Local History of Logan Circle
The Logan Circle neighborhood, on and around the circle at the intersection of Vermont Avenue and 13th Street, N.W., is almost a textbook illustration of the beauty of the L’Enfant Plan’s vision for the evolution of the federal city. At the point where a diagonal state-named street crosses the underlying grid pattern of numbered streets, the creation of a large open urban space (the circle itself) is the focus of a graceful residential area. In the case of the Logan Circle historic district, whose late 19th-century character is preserved almost intact, the elegance and simplicity envisioned by L’Enfant and implemented by his successor Andrew Ellicott can be seen today.
This neighborhood, very close to downtown, is a delight for the pedestrian. Almost all the townhouses that line the circle and the streets radiating from it were built between for their prosperous owners between 1875 and 1900 in the Late Victorian and Richardsonian architectural styles. While the houses are varied in detail, displaying a fascinating array of turrets, porticos, and roof lines, their unity of scale and character give Logan Circle a unique charm. Visitors can easily imagine that they have gone back in time to the century before last. The neighborhood was originally very fashionable. After falling on hard times, it is now a hive of revitalization and once again becoming a prized place to live.
A bronze equestrian statue of Union Major General John Logan is in the center of the circle. Logan, who also represented Illinois in the House of Representatives and the Senate, is buried in the Soldiers’ Home National Cemetery. As commander in chief of the veterans’ organization, the Grand Army of the Republic, Logan began the practice of putting flowers on the graves of the Civil War dead, an observance that led to the establishment of May 30th as the national Memorial Day.
South of Logan Circle, at 1318 Vermont Avenue, is the Mary McCleod Bethune Council House, a grand Second Empire house that was the headquarters and sometime home of Mary McCleod Bethune, founder of the National Council of Negro Women. An educator and national political leader, Bethune was one of America’s most influential African American women. The house, a National Park Service site, is now a museum and archives and an important place for studying the history of African American women and the black community.
Logan Today
These days, the Victorian-architecture-filled zone could be called Condo Central, with loft-apartment buildings going up on what seems like every block. And it's no wonder people want to lay down urban roots here: Some of D.C.'s hippest cafes, shops and theaters line 14th Street Northwest and surrounding blocks.
As areas to the west (Dupont Circle, Georgetown) became too pricey and developed, Logan Circle once again became a desirable zone. Neighborhoods to the south, west and north of Dupont Circle were all already well-established at that time, and Logan's close-in location made it an obvious choice for developers.
"Logan Circle remains a trendsetting market due to the smaller boutique-style buildings and location," said Mark Franceski, an analyst for a market research company in Alexandria. Logan's proximity to downtown, Dupont, U Street and the business districts of McPherson Square and K Street make it attractive to professionals looking to live close to work. Residents and business owners also cite the appeal of the Whole Foods grocery on P Street Northwest, which has become an ad-hoc town center for everyone from taxi drivers to moms and kids on play dates. Plus there are countless other city-cool shops and restaurants.
But architecture may be what truly sets the area apart. Late 19th-century town houses, the finest of which ring the circle itself, now mingle with modernist lofts and early 20th-century storefronts. "Washington, as a city, just has such great bones," said Scott Pannick, president of Metropolis Development, the company behind the condo complexes the Metropole and the Cooper Lewis, two hot properties on P Street Northwest between 14th and 15th streets. "Much of the original architecture is intact, and restoring the existing buildings has been paramount in the neighborhood's renaissance."
This rampant gentrification -- and Logan Circle's increasing prestige as an address -- has blurred the boundaries of the neighborhood, especially to the east. But the Logan Circle Community Association (LCCA) continues to define the neighborhood as the area between 10th and 16th streets Northwest, running north-south from S to O streets.
And condos, many of them quite luxe, have been a big part of Logan's rebirth. Take the Metropole, Metropolis Development's latest venture at 1515 15th St. Northwest. Metropolis has designed other area buildings, but the Metropole may be the showiest, with its illuminated glass tower rising at 15th and P streets Northwest. Among the amenities: an interior courtyard, full concierge service, the on-site, state-of-the-art gym Vida, and guest suites for out-of-town friends and family of residents. Developers hope these perks make the building stand apart from its many, many neighbors.
"It's a changing marketplace. Buyers today are more able to differentiate between different developers and different products," said Pannick. "Originally, the focus was on the fact that 14th Street was a bit edgy and cool. Now we're dealing with a more sophisticated marketplace. Every unit has got to have a 'wow' factor."
And like many newer projects, the Metropole trends away from the loft apartments which originally appeared in the neighborhood, said Pannick. "We're headed toward more traditional layouts. What we're going to go toward is buildings that have smaller units and more amenities -- more public spaces, things like that. We think people are a little past the loft concept." Metropole offers 630- to 2,400-square-foot units, which are available as single- and two-story floor plans. Prices began in the $300s, with the first units delivering in 2007.
Other showy developments include The Matrix (1529 14th St. NW), a rehabbed building from the Holladay Corporation that will bring more retail to 14th Street on its lower floors. Residents get to live behind a historic facade in 44 units with ultra-mod appliances and floor plans. Prices range from the $400s to the $700s for 700- to 1,700-square-foot flats. For even fewer neighbors, Logan Row, in the 1400 block of 11th Street Northwest, boasts only 28 units in a complex that merges renovated historic buildings with new construction.
One of the first companies to start putting up condo complexes in Logan in the early 1990s was Abdo Development. "It had a real stigma attached to it," said Jim Abdo, president and CEO of Abdo. "Logan Circle was an area of significant transition, and there wasn't a lot of confidence in this area. My vision was to re-establish the housing and the retail corridor."
