Home prices are down--and sellers are eager. But buying a house isn't always easy.
Case in point: The Rosedale Park subdivision east of Wisconsin Avenue is a few blocks from Bethesda’s Woodmont Triangle. Its mostly modest homes were built in the 1930s and 1940s for the working middle class. Smaller, older houses remain, but many have been torn down and replaced by much larger residences. A six-bedroom, five-and-a-half bath house on Rosedale Avenue built in 2005 and purchased for $1.24 million went on the market last summer at $1.4 million. By the second Sunday in December, the price had been lowered to $1.25 million, meaning the sellers would lose money after paying the sales commission and transfer taxes. They had already rejected two $1 million offers.
Government lawyer Jim Blenko and his wife, Shubha Pathak, an assistant professor at American University, were among the potential buyers. They were number two on a sign-up sheet that real estate agents had placed in the kitchen during an open house. “I’m out looking, though it’s tough in the current financial market to know what to do,” says Blenko, who rents a home in Rockville. “We’ve been looking for more than a year.” They’d made two offers, but the homes had problems so they backed out.
Dan Schneiderman, a lawyer in private practice who is married to another lawyer, also was looking at the house but was wary. “You are lucky,” he tells Blenko. “You don’t have to sell” to buy. In 2002, Schneiderman bought a town home in the District at 15th and U Street NW, and said he is very reluctant to sell in the current market. “My concern is stability,” he says. “I don’t want to take a hit on both ends.” Two weeks later, Schneiderman writes in an e-mail: “We are holding tight for now and have not put in any offers. [We are] waiting for the market to stabilize before we move to the suburbs.” Blenko reports that he and his wife have since “gone to another open house and have continued to watch the real estate listings online. We would still like to buy our own home, but do not want to recklessly buy an asset that is still dropping in value. We plan to continue saving and looking.” The Rosedale Avenue home sold for $1.2 million on Jan. 9.
Up the block on Rosedale sits a tiny, two bedroom 1938 home with a stucco exterior and a musty, old-house smell. The kitchen cabinets have been updated, the house has been freshly painted inside and the recently remodeled basement has what could be a third bedroom and a full bath. The sales sheet says the house is for sale “as is” and promotes it as a “perfect starter home.” “Who doesn’t want to be this close to downtown Bethesda?” agent Mynor Herrera of Weichert Realtors asks at a Sunday open house. “Unfortunately, when this house came on the market, it was the beginning of the credit crunch.”
The house was first listed last August at $619,000.A contract on the house in early November fell through. By mid-December, the price was down to $539,000. Then, in January, the price was increased to $550,000. “There is the promise of something just after the holidays,” Herrera says about the higher price. But, on Jan. 18, Herrara said the owners are “reconsidering their options and may revert it back into a rental.”
The price is negotiable
A four-level split on Belhaven Road in the Ashburton neighborhood off Old Georgetown Road, just outside the Beltway, attracts several house shoppers to an open house on the Sunday before Christmas—but no one makes an offer. The owner relocated to Montreal, and the house is priced at $625,000.
“It’s a very weak market,” says Bressler, the listing agent. “There are a lot of people interested in purchasing, but they are scared…of what the future will bring. … Today, every house is negotiable.”
Should buyers wait for prices to drop even more? “That’s the wrong attitude,” Bressler says. “If you intend to live in a house for many, many years, unless you’re a foreign diplomat or will stay only three years, it’s not worth the wait. It might go down 5 percent, so big deal, it doesn’t mean anything. If there’s a house you like, go for it.”
Bressler says he got one ridiculous offer on the house—$550,000 cash, and then another offer that seemed promising. But the buyer said he had lost a lot of money in the market and didn’t have the down payment.
Sellers are also difficult these days. “Sellers have to be reasonable,” Bressler says. “They should go back four years, see what the [then comparable] price was, and ask that, with still the possibility of lowering further.” After the December open house, Bressler tried to convince the seller to lower his price. “He’s not very warm to the idea,” Bressler says. “He thinks that people will still make an offer. He doesn’t believe people need to be encouraged by lowering the price.” So far, there haven’t been any offers worth considering. The seller, who paid $249,000 in 1992, has lots of equity, is renting in Montreal, and wants to wait for a buyer willing to meet his price.
Traffic is good at another open house on Edgevale Court in Chevy Chase, close to Columbia Country Club and the Capital Crescent Trail. From the outside, the 1950s brick rambler, newly on the market and listed for $674,800, is nothing special. “DON’T JUDGE THIS BOOK BY ITS COVER!” screams the flier. Inside: a stunning living/dining room with a high cathedral ceiling, skylights and a picture window overlooking an impressively landscaped and terraced yard.
Ira and Tamara Gordon, ages 30 and 29, respectively, recently arrived from California. He’s a National Cancer Institute researcher; she’s a business reporter for National Public Radio. They are renting and in no hurry to buy; they sold their home in California for $405,000, $25,000 less than they paid for it three years earlier. They like the Edgevale Court house, but they aren’t making any offers.
“Our real estate agent tells us we have the luxury of waiting for the perfect house, because in this market you don’t have to bid, you don’t have to compromise,” Tamara says. “I just did a story [for NPR] on whether people are waiting for 4.5 percent interest. The answer is, nobody’s motivated. …A lot of people are holding back.”
‘A frustrating process’
Brian Connolly wasn’t holding back. He and his wife had been eagerly house-hunting all fall. “All my family is in Chevy Chase; I grew up on East Irving Street,” says Connolly, 32,who was hoping to buy the brick colonial on Greenway Drive near Friendship Heights. His wife teaches public school just across the Chain Bridge in McLean, Va., and Connolly’s office is in Tysons Corner.
“We’re trying to get this thing closed,” he says. “I’ve detached myself from it emotionally. The first house [off East West Highway] was a roller coaster, trying to get it under contract and not have it accepted. It’s been a frustrating process. For my wife, more so. She becomes more attached to them. We’re kind of fed up with the process and want to move forward.”
The three-bedroom house on Greenway Drive, which sold in 2002 for $545,000, first went on the market last July for $850,000. After two and a half months, the price was lowered to $749,000. Two weeks later, it dropped to $700,000. The Connollys offered $672,000 and got themselves a home.
“It’s a much tighter market than the economy led us to believe,” Connolly says. In the Bethesda-Chevy Chase area, he adds, “There are not a lot of people putting their houses on the market. I think a lot are waiting for spring and to see where we are then.” But for Brian and Laura Connolly, at least, the waiting ended on Dec. 19. That was the day they went to settlement. They moved into their new home soon after the inauguration of the new president.
Eugene L. Meyer, a former Washington Post reporter and editor, is a contributing editor for Bethesda Magazine.