Transitional neighborhoods - Plus ça change

This screed is not about good neighborhoods or bad neighborhoods. It's about neighborhoods that have gained in popularity beyond the hottest neighborhoods as prices escalate. Is it not logical that buyers seeking value will venture into territories with the potential to enjoy the halo effect of the areas they adjoin? Where blocks may have been burdened with neglected properties, perhaps some that have been abandoned, first one house is gut renovated, then others. In neighborhoods with few amenities, an old rental building is converted to luxury condos and there follow a spiffy new restaurant and a new fitness club. Inconvenient public transportation may be bolstered by a new Metro stop as well, making a less accessible area suddenly prime.

Call the process gentrification or transition, these are neighborhoods undergoing change. The question for buyers and developers always is whether the transition from outré to outtasight will ever be complete. Will those neighborhoods progress or regress?

In markets with falling prices, guess where the prices fall quickest and farthest. Yes, it's in transitional neighborhoods. The reason hinges on risk. In fully transformed neighborhoods, the assumption can be made that their popularity will continue and that any investment will be safe for a time, at least relatively speaking. As buyers hang back and interest rates rise, the cautious money will flow to the neighborhoods with futures that are pretty much beyond question. That's how it has been in the past, and the past is bound to be precedent. (Of course, neighborhood popularity always ebbs and flows but generally in decades-long cycles.)

What prompts this discussion is a new condominium now marketed as being situated in the U Street Corridor. Truth be told, the building is two ugly blocks north of U Street and four or five blocks east of the trendiest boutiques and restaurants. The open question is whether the heat of U Street action will cause the blocks dominated by that condominium and one being constructed across the street ever to catch fire. The company trying to unload the apartments is predicting five years – five! – for the change to occur. Is it because of the length of the span, or the uncertainty of its duration, that prices are generally lower than in some other parts of the District? Either way, it's the gamble that provides the value for buyers who are willing to take a chance on transition or who are indifferent to the current paucity of trendiness at their front doors.

For apartments as small as a 580-SF junior one bedroom to as big as a 1,500-SF three bedroom, prices per square foot run from about $580 to $660, depending on views, level and upgrades. Only the biggest and most expensive units will have much appeal – for example, the three-bedroom fifth-floor condo with a view of the Washington monument for $549,900. A two-bedroom on the ground floor looks onto an alley and faces a loading dock, but it's listed at just $469,900 with a $352 monthly fee. A one-bedroom being offered by an investor for proportionately more than others in the building feels more like a studio, boasts views of only a courtyard and has a single closet besides a slim hall closet. It is listed at a reduced price of $359,999, which still is too high by $20,000 or $30,000. All of the units have at least some hardwood floors, maple cabinetry, marble countertops, stainless appliances, washer/dryers and garage parking.

Time will tell, but the forthcoming statistics on the second quarter will doubtless provide illuminating insights into price changes by zip codes. Look for the numbers in a month or more, after they are issued by Metropolitan Regional Information Systems.

Following are some properties offered by other real estate agents and seen in the past week:

• A lovely detached single-family home in 16th Street Heights. With four bedrooms sharing one bath on the second floor and a finished attic, this four-square house also has an inviting front porch across the front, pleasant rear yard and deck, a parking area and a finished basement with ill-used space, a half bath and low ceilings. The kitchen is well designed with the exception of the center island, which seems homemade. On the market for a month, this 3,300-SF home is overpriced by approximately $25,000.
  
• In Cleveland Park, a poorly maintained one-bedroom co-op without parking. Although it has an eat-in kitchen with only a semblance of modernity, plus a solarium and an ineffable charm, this 750-SF apartment in a 1928 building does not impress. It does not have central air conditioning, and it will be the rare buyer, indeed, who is taken with the mural of blue sky and clouds in the entry hall. But the price of $319,000 from $330,000 with a $500 monthly fee half a block from the Metro is not half bad.
  
• A winning two-bedroom, two-bath condo that is agreeably dominated by a 700-SF wraparound terrace in the heart of Bethesda. This handsome apartment has hardwood floors, new carpeting, Italian marble foyer, remodeled spacious kitchen and garage parking. But room size is affected, not severely, by the presence of the terrace. Among other things, this secure building offers guest parking, a gym and a storage room. Listed at $950,000 with a $572 monthly fee that excludes utilities, the unit was on the market for a bit more than two weeks before receiving an offer this week.
  
• In Adams Morgan, a condo with parking in a three-year-old building. The unit's virtues include 1,203 square feet and 14-foot ceilings. Unfortunately, they are that high because the apartment is way below grade, and the windows in what are called the two bedrooms would be reachable only with a ladder – meaning that technically, they are not bedrooms. Still, it's a decent amount of room for the money, reduced from $589,900 when it was listed in April to $539,900 now, plus $5,500 in closing help, with a $281 monthly fee that covers nothing of importance.
  