Abdo, in particular, began renovating the vacant space already available, mostly repurposing early 20th-century townhouses and apartment buildings. Condo projects included The Willison (1425 Rhode Island Ave. NW) and The Ashton and The Dalton (both at 14th and Q streets Northwest). Like a sign of things to come, ragged, often-decrepit buildings morphed into sleek lofts.
These redos were all part of an attempt to balance historic preservation with the growing market for urban living spaces fed by yuppies, empty nesters and gay couples. "We didn't want to just build residences or businesses; we wanted to build communities," said Abdo.
"Gentrification doesn't have to be an evil thing. It can be a good thing provided there's an inclusive approach. That means jobs and opportunities for small businesses."
This ability to renovate "found space," as Studio Theatre Artistic Director Joy Zinoman calls it, is why her then-upstart theater company moved into a shabby warehouse on Church Street in 1980, converting it from a hot-dog cart storage center into a performance space.
These days, Studio is far from fledgling. Its sleek, glass-walled four-theater venue in a former auto showroom sits at the corner of 14th and P streets Northwest, a kind of cultural capstone to the ever-more-artsy neighborhood. "We're a deeply urban theater and the building is a reflection of that," said Zinoman.
Zinoman and her fellow theater folks were really the first organizations back on the block after the 1960s riots. Groups that made their homes here included the Woolly Mammoth Theatre Company (now relocated to Penn Quarter) and the now-defunct, fringy Source Theatre. The latter's black-box building at 1835 14th St. NW was recently saved from being converted into a pool hall by the Cultural Development Corporation, a local arts advocacy group that plans to run it as a performance center.
Living in a zone that mingles fresh complexes with older businesses and architecture appeals to many residents. "There are a lot of other neighborhoods that are being developed and coming up, but this neighborhood is particularly appealing because of the new mixed with old," said Philippa Hughes, 37, who bought a condo in the Metro complex on Church Street in December 2003, moving in when the building was finished in late 2004.
That melting-pot feel also means home-decor businesses are opening up almost as fast as developers put up "for sale" signs. Last year, Kimberly Hessler relocated her Reston, Va.-based Asian import store, Dragonfly Design and Decor, to a former auto repair shop between 14th and 15th streets Northwest on Church Street. In a space with exposed brick walls and a showy skylight, Hessler shows off Qing dynasty altar tables and gilded Buddhas, which she said look swell in the surrounding modern lofts. "We get a lot of condo buyers, because our pieces mix so well with the contemporary homes," said Hessler, who, like many Logan Circle business owners, also lives in the area. "Most likely, you're going to furnish your place with modern, sleek designs. When you incorporate an older piece, it provides some warmth and an element of surprise," said Hessler. "What's unique about Logan is that there's always a new restaurant or new boutique open, so you can stay in a four- or five-block radius and meet all your needs."
Other businesses thriving here include P Street's Logan Hardware (1416 P St. NW) and a slew of art galleries. Annie Gawlak, owner of G Fine Arts (1515 14th St. NW), set up shop here in 2001 because she saw so much else going on. "The neighborhood is vibrant, and there's a real love for the arts community," she said. Her gallery's stock features young, cutting-edge artists, which seems on target for this neighborhood.
Some days, Logan Circle also feels like one of the final frontiers for mom-and-pop shops, albeit sophisticated ones. Besides Hessler's Zen den, residents enjoy browsing at Candida Mannozzi's travel bookstore, Candida's World of Books (1541 14th St. NW) and Reincarnations (1401 14th St. NW), a furniture store with dramatic, yet well-priced chaises, gilded mirrors and statues. At the edge of the neighborhood, between R and S streets Northwest, one of the city's most vibrant blocks holds Garden District (1801 14th St. NW), an urban plant store, Muléh (1831 14th St. NW), a chic clothing and furniture shop, and several other businesses.
Many residents and business owners point to the addition of Whole Foods in December 2000 as the moment when Logan turned from edgy to livable. "Before we opened the store, that whole corridor was quite dark at night. It was almost as if the neighborhood had two different profiles, one during the day and one at night," said Sarah Kenney, Director of Marketing for the Mid-Atlantic region for Whole Foods. "The first day we opened, that night, the streets were literally full of people. People want to be able to walk out at 9 at night and get an ice cream cone."
New residents are attracted to Whole Foods for its stock of French wines and Maryland organic veggies, but longtime Logan and Dupont Circle dwellers themselves helped bring the cavernous gourmet grocer to the area. "They went out of their way to reach out to Whole Foods, to tell the story of Dupont and Logan, and whenever there is a group that is that passionate, it's hard to say no," said Kenney.
This cohesive community spirit is no accident: The Logan Circle Community Association is one of the most active residents groups in the city. In addition to art events and Memorial Day celebrations -- Maj. Gen. Logan was the grandfather of the holiday -- the association organizes popular summertime jazz concerts in Logan Circle.
Overall, the personal investment of this diverse group makes the neighborhood a warmer place to live. "Everyone knows each other, and you always run into people," said Jennifer Trock, President of the LCCA (and neighborhood condo owner). "It's such a changing neighborhood and people are invested in it. You have a real opportunity here to be part of where the neighborhood is going."
