The story of washington's hot real-estate market is often explained by the numbers. Interest rates are low, employment is up.
The result is that the median price of homes sold here in the first three months this year was $229,000–20 percent higher than a year ago.
But there's more going on here than statistics–there's an intangible we might call "irrational exuberance," to borrow from Alan Greenspan. Says Gail Camalier, a longtime real-estate agent in Virginia, "This market is crazy."
Just how crazy? We asked agents, buyers, and sellers for war stories. Here are some of them.
If you have a story to tell, e-mail us at email@example.com.
"Won't You Take $55,000 More?"
"I want this house," rubin said. A retired journalist, Rubin had been house-hunting with his friend Samantha for five months when they found a Dutch Colonial in Chevy Chase, just over the District line. It had a cathedral ceiling in the living room, Spanish tile in the foyer, a stone patio, beautiful landscaping.
"I'll give anything for it," said Rubin. They had looked at many houses in the $500,000-to-$600,000 range, most of which needed thousands of dollars of work.
Rubin's agent presented a contract on the Dutch Colonial the next day. "I never in my wildest dreams thought I would buy a house in a day," Samantha says. But by this time she would arrive at each house in a panic, thinking, "What do we have to do to get it?"
The asking price was $589,000. The week before, Rubin had bid $540,000 on a Chevy Chase rambler–$15,000 more than the asking price–and lost. Now he put in an escalation clause promising to match any offer up to $644,000–$55,000 more than the list price.
Rubin's agent called with the bad news. There were four other contracts on the house, two offering more than Rubin's escalator. "Much more," says Samantha.
Defeated in his attempt to buy, Rubin decided to renovate his house.
"Last year, i had a house that was set to sell for $1H million," says Sue Huckaby, a Weichert agent. "Before I ever put it in the computer listing, I had two competing buyers. It ended up selling for $1,675,000."
Most agents in Huckaby's Northern Virginia office try to limit the number of contracts they'll take on a house to nine or ten, she says. "It just becomes unmanageable after that. If you have ten contracts, you have nine agents that are mad at you."
Hunt on the Hill
Jim arrived in dc from detroit last fall with his wife, Nancy, and their newborn daughter. They rented an apartment in a rowhouse on Pennsylvania Avenue in Southeast and began looking to buy a home on Capitol Hill.
They got into their first bidding war on a house about seven blocks from Union Station. It was hardly picket-fence perfect–the neighborhood bordered a rough area, and the back porch was about to collapse. But it had a nice basement, and they figured it could be fixed up and rented out.
Jim and his wife offered $326,000–nearly $70,000 more than the asking price and the highest of seven bids. But they had neglected to fill out a form, and the house went to a bid that was a few thousand less.
After a second defeat in a bidding war–they dropped out about $30,000 shy of the $470,00 sale price–they caught a bit of luck. Their real-estate agent heard of a woman struggling to rent her house near the corner of 11th and Pennsylvania. It was eccentric, with a tiny kitchen, '70s-style shag carpets, and an apple press mounted in cement in the basement.
Jim offered $270,000–about twice what a house like that would bring in Detroit. But a second buyer appeared, and a bidding war broke out on a house that was not even on the market. It sold for $330,000, and Jim and Nancy lost again.
A few weeks later, they went to an open house for a two-bedroom place near Eastern Market. Built in the 1880s, the house had peeling paint and an odd assortment of art-deco fixtures. It had recently been reduced from $420,000 to $399,000.
Six months of toting their little girl to open houses was wearing on Jim and Nancy. Their rental was not ideal: Most of the other tenants were young singles who partied late into the night, and the house was near several popular bars. "Do you know how many times a night Hawk 'n Dove empties its beer bottles?" Jim says. "I can tell you."
Jim and Nancy offered $402,000 and got the house. "I'm embarrassed to tell my family," Jim says. "You could buy my entire town for what we paid for that house."
Bless This House
Mark and alice first decided to renovate the home they'd lived in since the late 1980s. But six months after work was scheduled to begin, no one had picked up a hammer, and the contractor had run out of excuses.
The couple began looking to buy a new home. They knew the market was tough. Years earlier, they had lost bidding wars to dot-commers with money to burn.
So Alice began doing detective work to identify houses before they went on the market. She scouted neighborhoods, searched property-tax records of vacant homes, and asked friends to keep a lookout.
One friend told her that a nearby church might be selling its rectory, a 1950s brick house on three lots. The rumor was true–the house was going on the market soon, a church warden said. He gave them the keys and said, "Take a week and look it over."
"We did not breathe a word about the house to anyone," says Alice. An agent lived across the street from the rectory, so Alice and Mark disguised their comings and goings. They parked at the end of the street, walked to the house, raced into the backyard, then went in through the back door.
When Alice set up a termite inspection, she refused to give the address until minutes before the appointment. "Are you nuts?" the inspector said.
Even the day after settlement, Alice couldn't shake her fear of losing the house. "We're still waiting for someone to come in and undercut us," she says.
Jeff wilson, a long & foster agent, recently put a three-bedroom, 3H-bath Silver Spring townhouse on the market for $179,000. "I guess I'm sort of a snob, but to me there was nothing that appealing about it. It wasn't some $600,000 glamourous townhouse with a two-car garage. It was run of the mill."
The house sold for $191,000 after attracting 29 contracts, a record for his Bethesda office. "Nobody has even come close," Wilson says. "It's a freak of nature." The secret might have been in the price. Starter homes are in demand all over the close-in suburbs, and Silver Spring, now undergoing a downtown revitalization, is a hot place to live.
"The Most Aggressive Buyers in 18 Years"
"I've been in real estate for 18 years," says Melissa, an agent who works mostly in Bethesda and Potomac, "and I think this is the most aggressive group of buyers that I've seen. Almost everybody has already lost a house in bidding."
Melissa recently put a Bethesda home on the market for $419,000. Though the house was on a busy road, it drew 19 offers, most of them from young couples. Melissa had to create a spread sheet to sort out the bids. The winner: a $575,000 contract stripped of contingencies.
"I think I underpriced it," Melissa says. "But in this market, that doesn't hurt the seller. It only throws off some of the buyers." *
Five-bedroom Chevy Chase Victorian
List: $1,395,000 Sold for: $1,605,000
Five-bedroom Woodley Park Colonial
List: $1,395,000 Sold for: $1,550,000
Five-bedroom Woodley Park Colonial
List: $995,000 Sold for: $1,073,000
Four-bedroom McLean Colonial
List: $1,450,000 Sold for: $1,530,000
Let the Bidding Begin
Where are the biggest bidding wars? The median house price tops $350,000 in 20 Zip codes; in nine of those, at least a third of the houses are selling for more than the asking price. In many of these neighborhoods–west Bethesda, in particular–a lot of homes sell for under list. Realtors say these are often homes priced at $1 million and above, a range where the market is softer.
|Neighborhood||# of Houses Sold (2001)||% Sold Over List||% Sold at List||% Sold Under List|
|20015 (Chevy Chase DC)||255||53||17||30|
|20008 (Cleveland Park)||525||48||25||27|
|22205 (North Arlington)||266||45||24||31|
|20016 (Spring Valley)||646||37||33||30|
|20817 (West Bethesda)||577||35||24||41|
Source: Metropolitan Regional Information Systems