On Friday, Curbed introduced you to Alia J. Khan, the recovering lawyer and former Dining Editor at Bisnow Media who now works as a realtor at Real Living at Home. She’s also a blogger in her own right at Urban Living By Alia. If you feel you missed your chance to ask the question that was weighing heavily on your mind, send it into the tipline. There will be plenty of future opportunities to pick the brains of D.C.’s real estate experts. If you’re curious as to whether your property value is rising or how townhouse prices may change over the next few years, read on.
How can you tell if your property has increased in value?
There are a couple of simple indicators you can look out for as signs that your property value is increasing. First off, if you’re noticing that “Under Contract” or “Sold” signs are going up very quickly after a house goes on sale, that’s typically a sign that your area is in high demand. Another sign is an increase in your tax bill.
If you simply want to know how much the city (a.k.a. the folks in charge of your tax bill) thinks your property is worth, just go to D.C.’s Real Property Assessment Database and type in your address. The most recent “Total Assessment” (meaning your land value + the value of the structure built on that land) will be in the right-most column. But keep in mind, this number is rarely an accurate reflection of your home’s market value.
If you want to know what someone would actually pay you for your house, your best bet is honestly to contact a realtor. In addition to literally being on the ground every day, realtors have access to market data and statistics that can give you the most accurate snapshot of your home’s current market value at any given time.
I would be interested in your thoughts on how all of the development in the District will affect townhouse prices over the next couple years. Simple economics would suggest that the increase in supply should reduce prices. However, the new housing stock seems to be largely condo/apartments, so townhouses may be a unique market that could appreciate more (relative increase in scarcity to condos). Also, the new development could create even more demand through pure momentum. As someone renting right now, I’d love to hear your thoughts on whether I should buy a townhouse now or wait for potentially lower relative prices in the future.
I think your analysis is spot-on (are Brits the only ones who can get away with saying that?), but your conclusion could use a tweak. Yes, I do think that the supply of “authentic” (meaning still containing a significant part of the original structure – so not new construction, and not fully gutted and rehabbed) townhomes is decreasing, and I explain why below. But, that means that the pricetags on these townhomes are going to go up, not down. So if you’re looking to take advantage of relatively lower prices, now would be the time to buy, before these townhomes become a rare commodity.
D.C.’s condo inventory is still lower than current demand, so a lot of the new inventory coming on the market consists of condos as developers rush to fill that gap. Also, some new construction is being made to mimic townhomes, or else historic facades are maintained while interiors are gutted and modernized. So, authentic townhomes will be in relatively lower supply as other types of inventory increase, and as more historic properties are gutted and rehabbed, the absolute number of authentic townhomes will decrease, too.
So, does all of that mean that you should buy an authentic townhome now? Well, I definitely think those are good reasons, but they’re just part of the analysis. The fact that mortgage rates are slowly but surely on the rise is another reason why potential buyers should seriously consider making a move sooner rather than later. And above all, the most important consideration is your personal financial situation, and whether it makes sense for you to buy now or wait until your nest egg is a little bit bigger.
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Alia Khan, Partner Associate contributes to CurbedDC March 26th, 2015admin