And look for continuing changes and additions to the neighborhood. "As soon as you get over [to 14th Street Northwest], you can build up to seven stories," said Trock. "It has to do with the zoning of 14th Street, really, the street is zoned for 7,500 square feet and very few buildings are that tall. If I say to somebody 'I'm looking at land on 14th Street,' they'll say, 'Oh, isn't that already all built up?' And my response to that is that we've barely started."
Hughes also detected the area's strong civic spirit when she moved into the area. "I figured Logan would be the typical urban environment where you don't even say hello to people in the elevator," she said. "It turns out it's really easy to get involved on the condo boards or organizing activities on our street."
"The people who move here are very like-minded," said Hughes. "We're people who appreciate art and good food, those kinds of things."
Thursday, October 25, 2007
A Neighborhood to Check Out - SHAW
Shaw is a rapidly gentrifying neighborhood in central Washington, D.C., roughly bounded by M Street NW to the south; New Jersey Avenue NW to the east; Florida Avenue NW to the north; and 11th Street NW to the west--although there is a westward panhandle that extends to 16th Street between S Street and Florida Avenue. Shaw once included the areas of smaller neighborhoods, such as Logan Circle and Truxton Circle, but in recent years those neighborhoods have grown into their own and become separate from Shaw.
History
Shaw grew out of freed slave encampments in the rural outskirts of Washington City. It was named after Civil War Colonel Robert Gould Shaw, the commander of the 54th Massachusetts Volunteer Infantry.
Shaw thrived in the late 19th and early 20th centuries as the pre-Harlem center of African-American intellectual and cultural life. Howard Theological Seminary received its first matriculates in 1866; by 1925, Professor Alain Locke was advancing the idea of "The New Negro," and Langston Hughes was descending from Le Droit Park to hear the "sad songs" of 7th Street. The most famous Shaw native to emerge from this period—sometimes called the Black Renaissance of DC—was Duke Ellington.
Following the assassination of the Reverend Martin Luther King, Jr., on April 4, 1968, riots erupted in many D.C. neighborhoods, including Shaw, Columbia Heights, and the H Street NE Corridor. The 1968 Washington, D.C. riots marked the beginning of a decline in population and development that would condemn much of the inner city to a generation of economic decay.
Shaw, like Logan Circle, is a mostly residential neighborhood of 19th century Victorian row houses. The allure of these houses, Shaw's central location, and the booming D.C. housing market have begun to transform Shaw through gentrification. According to Census records from 1970, 92% of Shaw's residents were black; in 2000, 56% were black. Shaw's notable place in African American history has made the recent influx of affluent professionals particularly controversial.
Infrastructure and landmarks
Shaw is served by the Mt. Vernon Square Metro, Shaw/Howard Univ and U St/African-Amer Civil War Memorial/Cardozo Green Line Metro stations.
Shaw's landmarks include Ben's Chili Bowl, the Lincoln Theatre, and the north portion of the Washington Convention Center.
History
Shaw grew out of freed slave encampments in the rural outskirts of Washington City. It was named after Civil War Colonel Robert Gould Shaw, the commander of the 54th Massachusetts Volunteer Infantry.
Shaw thrived in the late 19th and early 20th centuries as the pre-Harlem center of African-American intellectual and cultural life. Howard Theological Seminary received its first matriculates in 1866; by 1925, Professor Alain Locke was advancing the idea of "The New Negro," and Langston Hughes was descending from Le Droit Park to hear the "sad songs" of 7th Street. The most famous Shaw native to emerge from this period—sometimes called the Black Renaissance of DC—was Duke Ellington.
Following the assassination of the Reverend Martin Luther King, Jr., on April 4, 1968, riots erupted in many D.C. neighborhoods, including Shaw, Columbia Heights, and the H Street NE Corridor. The 1968 Washington, D.C. riots marked the beginning of a decline in population and development that would condemn much of the inner city to a generation of economic decay.
Shaw, like Logan Circle, is a mostly residential neighborhood of 19th century Victorian row houses. The allure of these houses, Shaw's central location, and the booming D.C. housing market have begun to transform Shaw through gentrification. According to Census records from 1970, 92% of Shaw's residents were black; in 2000, 56% were black. Shaw's notable place in African American history has made the recent influx of affluent professionals particularly controversial.
Infrastructure and landmarks
Shaw is served by the Mt. Vernon Square Metro, Shaw/Howard Univ and U St/African-Amer Civil War Memorial/Cardozo Green Line Metro stations.
Shaw's landmarks include Ben's Chili Bowl, the Lincoln Theatre, and the north portion of the Washington Convention Center.
Wednesday, October 24, 2007
AGENCY IN A NUTSHELL
UNDERSTANDING AGENCY
Agency is a legal relationship between a principal (client/buyer) and an agent (the broker and salesperson) that arises when the principal delegates authority to the agent to perform acts on the principal’s behalf and the agent consents to the delegation. An agency agreement should be in the form of a written contract.
Types of Agency-Brokerage Relationships With Consumers
Seller’s agent.Also known as a listing agent, a seller’s agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is evidenced by a listing contract. Once a property is listed, the seller’s agent either can attempt to sell it or, in addition, may be permitted by the seller to cooperate with another licensee who will attempt to find a suitable buyer for the property, A seller’s agent negotiates the best possible price and terms for the seller. The agent represents the seller's best interest throughout the transaction.
Buyer’s agent. A real estate licensee is hired by a prospective buyer as an agent to find an acceptable property for purchase and to negotiate the best possible price and terms for the buyer. The agent represents the buyer's best interest throughout the transaction. The buyer can pay the agent directly through a negotiated fee, or the buyer’s agent may be paid by the seller or a commission split with the listing agent. In this area, buyers agents typically are paid at settlement through the commission split, so you get great representation without having to dig into your pocket!
