THE $200,000 QUESTION
Do cheap, livable one-bedrooms exists in the D.C. area? We find out

MARGE FAHEY
WASHINGTON POST EXPRESS
Friday, March 26, 2004; Page E6

HOME HUNTING - It could be worse. You could be trying to buy a condo in Manhattan. Just keep repeating to yourself, $300,000 for a dinky studio.

With that in mind, the D.C. market - overheated, fiercely competitive and expensive - seems more manageable.

Embolded, we asked a daring question: Where can you buy a one-bedroom condominium in D.C. area for $200,000 or less - and still take the Metro to work?

Plenty of neighborhoods qualify, but what you'll find depends on how much you're willing to give up. You will need to consider older buildings and the higher condo fees that come with their increased maintenance needs. Smaller spaces. Developing neighborhoods. Or the ultimate compromise: No washer and dryer.

And you'll need to be ready to fight.

"Inventory is not coming on fast enough to meet the demand," says Nancy Itteilag of Long and Foster's Foxhall office. "You need to look at it like getting a job." That means dogged persistence because, odds are, "you are going to lose the first three to five properties you go after."

When you see something you want, the ability to act fast is critical. " Find a way to buy it now because every month you wait it keeps going up," says Neil Bacchus of Weichert Realtors' North Bethesda-Rockville office.

If you're serious about buying, obtain a commitment letter from a lender before beginning your search. Be prepared to deal with multiple offers and to put contracts on more than one property before you are the winning bidder. And be willing to offer full price - or more - and accept "as is" condition.

Agents say many buyers are employing more extreme strategies such as waiving the appraisal value (which means you'll have to come up with the cash to fill the gap between the appraised value and the selling price), eliminating a home inspection and even allowing the seller to stay rent-free for several months.

Another reality of today's market are escalation clauses, which Tom Murphy of Coldwell Banker's Georgetown office says are "absolutely essential if you expect to win anything." An escalation clause means a buyer will go a certain amount of money above any other offer, not to exceed a certain cap.

So take a deep breath, and let's practice: "$300,000 for a dinky studio."

The District
You'll be hard-pressed to find the $200,000 -or - less one-bedroom in upper Northwest. "Efficiencies in popular buildings are selling in the $180,000's and higher," says Murphy. " I have seven to eight buyers for any apartment that may come on the market for any neighborhood in Northwest." He cites a Foggy Bottom efficiency priced at $165,000; it had 12 offers and sold for $185,000.

The best values in upper Northwest (or anywhere in D.C., really) are in unrenovated buildings 25 to 75 years old, says Itteilag. You may have to spend money and elbow grease to make it your own, however, if you're willing to put in the hours at Home Depot, a small space can be renovated for $7,000 to $15,000, she says.

Though there are a number of new condominium complexes going up in the rapidly developing neighborhood of Columbia Heights, they're not cheap - think $450 a square foot. But " there's a chance that it's still possible to find a one bedroom for $200,000 or less" in an older building that's being converted to condos, says Murphy.

The prices in Columbia Heights are driving buyers farther east. " People are moving into Shaw who five years ago would never have considered it," says Murphy. But Dale Mattison of Long and Foster's Chevy Chase office says that even Shaw is becoming unaffordable. " You have to go into neighborhoods that have long been considered more modest working class communities."

These are neighborhoods such as Petworth, off Georgia Avenue in Northwest; Hillcrest, south of Pennsylvania Avenue in South East and near the Maryland border; Deanwood, in Northeast past RFK Stadium; and Old city, which surrounds the Capitol. Mattison says many of these areas are "good clean working class communities and as long as you take appropriate safety precautions you should be able to feel comfortable."

In Hillcrest, for example, the 35 units at Penn Circle Condominiums will be priced at $200,000 or less. Mattison says he expects the complex to sell out in the course of an afternoon when it comes on the market in the next three to four months. (Interested parties: The building is located at 27th and Pennsylvania Avenue in Southeast.)

"Petworth is an upcoming neighborhood and there area lot of condo projects coming up in the spring and summer," says Taiwo Demuren of Re/Max One in Bowie. In Petworth's Kennedy Flats, a 1960s rental building in the 600 block of Longfellow Street, 32 condominium units priced under $200,000 sold out in a single Sunday. " Anything under $200,000 is going to sell immediately," Mattison says.

