News Articles, 1998
  News Articles, Main Page

Home Buyers Closing In
Sales Soar in District, Nearby Suburbs

By Caroline E. Mayer
Washington Post Staff Writer
Sunday, March 1, 1998; Page A01

When Kathy and Todd Allgire bought a new colonial on a third-of-an-acre lot in Centreville five years ago, they could never imagine moving again.

"The house had everything we wanted -- a big home on a beautiful lot with lots of trees and flocks of bluebirds nesting in our back yard," Kathy Allgire recalled.

But then, her commute into Washington began to grow, from 45 minutes in 1993 to 90 minutes "on good days" last year. "I was miserable. I spent all my time in traffic and didn't have any time to enjoy the wonderful house," she said.

So last summer the Allgires sold their home -- taking a $20,000 loss -- and moved to Arlington, 23 miles closer to the District. "It was a wrenching decision, but life's too short to spend it in traffic," said Allgire, whose commute is now 20 minutes -- on a bad day.

Joseph and Ina Young also have decided to move closer to the District. Although they love their Bethesda town house just outside the Capital Beltway, they want to walk to stores, restaurants and movies. So the Youngs bought a town house, now under construction in downtown Bethesda. "We liked the idea that we don't have to take our car out all the time to do everything," said Young.

Apparently 16 other home buyers had the same idea. There are 17 town houses being built in the Youngs' development and all were sold last September -- less than a month after the $400,000 houses were put on the market.

"It was unbelievable," said developer Lenny Greenberg.

Washington area real estate agents, however, were not surprised. Although home sales are picking up all over the region -- thanks to low interest rates and continued confidence in the economy -- business has been the briskest in the District and close-in suburbs.

Joyce Ellwanger, an agent with Weichert Realtors Inc., spotted the difference immediately when she transferred from Weichert's Potomac office to the Bethesda branch last September. "I'm just astounded how much more activity there is in close-in areas," Ellwanger said. "The number of calls to this office is quadruple what we get in Potomac and the number of people coming to open houses is too. The same weekend, we may have seven people show up for a house in Potomac, we'll see 27 in Bethesda."

Even more significant to sellers are the multiple contracts being offered for Bethesda houses. "We haven't seen those in Potomac, Gaithersburg or any place further out," Ellwanger said.

The story is the same in Northern Virginia, noted Glenn Lewis, an agent in the Alexandria office of McEnearney Associates. "You can have a house for sale in South Alexandria -- in the subdivisions off the George Washington Parkway -- and it could sit 60 to 90 days before it sells even though it may be very nice," Lewis said. However, a house in the same price range, but probably smaller in size, will sell in 30 days or less in the city of Alexandria, Lewis said. "People are going for location and convenience over size."

Home sales data confirm the trend, with the District and close-in suburbs reporting double-digit sales increases. Compared with 1996, sales in 1997 in the District were up the sharpest -- 31 percent -- while sales in Arlington County and Alexandria were up 17.7 percent. By contrast, sales were up only 6.3 percent in Fairfax County and 4.9 percent in Prince William County.

The exception was Loudoun County, where sales climbed by 16.3 percent -- a reflection of the heavy building boom taking place in several new planned communities there.

On the Maryland side, sales were up 10.25 percent in Montgomery County overall. However figures from the Metropolitan Regional Information Systems, which runs the multiple-listing system, show larger sales increases in the suburbs closer to Washington. Sales in Bethesda, for example, were up 35.3 percent, while sales in Germantown were up 18.8 percent.

In Anne Arundel County, sales were up 9.3 percent over 1996; in Howard County, a 5.7 percent increase was posted.

Despite Prince George's County's proximity to the District, it was the only jurisdiction in the area to post a drop -- 3.8 percent -- in home sales last year. Agents said that may be because of the recent rash of negative reports about the county schools.

Jenny Jin and her husband, Wei Ding, learned firsthand how much faster sales are the closer the house is to the District line. The family moved to Bethesda from Gaithersburg last weekend, hoping to cut Ding's commute downtown. "Sometimes it took him an hour and a half to get to work," Jin said.