Subagent. A cooperating agent who works for a listing broker-salesperson in the sale of a property. The subagent represents the seller, and therefore, works with the buyer, but not for the buyer. The subagent owes fiduciary duties to the listing broker and to the seller. Although subagents can’t assist the buyer in any way that would be detrimental to their client the seller, a buyer-customer working with a subagent can expect the subagent to treat him honestly. A subagent generally may provide the buyer with certain types of services, often called ministerial services, which are factually based and do not require the licensee’s judgment.
Disclosed dual agent. Dual agency is a relationship in which the brokerage represents both the buyer and the seller in the same real estate transaction. Dual agency relationships don’t carry with them all of the traditional fiduciary duties to the clients; instead, dual agents owe limited fiduciary duties. The fiduciary duty of loyalty to the client is limited. This focuses on confidentially and the negotiation process. Because of the potential for conflicts of interest in a dual agency relationship, it’s vital that all parties to the dual agency relationship give their informed consent. In many states, this must be in writing. Disclosed dual agency is legal in most states.
Agency is a legal relationship between a principal (client/buyer) and an agent (the broker and salesperson) that arises when the principal delegates authority to the agent to perform acts on the principal’s behalf and the agent consents to the delegation. An agency agreement should be in the form of a written contract.
Types of Agency-Brokerage Relationships With Consumers
Seller’s agent.Also known as a listing agent, a seller’s agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is evidenced by a listing contract. Once a property is listed, the seller’s agent either can attempt to sell it or, in addition, may be permitted by the seller to cooperate with another licensee who will attempt to find a suitable buyer for the property, A seller’s agent negotiates the best possible price and terms for the seller. The agent represents the seller's best interest throughout the transaction.
Buyer’s agent. A real estate licensee is hired by a prospective buyer as an agent to find an acceptable property for purchase and to negotiate the best possible price and terms for the buyer. The agent represents the buyer's best interest throughout the transaction. The buyer can pay the agent directly through a negotiated fee, or the buyer’s agent may be paid by the seller or a commission split with the listing agent. In this area, buyers agents typically are paid at settlement through the commission split, so you get great representation without having to dig into your pocket!
Subagent. A cooperating agent who works for a listing broker-salesperson in the sale of a property. The subagent represents the seller, and therefore, works with the buyer, but not for the buyer. The subagent owes fiduciary duties to the listing broker and to the seller. Although subagents can’t assist the buyer in any way that would be detrimental to their client the seller, a buyer-customer working with a subagent can expect the subagent to treat him honestly. A subagent generally may provide the buyer with certain types of services, often called ministerial services, which are factually based and do not require the licensee’s judgment.
Disclosed dual agent. Dual agency is a relationship in which the brokerage represents both the buyer and the seller in the same real estate transaction. Dual agency relationships don’t carry with them all of the traditional fiduciary duties to the clients; instead, dual agents owe limited fiduciary duties. The fiduciary duty of loyalty to the client is limited. This focuses on confidentially and the negotiation process. Because of the potential for conflicts of interest in a dual agency relationship, it’s vital that all parties to the dual agency relationship give their informed consent. In many states, this must be in writing. Disclosed dual agency is legal in most states.
Make Your Offer the One They Take
Developing a Winning Offer
Some factors to consider in setting an offer price are:The listing price of the property. Do your own competitive market analysis to determine if the listing price is reasonable.
The real estate market. Determine recent trends in the sale price vs. listing price of properties to determine the market’s strength.
The condition of the property. Estimate the cost to repair deferred maintenance on the property and to replace major components that are near the end of their useful lives. These costs should be deducted from the offer price if the seller is not going to remedy defects before closing.
TIP: For a quick reference list of how long different home components and major appliances last and how much they cost to replace, local vendors or manufacturers’ Web sites are good sources of information.
Ways to Have Your Offer Come Out on Top
Get your Realtor to analyze the comparables with you before formulating your offer. Your Realtor will explain to the sellers during the negotiation why seemingly similar neighborhoods have different average prices and which homes are true comparables.
Assess the strength of the market.Strengthen your negotiating position by knowing which markets are active, which are overbuilt, and which are taking off.
Ask your agent to find out what the seller expects from the transaction—a quick closing, a top-dollar offer, and a big downpayment. Then tailor your offer to those needs.
Determine what's included in the price. Who will pay for repairs, closing costs, commissions? What fixtures will be sold with the house?
Work with your agent to get the paperwork in order. Be sure the offer is typed, clearly presented, and includes all necessary addenda, buyer qualification information, and signatures. A cover letter from you humanizes the offer.
Talk with your agent about what she/he thinks is the best way to present the offer. Salespeople disagree as to whether offers should be presented in person or electronically. Some like the personal touch, while others prefer to keep things at arm's length.
TIP: Many people find it harder to reject a fact-to-face offer. Personal encounters also allow you to work out areas of contention more quickly.Buyer's Checklist
The following items are typically contained in a purchase contract (but study each contract carefully for variations before signing):
Personal property to be included or excluded from the sale
Who pays for required repairs or retrofits
The buyers’ inspection rights
The sellers’ disclosure obligations
The sellers’ obligation to maintain the property
What the seller warrants about the property
What happens if either party doesn’t comply with the contract
What date the sellers will vacate and contingencies for noncompliance
5 Things to Know Before You Negotiate
1. What is the highest price you are willing to pay?
2. What negotiating points will you give in on and what is each worth?
3. Are you prepared to walk away from the deal?
4. What contingencies must you have as part of the deal?
5. What impact does time play for either you or the sellers?
WHAT ARE BUYERS LOOKING FOR?
