D.c. Buyers Scramble For Homes In A Seller's Market (Transcript) | WAMU 88.5 - American University Radio

Transcripts

D.C. Buyers Scramble For Homes In A Seller's Market

MS. REBECCA SHEIR

00:00:08
Welcome to "Metro Connection." I am Rebecca Sheir. And now that our hot, steamy summer is officially over, we're looking forward to those crisp, leaves-changing days of autumn with a show all about falling. We hit the streets to see what your favorite things are about fall in the Washington region. And here's what you had to say.

UNIDENTIFIED WOMAN

00:00:28
Definitely jumping in piles of leaves.

UNIDENTIFIED WOMAN #2

00:00:30
Just be outside, get out of the city.

UNIDENTIFIED MAN

00:00:33
Drink apple cider. Eat pumpkin pie, or even better, make pumpkin pie.

UNIDENTIFIED WOMAN #3

00:00:37
I mean I look forward to the Starbucks pumpkin spice latte, which I have right now.

UNIDENTIFIED MAN #2

00:00:41
I like to go to pumpkin patches with my son.

UNIDENTIFIED WOMAN #4

00:00:45
Football, World Series.

UNIDENTIFIED MAN #3

00:00:45
I mean, if the weather's like this, it's still nice to go to a park, take a walk, things like that.

SHEIR

00:00:57
Of course, there are plenty of other kinds of falls, too. Many of which we'll explore over the next hour. Like for instance, falling head over heels in love.

UNIDENTIFIED WOMAN #5

00:01:06
He was allergic to cats actually. And that was one of my mother's big things. She was, she said, are you sure that you want to be with somebody who's allergic to cats?

SHEIR

00:01:15
We'll also hear about a 19th century entrepreneur whose physical fall nearly erased his name from history.

UNIDENTIFIED WOMAN #6

00:01:21
We were telling the story to one of our friends and they said, oh, well he literally fell off the wagon.

SHEIR

00:01:28
Plus, we'll visit an all-important kilogram, whose weight may or may not be falling. And we'll meet two women who document homicides in D.C. and Baltimore. The rates of which are continuing to go down. First though, something else that may be going down in the D.C. region is the number of places like this.

MR. ERIC RICE

00:01:50
So we've got oak flooring in this one. It's a little more traditional style.

SHEIR

00:01:53
We're talking about residences for sale. Big windows in the back, looking out into the yard.

RICE

00:01:55
Tons of light, which is great.

SHEIR

00:01:59
And today we're in D.C.'s Petworth neighborhood. Where realtor Eric Rice...

RICE

00:02:03
Parking, yard space, open kitchen.

SHEIR

00:02:05
Is showing me a three-bedroom, three-bathroom house on Fourth Street northwest. This one, how much are they asking?

RICE

00:02:11
$619,000.

SHEIR

00:02:12
As of this interview, how long has it been on the market?

RICE

00:02:14
15 days. So I think this one might be around for a little while. Probably not a tremendous amount of time.

SHEIR

00:02:19
And that, says Rice, is increasingly common. See over the past five years, D.C.'s for sale inventory has decreased. This year, for instance, the number of houses on the market is two-thirds what it was last year. And about half of what it was in 2008. As a result, prices are up and the number of days a house stays on the market, is down.

MS. SAMIA PATEL

00:02:50
You know, as I'm looking through comps, I always look to see how long a house is on the market. A lot of them are single digits. I'd say averagely it's a month or right under that. But I've seen houses that are gone in one day, five days, six days.

SHEIR

00:02:52
And the reason Samia Patel tends to look through comps, or comparables, that's the list of criteria from recently sold properties in a neighborhood. Like sale price, square footage, the house's age, that kind of thing. Anyway, the reason Patel is so well-versed in comps is because she buys houses in the D.C. area, then renovates and sells them.

PATEL

00:03:08
I started in 2007, when the market was at its peak. And I finished my first house just as the market was tanking. So then I stopped doing it and got back into it about two years ago. So I have actually got a good perspective over like the bubble, the bubble bursting, the bubble coming back. And I'm actually very surprised by now, how much of a seller's market it's become again.

SHEIR

00:03:32
Patel recently showed me around her latest renovation. It's a five-bedroom, two-bathroom house in Kensington, Md., which she recently put on the market. Asking price? $490,000. By the time this story airs, do you think it will be snatched up?

PATEL

00:03:46
Well, I don't want to say because then the story will air, and if it's not, I'll look very stupid. I think it should be snatched up.