Alisa Lewis, a 32-year-old first-time buyer, recently purchased an 865 sq. ft. two-bedroom, two-bath condominium in the Petworth area for $205,000. She was outbid on properties in Columbia Heights, Mount Pleasant and Northeast.

"Petworth wasn't my first choice of where to live," she says, though she's happy with her decision. " For what I wanted, I couldn't find the price in Columbia Heights or Mount Pleasant."

Southwest is on the verge of not being affordable, says Mattison. But Murphy of Coldwell Banker says southwest is underpriced relative to the market. Another drawback of Southwest for first time buyers is that a number of the older buildings are co-ops, which require large down payments.

Virginia
Many first-time buyers find that they can't afford to stay in the areas in which they've been renting. June Chokechaitanasin, a 26-year old first-time buyer, started her search in Bethesda, where she currently rents. " I was actually looking about two years ago when it was affordable. I looked back at the same places and everything went up about $80,000."

She started looking in Arlington, hoping to find a newer building but soon realizing that " anything built in the last three years is just out of my price range." She purchased a 725 sq. ft. one-bedroom, one bath unit in a 46-year-old building for $165,000 in South Arlington, a 15 minute walk from the Ballston Metro. " As a first-time buyer, what scares me is the most recent purchase in my building was a year ago and I paid $40,000 more."

Marion Cloud of Re/ Max Allegiance in Alexandria says that Arlington is one of the closest areas to the Metro with properties under $200,000. " It's a tough market; be prepared to spend more than they're asking for." Cloud says the Arlington Oaks complex in South Arlington is reasonably priced, with one-bedroom units ranging in cost from the $170,000s to $190,000s. Other affordable complexes include The Carlton, off Columbia Pike; Westmoreland Terrace and River Place Cooperatives in Rosslyn; Stratton House near Route 50 and Glebe Road; and Belle View in Mount Vernon.

Karrina Brown of Taylor Brown Real Estate Services in Alexandria says the Landmark area and the Mount Vernon area are also still affordable. Cheaper condos are moving fast, though: She estimates that 80 percent of properties under $200,000 are on the market for fewer than five days. The Columbia Pike area of Arlington and Kingstowne in Alexandria are good spots to look as well.

Maryland
After spending four months looking every weekend and being outbid on four offers, David and Angela Cessor-Culver bought in Prince Georges County. They first looked without success in Bowie, where they live; then the couple searched the entire Metro area for " any place I had access to a Metro Station," says David Cessor-Culver. " We did look closer in and the couple we were able to afford were snatched up or got out of our price range."

Months later, they looked again in Bowie - and purchased a brand new 1.100 sq. ft. two-bedroom, two bath condominium for $180,000, about a 10-minute drive from the New Carrolton Metro Station. " There's not many places a middle-class family can afford," Cessor-Culver observes. "You will have to settle for something smaller."

In Montgomery County, the trend for the past two years has been an increase of approximately 1 percent per month in the price, says Bacchus of Weichert Realtors. " There are certain areas in Rockville where you can get a one bedroom for under $200,000." He mentions Bethesda Park condominiums (despite the name, they're in Rockville), which range in price from $180,000 to $198,000, and the Americana Center Condominiums on Monroe Street in downtown Rockville.

Bacchus recommends buying a smaller unit as close to the city as possible. " It will increase (in value) a lot quicker that if you are further out."

In Silver Spring and Takoma Park, too many buyers are chasing too few properties. In Silver Spring, three to seven contracts are received for every listing sold, says Angela Efantis of Long and Foster's Silver Spring - Kensington branch. " I have been in the business 29 years and have never seen anything like this."

Though the condo market is thin in Takoma Park, says David Maplesden of Long and Foster's Takoma Park Office, you can still find one and even two-bedroom condos for under $200,000. They sell very quickly, however. Recent sales include a one-bedroom for $115,000 and another for $144,000.

Maplesden says multiple offers and escalation clauses are standard in the area. " The people that are winning are those that can pay cash above the appraisal. If you are a first-time buyer with limited resources, it's a very difficult market." Take a deep breath. And just remember: "$300,000 for a dinky studio."

Articles appear as they were originally printed in The Washington Post and may not include subsequent corrections.