Market Intelligence
What Buyers Want
Highlights from NAR's Profile of Buyers' Home Feature Preferences
by Dr. Paul C. Bishop, Harika “Anna” Barlett and Jessica Lautz, NAR Survey Research
Times have changed for home sellers, and the housing market isn't what it was. Sales of both existing and new homes are down, price appreciation has fallen from its breakneck, double-digit pace of a year ago, and the supply of homes available for sale – housing inventory – is at record levels. The mortgage market is still recovering from the subprime fallout. While owners trying to sell their homes in the current housing "doldrums" certainly face challenges, home buyers benefit from an ample supply of homes and the opportunity to find homes with features and amenities that most closely match their needs.
So how can sellers "attract" buyers to their homes. One way is to make sure that homes listed for sale offer those potential buyers the features that they really want. NAR’s recent 2007 Profile of Buyers’ Home Feature Preferences looks at those home features considered important during the search process, the presence of those desired features in the homes purchased, and in those cases when the home purchased lacks particular features, home buyers’ willingness to pay extra for them. Below we present highlights from the Profile that address those issues.
Home Features Desired Most by Potential Buyers
The most desired home feature was central air conditioning, ranked “very important” by nearly three quarters of home buyers. An oversized (two-or-more car) garage, a walk-in closet in the master bedroom, and a backyard or play area were also rated as “very important” by at least half of recent home buyers.
Repeat vs. First-time Buyers. The preference for certain home features can differ based on whether a potential buyer is a repeat buyer or a first-time home purchaser. Repeat buyers placed more importance than first-time buyers on almost all home features examined, with the exception of proximity to work and a backyard or play area. The features repeat buyers were much more likely to desire than he first-time buyers included oversized garages, a walk-in-closet in the master bedroom and a separate shower in the master bathroom. Buyers of new homes were also more likely than buyers of previously owned homes to consider most home features, including many luxury items, to be very important.
Regional and Location Differences. The importance buyers place on particular home features also varies by region. For example, while buyers in all regions rated central air conditioning as one of the top two most important features, it was very important to over 90 percent of buyers in the South and over 80 percent in the Midwest, compared to 41 percent in the Northeast, and 59 percent in the West. Buyers in the South also placed higher importance on newly built homes, porches, single-level homes and monitored security systems. Buyers in the West had a higher-than-average preference for lawn sprinkler systems, fencing, patios, and oversized garages. Fully or partially finished basements were more important in the Midwest, and reserved parking in the Northeast.
Buyers' preferences also differ by the location of the home purchased, mostly based on the neighborhood features. Those who purchased a home in an urban area had a higher-than-average preference for being near public transportation, reserved parking, and proximity to work. Suburban home buyers indicated a higher preference for oversized garages, walk-in closets, and new homes. Buyers in rural areas were more likely than average to prefer wooded lots and a water treatment or filtration system.
Preferences by Age. Home feature preferences also vary by age of the home buyer. For example, among older buyers, features such as a walk-in-closet in the master bedroom and a separate shower enclosure in the master bathroom were more often viewed as very important; and a backyard or play area, and proximity to work and schools were less often considered as important among these buyers. Buyers over 44 years old had a higher preference for single-level homes than the younger buyers. Buyers aged 55 or older were more interested in homes that are cable or satellite TV ready, equipped with a lawn sprinkler system, and on a flat lot. Buyers over 64 years were more likely to prefer sidewalks and an air filtration system, and less likely to prefer fencing and porches.
Features in the Home Actually Purchased
Home buyers consider many features as important when searching for a home, but they sometimes need to make compromises when actually purchasing a property. Among recent home buyers who considered each of the features examined as somewhat or very important, the home purchased most likely included cable-satellite TV readiness, high speed Internet access, central air conditioning, an oversized garage, and neighborhood features such as proximity to schools, to a park or playground, and to shopping. Among the desired features least likely to be present in the home purchased were an intercom system, a water treatment or filtration system, homes with handicap accessibility features, and extra-wide doorways.
Repeat vs. First-time Buyers. There are differences on what features buyers comprised on depending on whether they are repeat purchasers or those buying their first home. Repeat buyers were more likely to purchase a home with most of their preferred features, including many luxury items. Compared to first-time buyers, they compromised most on neighborhood features, such as proximity to work, a park or playground, and public transportation. Buyers of new homes did not make many compromises on the size or luxury items, but mostly on neighborhood features.
Regional Differences. The likelihood that a preferred feature is present in the home purchased varies by region. Desired features much more likely to be present by region included intercom systems, hardwood floors, bay windows, skylights, proximity to public transportation and reserved parking in the Northeast; a water treatment or filtration system, an intercom system, and homes more than 100 years old in the Midwest; a tennis court, being near or on a golf court, porches, and a monitored
security system in the South; and lawn sprinkler systems and fencing in the West. Among the desired features, the ones much less likely to be present in homes purchased in each region compared to the national average were lawn sprinkler systems, fencing, patios, and new homes in the Northeast; lawn sprinkler systems, fencing, and monitored security systems in the Midwest; proximity to public transportation, fully or partially finished basements, and intercom systems in the South; and usable/ accessible attics, wooded lots/trees, and whirlpool baths in the West.