SHEIR

00:03:56
And chances are it will be. After all, Patel put a ton of time and money into making this house all sparkly and shiny and as she's come to learn...

PATEL

00:04:05
Buyers like shiny.

SHEIR

00:04:09
But the market's so tight she says, that even anything but shiny properties are hot right now.

PATEL

00:04:14
I went to an auction for a house, I think it was Garrett Park. It was like a tiny house. It had mold all over the basement. I don't even think you could be there for more than five minutes safely. There were a hundred people that showed up outside that house for the auction that day. It was listed at $199,000. It ended up selling for over four hundred-something thousand dollars.

SHEIR

00:04:33
The thing is, whether we're talking about houses for flipping, or houses for living, the situation seems to be the same. Inventory is low, prices are high. And as a result, says Lisa Sturtevant, deputy director of the George Mason University Center for Regional Analysis, home ownership rates in the D.C. region are falling.

MS. LISA STURTEVANT

00:04:52
Rates have been falling nationally, but they've been falling faster here. They have fallen from about 69 percent at its peak to about 63 percent.

SHEIR

00:04:59
The reasons, she says, are manifold. More jobs in D.C. are attracting more people in their 20s -- people who are more likely to rent. Home loans are harder to come by. Foreclosures have shifted more single family homes to the rental market. And, as we've heard, for sale inventory is down.

STURTEVANT

00:05:16
There was for awhile a lot of hesitancy for a seller to put their home on the market. They weren't sure, frankly, that they'd be able to find a house to buy themselves if they sold their house. If they were going to stay in the region they needed to find that move-up house. And there's a lot of people, frankly, who are underwater on their mortgages, and they can't sell their house.

SHEIR

00:05:32
Also Sturtevant says, there's a historically-low supply of new homes.

STURTEVANT

00:05:36
Because new home construction basically ground to a halt during the recession. We have been seeing an uptick in residential construction here in the region over the last couple of years, but it's been primarily in multi-family rental housing. It's only just very recently that the single family market has started to come back.

SHEIR

00:05:54
And we have the issue of sequestration. With so many federal employees in the region, there's growing concern about how federal spending cuts may affect people's jobs.

STURTEVANT

00:06:05
If the budget cuts go through, our analysis shows that the state of Virginia, for example, will lose 207,000 jobs.

SHEIR

00:06:12
So if those cuts go through?

STURTEVANT

00:06:13
There's going to be less demand for housing here. And that would result in a slowdown in the housing market in the winter and then spring.

SHEIR

00:06:18
If, on the other hand, the federal government makes decisions that inspire more economic certainty...

STURTEVANT

00:06:23
Then we'll see a stronger winter and spring housing market. So we don't know. It sort of depends on what the feds do.

SHEIR

00:06:30
In the meantime though, Lisa Sturtevant has advice for potential homebuyers out there.

STURTEVANT

00:06:34
If you're going to stay in a region for, they say generally between five to seven years, and you want to be a homeowner, then it's still a good option for people.

SHEIR

00:06:43
Though in this region, adds house-flipper Samia Patel, you'd better act fast.

PATEL

00:06:47
You just have to jump, you know, in his market. If you see something you love and it's in your price range, or even if you have to stretch a tiny bit, but not to the point of uncomfortable, just do it. You'll never regret buying a house that you love.

SHEIR

00:06:58
And realtor Eric Rice agrees.

RICE

00:07:00
You don't want to act without being educated. So you want to look at the comparables, make sure you're paying a fair price, or if you're paying slightly over the market value, you know that you're paying slightly over the market value. But if you're entering the market, be ready to move quickly or be ready to lose the first house that you love.

SHEIR

00:07:18
Because in the current market, where sellers are calling the shots, home isn't just where the heart is. More often than not, it's where the fastest, highest bidder is, too.
Transcripts of WAMU programs are available for personal use. Transcripts are provided "As Is" without warranties of any kind, either express or implied. WAMU does not warrant that the transcript is error-free. For all WAMU programs, the broadcast audio should be considered the authoritative version. Transcripts are owned by WAMU 88.5 FM American University Radio and are protected by laws in both the United States and international law. You may not sell or modify transcripts or reproduce, display, distribute, or otherwise use the transcript, in whole or in part, in any way for any public or commercial purpose without the express written permission of WAMU. All requests for uses beyond personal and noncommercial use should be referred to (202) 885-1200.