When Jin and Ding found the house they wanted in Bethesda, they made a bid just days after the house went on the market. "We were afraid we might lose that house," said Jin. But their Gaithersburg home, which went on the market in November, remains for sale. "If this house was in Bethesda, it definitely would have been sold by now," Jin said.

The steady sales in the close-in suburbs means that buyers and sellers could see some price increases "inside the Beltway," said Peter P. Rucci, executive vice president of Weichert. "The problem is going to be inventory -- too many people are out there looking at too few houses," Rucci said.

A number of factors are driving buyers closer to the city. John Tucillo, a consulting economist for the National Association of Realtors, cites the healthy economy and stock market. "It's the wealth effect; people have seen their portfolios go up and what they are doing is diversifying some of that into houses. They have some way of affording" the more expensive houses in the close-in suburbs, Tucillo said.

Yet some agents say the lackluster sales of 1995 and 1996 have made sellers more realistic in setting prices -- making some houses, particularly those in the District, a good value to buyers. While prices of new homes in the outlying suburbs rose slightly last year, prices of existing homes remained stable, making them all that more attractive.

"Realistic pricing by sellers is one of the key factors in the substantial upturn of sales," said Peter Clute, an agent with Pardoe Real Estate Inc.'s Georgetown office. In fact, Clute said, "the major reason" any home is not selling in the District is that "it's priced too high."

Who are the sellers? Agents say many are retirees or elderly residents moving to retirement communities. Still others are families relocating to other cities for different jobs, or couples divorcing. Another group is buying new and larger homes, with about half staying in nearby neighborhoods and half moving further out, willing to endure a longer commute for a larger house.

Lower prices in the District are the chief reason that Barbara and Stephen Tawes decided to buy a house in the city, just off Chevy Chase Circle, when they moved from north Rockville. The Taweses looked at houses in Maryland and the District before buying their house for $322,000. A similar house "would have cost at least $400,000 in Bethesda," Barbara Tawes said.

But ask anyone who's moved closer to town or into the District, and they'll say it's not economics but rather lifestyle issues -- a shorter commute or the ability to walk to neighborhood shops and restaurants -- that prompted their decision.

Steve and Ann Lindblom, for example, moved from Springfield to the new Old Town Village development in Alexandria "to be closer to the things we like to do -- the restaurants, the bars, the fun activities, the biking and hiking trails," Steve Lindblom said. With their three children "grown and out of the house," the Lindbloms wanted a more active lifestyle -- and that's certainly what they've had ever since they moved last December. "We're out at least once every weekend and twice during the week. Before, it was once every two to three weeks, and only on the weekend."

For Maureen Keenan, it was her commute -- which had grown from 40 minutes to more than an hour -- that led her to move from Herndon to Arlington last June. A shorter commute meant smaller space. Keenan and her partner, Wendy Webb, traded their 3,000-square-foot town house for a 1,000-square-foot condominium, but that's fine with Keenan. "I've gotten my life back," Keenan said. "We can eat dinner at a reasonable hour, exercise and do things we couldn't do in Herndon."

The increasing demand for homes close in is even attracting home builders who have traditionally spent most of their time and money building homes farther and farther out.

"Supply is low and demand is consistent," Rick DiBella, president of the Washington division of Pulte Home Corp., the nation's largest home builder, said of the market of close-in neighborhoods. Earlier this month, Pulte opened a new community, Overlook, near the I-395 and Edsall Road interchange inside the Beltway in Northern Virginia. Within two weeks, 14 units had been sold. "People like the proximity to Washington and there's no substitution for it," DiBella said.

No builder has taken better advantage of the demand for close-in housing than the small firm of Eakin/Youngentob Associates, which has built 12 urban communities, mostly town houses, in Alexandria, Arlington and the District.

Urban communities are not for everybody, said President Robert Youngentob. "Some people -- particularly families -- still want a big yard and the serenity and peacefulness of the large lots in the suburbs. Still, it's our belief that the urban community market will continue to grow as traffic worsens and leisure becomes more important."

The Washington Post Newspaper Homepage