Age of Buyer. Recent home buyers aged 25 to 44 purchased a home with most of the features they desired. As the age of the buyer increased, the likelihood of compromises increased, particularly among those aged 65 and over, and especially on neighborhood features. For example, less than 50 percent
of buyers 65 or older purchased a single level home, despite ranking this feature as important.
“Will Pay for AC”
Home buyers value some features so much that they reported being willing to pay more for a home if that feature was present. The most frequently reported features for which buyers would be willing to pay more included central air conditioning, walk-in closets, hardwood floors, high-end kitchen appliances, oversized garages, and patios. The least frequently mentioned features for which buyers would pay extra included homes that were more than 100 years old, a tennis court, a sloping lot, being on or near golf course, and handicap accessibility. Home buyers who purchased a home without a valued feature were willing to pay the most for a waterfront property, typically an extra $4,760; a home less than 10 years old, typically an extra $3,800; and fully or partially finished basement, typically an extra $2,970.
Among buyers who purchased homes below and above the median price, the rank ordering of the features for which they were willing to pay extra changed little. However, there were significant differences in the amounts that buyers would typically pay for some of the features. For example, buyers of homes below and above the median price were willing to pay the most for a waterfront property; but among those with homes priced below the median, the typical extra amount was $3,360 and $8,240 among those homes priced above the median. For a cul-de-sac lot, and proximity to shopping or public transportation, those buyers with above median priced homes were willing to pay almost twice as much as those with homes below the median price. For features including central vacuum, high-speed Internet access, and intercom system, there was not much difference in the extra amount these two groups of buyer were willing to pay.
What Does It Mean to REALTORS® and Their Clients
The information provided in the Profile provides insights into the priorities of home buyers. For instance, sellers considering putting their home on the market may want to consider what “buyer preferred” features might be added to the home before it is listed. By so doing, the home could attract more buyer traffic, and likely increase the sales price. REALTORS® who are working with clients to sell homes can more accurately determine the “value” of each home feature and thus determine a proper listing price. The data and analysis in the 2007 Profile of Buyers’ Home Feature Preferences is another tool for real estate professionals to use as they market their clients' homes to potential buyers.
The 2007 NAR Profile of Buyers’ Home Feature Preferences is based on a survey conducted earlier this year. The 39-question survey questionnaire was mailed to a random national sample of 40,000 home buyers who purchased a home between late 2005 and early 2007. The survey gathered information about those features that buyers considered very important when searching for a home and whether or not those features were present in the home they actually purchased
What Buyers Want
Highlights from NAR's Profile of Buyers' Home Feature Preferences
by Dr. Paul C. Bishop, Harika “Anna” Barlett and Jessica Lautz, NAR Survey Research
Times have changed for home sellers, and the housing market isn't what it was. Sales of both existing and new homes are down, price appreciation has fallen from its breakneck, double-digit pace of a year ago, and the supply of homes available for sale – housing inventory – is at record levels. The mortgage market is still recovering from the subprime fallout. While owners trying to sell their homes in the current housing "doldrums" certainly face challenges, home buyers benefit from an ample supply of homes and the opportunity to find homes with features and amenities that most closely match their needs.
So how can sellers "attract" buyers to their homes. One way is to make sure that homes listed for sale offer those potential buyers the features that they really want. NAR’s recent 2007 Profile of Buyers’ Home Feature Preferences looks at those home features considered important during the search process, the presence of those desired features in the homes purchased, and in those cases when the home purchased lacks particular features, home buyers’ willingness to pay extra for them. Below we present highlights from the Profile that address those issues.
Home Features Desired Most by Potential Buyers
The most desired home feature was central air conditioning, ranked “very important” by nearly three quarters of home buyers. An oversized (two-or-more car) garage, a walk-in closet in the master bedroom, and a backyard or play area were also rated as “very important” by at least half of recent home buyers.
Repeat vs. First-time Buyers. The preference for certain home features can differ based on whether a potential buyer is a repeat buyer or a first-time home purchaser. Repeat buyers placed more importance than first-time buyers on almost all home features examined, with the exception of proximity to work and a backyard or play area. The features repeat buyers were much more likely to desire than he first-time buyers included oversized garages, a walk-in-closet in the master bedroom and a separate shower in the master bathroom. Buyers of new homes were also more likely than buyers of previously owned homes to consider most home features, including many luxury items, to be very important.
Regional and Location Differences. The importance buyers place on particular home features also varies by region. For example, while buyers in all regions rated central air conditioning as one of the top two most important features, it was very important to over 90 percent of buyers in the South and over 80 percent in the Midwest, compared to 41 percent in the Northeast, and 59 percent in the West. Buyers in the South also placed higher importance on newly built homes, porches, single-level homes and monitored security systems. Buyers in the West had a higher-than-average preference for lawn sprinkler systems, fencing, patios, and oversized garages. Fully or partially finished basements were more important in the Midwest, and reserved parking in the Northeast.
Buyers' preferences also differ by the location of the home purchased, mostly based on the neighborhood features. Those who purchased a home in an urban area had a higher-than-average preference for being near public transportation, reserved parking, and proximity to work. Suburban home buyers indicated a higher preference for oversized garages, walk-in closets, and new homes. Buyers in rural areas were more likely than average to prefer wooded lots and a water treatment or filtration system.
Preferences by Age. Home feature preferences also vary by age of the home buyer. For example, among older buyers, features such as a walk-in-closet in the master bedroom and a separate shower enclosure in the master bathroom were more often viewed as very important; and a backyard or play area, and proximity to work and schools were less often considered as important among these buyers. Buyers over 44 years old had a higher preference for single-level homes than the younger buyers. Buyers aged 55 or older were more interested in homes that are cable or satellite TV ready, equipped with a lawn sprinkler system, and on a flat lot. Buyers over 64 years were more likely to prefer sidewalks and an air filtration system, and less likely to prefer fencing and porches.
