RSS FeedDowntown Still Dropping (Like It’s Hot?)
Instead of blabbing on about $/square foot (yawn) or trying to calculate a discounted cash flow analysis to determine a condo’s worth (kinda’ geeky) or defining owner equivalent rent (look it up if your Nyquil isn’t working properly), we’re going right to the fun part…real estate anecdotes that make you go “hmm..”
One such anecdote appeared in last Saturday’s WaPo profiling the fine art of lowballing and cited the example of a Madrigal Lofts purchaser who worked his way to a nice discount, ultimately purchasing a 1 BR condo in the building settling for under $300K (with parking!). Granted, the 1 BR units in the Madrigal Lofts are not the largest in the world and they’ve been promoting steep discounts in the newspapers but they do make very good use of their space which is at least half the battle towards setting up your downtown crib. And, a downtown crib is a downtown crib – no substitute for that.
Further anecdotal evidence is personal. I took a walkthrough of a downtown, resale 2 bedroom/2 bath condo with the listing agent. Without any prompting, the agent offered up that a lowball offer was on the table and that the sellers were going to “see what they could do with it.” After raising her eyebrows in disgust at that thought, she then offered that the sellers were interested in moving the unit quickly and there was room to come in with a more “fully priced” contract. Someone with a stylized ‘R’ lapel pin didn’t take (De)Leverage 101 or read Loosely Regulated Loans for Dummies (and how they artificially inflate asset prices).
Ultimately a willing buyer and seller coming to an agreement results in a sale. A full analysis of the DC real estate market is beyond the scope of this post and the good news is that incomes and employment in the DC area generally fare well compared to other parts of the country which means a turnaround could arrive here first. But based on the stories and market stats we’re seeing, we still see evidence that downtown DC condo buyers have the upper hand over sellers and will continue to do so through the rest of the year and into 2009.
If you enjoyed this post, please consider leaving a comment or subscribing to the feed and get future articles delivered to your feed reader.
Comments
Well, the individual touting his own horn in the WaPo article is embellishing the facts a little. Seeing as no other reported sale with his floorplan sold for over 310K (with several around the same 283K he paid) I don’t see how he negotiated down 60K. Rather than being the real estate maven he portrays himself as it seems to me he just got the same deal everyone else got on that same floorplan. It’s the smallest floorplan in the building, lacks the elevated loft aspect to the BR, and is the only unit without a flooplan. I wouldn’t be wild about sharing walls with the elevator and trash chute either…
Typo on #2 – I meant only unit without a “balcony”.
These things happen when surfing internet in an office cube environment =)
I closed two weeks ago on a one bedroom loft at Madrigal. It’s on the 11th floor and I paid $385,000 including parking and with some low-level negotiating with the sales team. I am a first-time homebuyer but moved very deliberately and feel very good about the whole process. I love the building and am so happy to be staying in the ‘hood (currently at Mass Court apartments). Just wanted to add my experience, for what it’s worth.
Dumont is about 45% sold and they are starting settlements in August. I’m sure they are willing to negotiate to get deals on the table. Plenty of competition out there with City Vista, Madrigal, Yale Steam, and even some of the Penn Quarter buildings with comprable prices/amenities.
As far as I know Dumont will not negotiate at all. We were interested in buying one, but they wouldn’t budge. But this was last month, so who knows what changed.
In general, around here, particularly near 4th a 5th (Madrigal, 400 mass, yale lofts, etc.) prices seems to be very negotiable. I’ve heard of several people getting 1br unites + parking for under $300 which at my first glance seems reasonable.
Under 300K with parking is definitely reasonable. This is a great neighborhood with a good future.
It’s interesting about the Dumont… with less than half sold I’d think they’d be more flexible.
Any word on what the second building in the Dumont will be? I’ve heard rumblings that it may be turned into a hotel instead of condos.
Pency87…can you provide a little more…which plan on the Madrigal site and whether views are North, South, etc; partially blocked or not. I looked at one studio and it had blocked view of loading dock and church parking lot. My impression was the good units were gone/nearly gone.
I’ve been told that the Dumont building right on the 4th and Mass corner (I believe that is correct) will be just a shell. Nothing will be done to the interiors for 2+ years. The developer is holding out for the market to rebound supposedly.
Anon #9: It is an Alison floor plan (raised bedroom, Juliet balcony) facing west overlooking the DuMont. Not really a blocked view in the sense that the DuMont is the same hight as Madrigal (I hope our future DuMont neighbors buy curtains. Or maybe I don’t.). Plus, we have a really nice look both to the northwest and the southwest (squint and you can see the Potomac). And the view from the roof deck is amazing. Sadly, I think you may be correct about the most desirable units already being spoken for.
often the best source for what a developer plans is the developer itself (or the sales agency). if you really want to know, call the developer’s HQ or regional Vice President directly – skip the sales agent. developers can still be very tight lipped which may not be so friendly for purchasers but it is their prerogative. I endured a 7 month delay in 2005 before moving into my new construction building and the developer released almost no information about why the delay took place nor the estimated duration of the delay.
the credit markets now are far different than what they were when these construction projects were financed and started so a change in plans for a building should not surprise. many buildings converted from sales to rentals as the equation that determines which mode is more profitable swung towards rentals. if a developer has the resources to not drop pricing, leave the project unfinished longer and it’s to their benefit, then that’s what they’ll do. if they need to move the merchandise, you’ll see a more “friendly” attitude. the legal boundaries are defined in the sales contract. after months of delay, the developer of my building called one day and wanted to go to closing in ten days! I told them that they could wait two more weeks to make it more convenient for me (technically, they didn’t have to do so).
many got used to real estate prices rising quickly but the rise had much to do with the availability of cheap, unregulated money being available and not so much basic supply and demand.
PQ Living doesn’t advocate one condo over another. if you’re thinking about buying new: ask a lot of detailed questions and hire your own attorney to review the sales contract before you sign it.
Sorry, the comment form is closed at this time.
Any word on whether the Dumont is offering discounts to move their units? Or on what percentage of the building has sold?