• A Chevy Chase, D.C. red-brick colonial the owner of which is overly fond of vivid contrasting colors such as mauve and purple in the dining room. The 1948 home has the usual three bedrooms and one dated hall bath on the second floor, a nicely finished attic, a second bath off a fourth bedroom/office on the main floor, a merely serviceable kitchen with laminate counters, an unfinished basement, sunroom, pleasant rear yard with deck, carpeting in the living room, which has a fireplace, central air conditioning and a one-car garage. The offering price of $719,000 is appropriate.
  
• South of Logan Circle, a handsome two-bedroom, two-bath condo with three exposures, modern kitchen with both a Viking and a SubZero, cherry floors, crown molding, built-in bookshelves, gas fireplace, custom sound system, decent closet space and a washer/dryer. The 1,000-SF apartment, which is up on the third floor in a boutique building, looks onto other buildings. It is listed a bit too high at $549,000 with a $325 monthly fee. And on the first floor, another two-bedroom apartment with perhaps 855 square feet and less drama. With built-ins and a fireplace, it is on the market by the owner for too much at $465,000 with a $270 monthly fee.
  
• An oppressive brick colonial on a busy thoroughfare in the Glenbrook Village neighborhood of Bethesda. This 1946 home with three bedrooms and a hall bath, a dank basement, dated kitchen and a driveway that challenges oncoming traffic to hit the vehicle backing out has been decorated with too much heavy, dark furniture and painted with colors only Dracula would find amusing. That its most attractive feature is the fish pond and fountain near the patio in the rear yard tells you all need to know. The property's proximity to the National Institutes for Health is a bonus as well. This ugly duckling without central air conditioning will never sell at the offering price of $725,000.
  
• In Dupont Circle, a stylish 1941 detached home with two bedrooms, two and a half baths, impressive landscaping, a narrow galley kitchen with cabinets that could be taller and parking for one car. All the rooms have been improved beautifully, including skylight, extra closet space and expensive details. The wow factor may attract a buyer willing to pay the $879,000 asking price, but this house on just two levels is not worth that much money.
  
• A 1926 semi-detached Tudor in 16th Street Heights a short distance from Carter Barron Park. This 2,500-SF house on three finished levels features a new kitchen, an oversize yard and, upstairs, three smallish bedrooms and two baths. The master bedroom suite is appealing and offers good closets, and the lower level with recreation space, a third full bath and partial kitchen is mostly above ground. On a street with a majority of single-family houses, this property is attached to three others in a triplex arrangement. Its price of $669,000 is within reason.
  
• In Dupont Circle, a one-bedroom apartment of perhaps 600 square feet. It has a small dated galley kitchen and an owner whose favorite paint colors are pumpkin and blue. There are a wood-burning fireplace, high-end washer/dryer, extra storage and pet-friendly neighbors. Such as they are, views are from the short end of a U-shaped courtyard. This apartment is somewhat overpriced at $369,000 with a $189 monthly fee.
  
• On Capitol Hill, a paucity of properties priced under $450,000 in decent condition with (preferably) three bedrooms and some proximity to Metro. Forget central air conditioning. The first prospect, on an improving stretch of a major avenue within sight of RFK Stadium, is a classic '20s front-porch row with three bedrooms and old bath upstairs and a partially renovated basement with full bath. Decent bones, but the exterior condition, outdated fixtures and elderly possessions strewn everywhere say $450,000 is way too high. This one will sit for a while longer in this market. Next up on a numbered street around the corner, a smaller (only two bedrooms) but nicely done 20s row with roof problems priced at $429,000. It's very sweet, but the lack of a third bedroom is a deterrent. Finally, a 1900 rowhouse with a one-bedroom English basement rental and three bedrooms and one bath on two floors above. One step into the lower level and you are assaulted by the smell of mold and the squish of water-logged carpet - no need to go any further. But its price (down to $499,000 from $625,000) and days on the market (140 and counting) are illustrative of transitional neighborhood issues as well as the danger of overpricing.
  
• A Kalorama mansion worthy of its description. Built in 1908, the stunningly renovated house features five bedrooms and three and a half baths, including the in-law suite, period details such as oversized moldings, stone fireplace mantels, parquet hardwood floors (the good kind), a knockout eat-in kitchen, stupendous master suite, outdoor patio with little in the way of garden space, rooftop deck, two-car attached garage and a wonderful location. The price: $3.495 million.
  
• In Georgetown, a two-bedroom bayfront dollhouse with cozy basement family room or in-law suite, a kitchen that is only halfway there (enjoying the only, and thus wasted, direct access to a little garden), two bedrooms upstairs and a single but pretty bath, the second one being downstairs. Offered at $1.295 million, this place is significantly overpriced, especially since an essential parking space is absent.