Features in the Home Actually Purchased
Home buyers consider many features as important when searching for a home, but they sometimes need to make compromises when actually purchasing a property. Among recent home buyers who considered each of the features examined as somewhat or very important, the home purchased most likely included cable-satellite TV readiness, high speed Internet access, central air conditioning, an oversized garage, and neighborhood features such as proximity to schools, to a park or playground, and to shopping. Among the desired features least likely to be present in the home purchased were an intercom system, a water treatment or filtration system, homes with handicap accessibility features, and extra-wide doorways.
Repeat vs. First-time Buyers. There are differences on what features buyers comprised on depending on whether they are repeat purchasers or those buying their first home. Repeat buyers were more likely to purchase a home with most of their preferred features, including many luxury items. Compared to first-time buyers, they compromised most on neighborhood features, such as proximity to work, a park or playground, and public transportation. Buyers of new homes did not make many compromises on the size or luxury items, but mostly on neighborhood features.
Regional Differences. The likelihood that a preferred feature is present in the home purchased varies by region. Desired features much more likely to be present by region included intercom systems, hardwood floors, bay windows, skylights, proximity to public transportation and reserved parking in the Northeast; a water treatment or filtration system, an intercom system, and homes more than 100 years old in the Midwest; a tennis court, being near or on a golf court, porches, and a monitored
security system in the South; and lawn sprinkler systems and fencing in the West. Among the desired features, the ones much less likely to be present in homes purchased in each region compared to the national average were lawn sprinkler systems, fencing, patios, and new homes in the Northeast; lawn sprinkler systems, fencing, and monitored security systems in the Midwest; proximity to public transportation, fully or partially finished basements, and intercom systems in the South; and usable/ accessible attics, wooded lots/trees, and whirlpool baths in the West.
Age of Buyer. Recent home buyers aged 25 to 44 purchased a home with most of the features they desired. As the age of the buyer increased, the likelihood of compromises increased, particularly among those aged 65 and over, and especially on neighborhood features. For example, less than 50 percent
of buyers 65 or older purchased a single level home, despite ranking this feature as important.
“Will Pay for AC”
Home buyers value some features so much that they reported being willing to pay more for a home if that feature was present. The most frequently reported features for which buyers would be willing to pay more included central air conditioning, walk-in closets, hardwood floors, high-end kitchen appliances, oversized garages, and patios. The least frequently mentioned features for which buyers would pay extra included homes that were more than 100 years old, a tennis court, a sloping lot, being on or near golf course, and handicap accessibility. Home buyers who purchased a home without a valued feature were willing to pay the most for a waterfront property, typically an extra $4,760; a home less than 10 years old, typically an extra $3,800; and fully or partially finished basement, typically an extra $2,970.
Among buyers who purchased homes below and above the median price, the rank ordering of the features for which they were willing to pay extra changed little. However, there were significant differences in the amounts that buyers would typically pay for some of the features. For example, buyers of homes below and above the median price were willing to pay the most for a waterfront property; but among those with homes priced below the median, the typical extra amount was $3,360 and $8,240 among those homes priced above the median. For a cul-de-sac lot, and proximity to shopping or public transportation, those buyers with above median priced homes were willing to pay almost twice as much as those with homes below the median price. For features including central vacuum, high-speed Internet access, and intercom system, there was not much difference in the extra amount these two groups of buyer were willing to pay.
What Does It Mean to REALTORS® and Their Clients
The information provided in the Profile provides insights into the priorities of home buyers. For instance, sellers considering putting their home on the market may want to consider what “buyer preferred” features might be added to the home before it is listed. By so doing, the home could attract more buyer traffic, and likely increase the sales price. REALTORS® who are working with clients to sell homes can more accurately determine the “value” of each home feature and thus determine a proper listing price. The data and analysis in the 2007 Profile of Buyers’ Home Feature Preferences is another tool for real estate professionals to use as they market their clients' homes to potential buyers.
The 2007 NAR Profile of Buyers’ Home Feature Preferences is based on a survey conducted earlier this year. The 39-question survey questionnaire was mailed to a random national sample of 40,000 home buyers who purchased a home between late 2005 and early 2007. The survey gathered information about those features that buyers considered very important when searching for a home and whether or not those features were present in the home they actually purchased
Tuesday, October 23, 2007
Are you scared? Is it okay to buy in this market?
The Long View
by Lawrence Yun, Vice President, NAR Research
“How much have real estate investors lost due to the housing market bust?” That was the (highly loaded) question posed to me recently by a producer of one of the major evening news programs. The show wanted to run a story about the "pains" being felt in the market.
Hmm. Well, exactly how much real pain are we talking about? Let's look at a couple of examples. An investor who bought a property in Las Vegas five years ago would be ahead by $150,000; up $200,000 in Miami. The average investor nationwide – up $54,000. Only the recent buyers (flippers) who bought last year in few specific markets would have encountered a loss.
Not All Losses Are Created Equal
I’m not discounting the discomfort of those who lost big, especially lenders and hedge funds who had large exposures to subprime loans. Investors in homebuilder stocks have certainly experienced pains. But nearly all real estate investors who have a reasonable holding period are doing quite fine. Some of these fortunate buyers who got into the market several years ago will still consider a modest give back as a loss without considering the large gains reaped during the housing boom.
