cautious than they were before the recession. Buyers should expect to make full financial disclosures, including two years of tax returns and W-2s, recent pay stubs, and asset verification. “It’s definitely more ‘i’-dotting and ‘t’-crossing,” McGuire says.
Second-home buyers generally need a minimum credit score of 700 to qualify for a loan, whereas Fannie Mae requires a minimum score of about 620 for primary-home buyers. Jerry Merrick, a mortgage officer in the Deep Creek area, encourages clients to prequalify for loans to avoid financing problems when they have a house under contract.
3. Bring Cash to the Table
Because owners are more likely to default on a second home than on a primary home during financial hardship, mortgage companies want buyers to put substantial money into the deal. The upshot: A standard down payment on a vacation home nowadays starts around 20 percent.
Many are putting a lot more down than that—last year, a quarter of buyers in Garrett County—home of Deep Creek and Wisp resorts—opted to pay all cash. “Cash sales have become more common since 2008,” Weissgerber says. “A decade ago, almost every buyer financed, often with nothing down.”
4. You’ll Pay for Walkability
“People want to be close to one of the towns so they can pop into a restaurant or do a little shopping,” Watkins says. Jim Coleman bought a home a mile and a half from the center of St. Michaels. He likes being able to bike into town or step outside and drop a kayak in the water. “It’s the whole package,” he says.
Whether you’re house-hunting on the Eastern Shore, in Rehoboth, or near Middleburg, the trend holds true: If you want to be able to walk to dinner or a coffee shop, you’ll have to pay a premium.
5. New Construction Is Sparse
Construction in many places ground to a halt in the wake of the recession, and there still aren’t many new homes on the market. Even on the Delaware shore, where Healy says construction is up again, new waterfront developments are scarce.
Watkins says construction is down for other reasons: changes to local building regulations, environmental restrictions, and impact fees. In 2012, Maryland adopted the most recent International Energy Conservation Code, which sets stringent standards for everything from heating systems to lighting. (Delaware and Virginia use the code’s previous iteration.)
“Building costs have gone up significantly,” Watkins says, “and the permitting process is very hard to get through.” Installing a septic system that meets updated requirements in a new home on the Eastern Shore can cost up to $20,000, according to broker Debbie Hileman. Until a legislative change last year, a basic system cost $2,000 to $4,000.
6. Think Like an Owner
Bob Bedingfield wanted to find a place where his extended family could gather within driving distance of his Potomac home. He fell in love with a six-bedroom lakefront property in Deep Creek but didn’t know whom to contact when homeowner issues such as plumbing, electrical work, and snow removal came up. When he decided to add on to the house, he asked his agent to help him find a builder. “There is a network up there,” Bedingfield says, and it helped to have someone who could introduce him to it.
Second homes bring up the same problems as primary residences, but in a less familiar place. Every contact you make can be useful in the future.
This article appears in the February 2014 issue of Washingtonian.
The online real estate brokerage Redfin on Wednesday released its list for the neighborhoods nationwide that boasted the greatest leap in popularity during the past four months, which was determined by tallying pageviews in the millions, homes marked as “favorites,” and agent insights on growth, as compared with the same time frame last year. Fourth on the list? Our very own Upper Chevy Chase, whose properties managed to snag a 430 percent increase in pageviews. Redfin notes the area’s abundance of single-family homes, highly rated schools, proximity to downtown, and (slightly) lower prices as contributing factors to the increase. But that doesn’t mean all that good stuff comes cheap: Upper Chevy Chase ranked as the second most expensive area on the list, with a median sale price of $873,000 in 2013, coming in after San Francisco’s Bernal Heights North Slope.
The site also compiled rankings by city. On the DC list: Northeast DC’s Michigan Park (which grabbed 187 percent more pageviews), Fairfax County’s Pine Spring (535 percent), and Arlington’s Lyon Park (159 percent) and Waverly Hills (439 percent).
Head to Redfin to see the full report and find out how Washington stacks up against the other 20 cities.