That’s the nature of the human mind. A gain of $190,000 in Miami feels like a $10,000 loss considering that the gain had been $200,000.
A Home is Not a Stock Certificate -- Thank God!
Foreclosures are rising and construction workers are being laid off. However, consumers and homeowners who are in it for the long-term are once again coming out well ahead. Because of the power of leveraging, $10,000 used for a down payment on a typically priced home in the United States at a typical appreciation rate of 5 percent will return $110,000 after 10 years. The same $10,000 invested in the stock market appreciating 10 percent annually will result in $23,600.
No wonder the data from the Federal Reserve show consistent results year-after-year of the staggering difference in net worth between homeowners and renters. A typical homeowner had $184,400 in net worth versus only $4,000 for a typical renter.
The Spooky Thing
The lack of buyer confidence to enter the market has been the one principal reason in holding back home sales. Many would-be buyers are spooked of a possible home price decline. And the media is fueling that fear. Some of the most popular market gurus who offer their advice on television and other media say so.
Caution is in order, however.
As a recent Barron’s article pointed out, stock picks made by one such expert actually underperformed the market.
Opportunities to Seize
It’s also important to point out that times of crisis often turn out to have been times of opportunity in hindsight. With over four million net new job additions in the past two years– the time frame during which home sales have steadily fallen – a significant pent-up demand has developed.
Home sales and home prices will be higher in 2008 compared to 2007. And, as with any investment, look longer term. Those investing in a home and keeping it for a typical holding period of six to ten years will likely see their investment pay off; those homes will have been a good investment.
As for stocks, they are not the enemy of real estate. Many REALTORS® own stocks. (So do many economists!) The latest NAR research on vacation-home buyers reveals that many of them rely on stock market wealth to fund that second-home purchase. Stocks and real estate both promote the importance of private ownership.
Where to Throw the Darts
Of course, with housing figures down, all eyes at looking to the stock market. Indeed, the stock market is at an all-time high. That's terrific in and of itself and reflects confidence in the U.S. economic outlook. Just be careful about taking specific advice from any hyper-emotional TV personality. Darts should not be thrown at publicity posters of any "mad money" host. You’ll likely have just as good of luck by reining in your emotions (and money) and throwing them randomly on the financial pages of your newspaper for your next stock pickings.
by Lawrence Yun, Vice President, NAR Research
“How much have real estate investors lost due to the housing market bust?” That was the (highly loaded) question posed to me recently by a producer of one of the major evening news programs. The show wanted to run a story about the "pains" being felt in the market.
Hmm. Well, exactly how much real pain are we talking about? Let's look at a couple of examples. An investor who bought a property in Las Vegas five years ago would be ahead by $150,000; up $200,000 in Miami. The average investor nationwide – up $54,000. Only the recent buyers (flippers) who bought last year in few specific markets would have encountered a loss.
Not All Losses Are Created Equal
I’m not discounting the discomfort of those who lost big, especially lenders and hedge funds who had large exposures to subprime loans. Investors in homebuilder stocks have certainly experienced pains. But nearly all real estate investors who have a reasonable holding period are doing quite fine. Some of these fortunate buyers who got into the market several years ago will still consider a modest give back as a loss without considering the large gains reaped during the housing boom.
That’s the nature of the human mind. A gain of $190,000 in Miami feels like a $10,000 loss considering that the gain had been $200,000.
A Home is Not a Stock Certificate -- Thank God!
Foreclosures are rising and construction workers are being laid off. However, consumers and homeowners who are in it for the long-term are once again coming out well ahead. Because of the power of leveraging, $10,000 used for a down payment on a typically priced home in the United States at a typical appreciation rate of 5 percent will return $110,000 after 10 years. The same $10,000 invested in the stock market appreciating 10 percent annually will result in $23,600.
No wonder the data from the Federal Reserve show consistent results year-after-year of the staggering difference in net worth between homeowners and renters. A typical homeowner had $184,400 in net worth versus only $4,000 for a typical renter.
The Spooky Thing
The lack of buyer confidence to enter the market has been the one principal reason in holding back home sales. Many would-be buyers are spooked of a possible home price decline. And the media is fueling that fear. Some of the most popular market gurus who offer their advice on television and other media say so.
Caution is in order, however.
As a recent Barron’s article pointed out, stock picks made by one such expert actually underperformed the market.
Opportunities to Seize
It’s also important to point out that times of crisis often turn out to have been times of opportunity in hindsight. With over four million net new job additions in the past two years– the time frame during which home sales have steadily fallen – a significant pent-up demand has developed.
Home sales and home prices will be higher in 2008 compared to 2007. And, as with any investment, look longer term. Those investing in a home and keeping it for a typical holding period of six to ten years will likely see their investment pay off; those homes will have been a good investment.
As for stocks, they are not the enemy of real estate. Many REALTORS® own stocks. (So do many economists!) The latest NAR research on vacation-home buyers reveals that many of them rely on stock market wealth to fund that second-home purchase. Stocks and real estate both promote the importance of private ownership.
Where to Throw the Darts
Of course, with housing figures down, all eyes at looking to the stock market. Indeed, the stock market is at an all-time high. That's terrific in and of itself and reflects confidence in the U.S. economic outlook. Just be careful about taking specific advice from any hyper-emotional TV personality. Darts should not be thrown at publicity posters of any "mad money" host. You’ll likely have just as good of luck by reining in your emotions (and money) and throwing them randomly on the financial pages of your newspaper for your next stock pickings.
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