Plenty of rent-versus-own calculators are available online to do a purely numbers-driven evaluation of whether you should buy a home or rent one. (The New York Times has a particularly good one.) But, as most buyers in search of a new home know, the decision to buy a home is not purely financial. It requires a long-term commitment to a property and a neighborhood. UrbanTurf will work its way through the neighborhoods of the city to gather estimates of rent and home prices as well as the distinctive characteristics of each community. This week, we visit Dupont Circle.
Bordered roughly by 16th Street, M Street, Rock Creek Park and Florida Avenue, Dupont Circle is without question one of the most sought-after neighborhoods in D.C. It boasts some of the city’s best restaurants (Komi, Sushi Taro) and its central location makes it a very convenient neighborhood for anyone working downtown.
The neighborhood mostly appeals to urban professionals, both single and married, straight and gay. In recent years, a few more families have moved into the area, along with empty-nesters and retirees looking for an active city life. The Dupont Circle Metro station offers quick access to the rest of the city and the area is also served by numerous bus lines, the Circulator, and a Metro connector bus to Georgetown.
Unfortunately, in order to live in this neighborhood, you need money. Home prices in Dupont are the second highest in D.C., just behind Georgetown. Long & Foster’s Tony Hain says that the neighborhood housing stock is mostly in mid-rise condominium buildings and attached row houses. While there are plenty of renovated homes, there is virtually no new construction to be found. The handful of single-family properties in this neighborhood tend to be embassy-sized homes, one of which sold last year for $12 million.
Hain says that one-bedroom condos in Dupont typically sell from around $330,000 to the mid $400,000s. The price range for two-bedrooms is much wider, starting in the $400,000s and going to more than $1 million, depending on renovations and square footage. (Hain says the bulk of two-bedroom condos are in the $500,000 to $600,000 range.) Row houses in the neighborhood are generally priced from $1.2 to $1.5 million if they have not been recently renovated; renovated row homes can fetch well north of $2 million. While there are plenty of buyers looking for three-bedroom homes, Hain told UrbanTurf that this property type is rarely available in Dupont. Below we provide a couple examples of units currently for sale in the neighborhood.
A one-bedroom unit is currently on the market at 1701 16th St. N.W. for $357,000. The condo has been renovated and now features a built-in surround sound system and custom lighting, as well as an in-unit washer/dryer. With a 20 percent down payment and a 5 percent interest rate over 30 years, this condo is estimated to have a total monthly payment of $1,979 (including a $399 condo fee).
There is a two-bedroom, two-bath condo with more than 1600 square feet of interior space at 1830 18th St. N.W. currently on the market for $639,000. The home has a patio and tall windows for natural light. The monthly payments, including a $423 condo fee, total $3,243 (assuming a 20 percent down payment of $128,000).
...Or To Rent
Looking at rental postings on Craigslist for Dupont Circle, it becomes clear that you will be very lucky to find a one-bedroom unit in the neighborhood for less than $1,700 a month. The range for available one-bedroom rentals was between $1,650 and $2,300. Two-bedroom apartments are available for between $2,100 and $3,100. Finding a three-bedroom or larger to rent in this neighborhood is fairly difficult.
If you have some money tucked away and are in the market for a one-bedroom unit, it makes sense to buy, since monthly mortgage costs for Dupont Circle are similar to what you would be paying in rent. The answer is not so cut and dry with two-bedrooms because, as we noted above, the price range for these units is fairly wide.
If you are on the fence as to whether to buy, here's a fact that might push you toward buying: Hain says that there are only 12 two-bedroom units on the market right now in Dupont, which means that inventory is very tight. With D.C. facing a possible housing shortage in 2011 to 2014 because of a lack of new construction, now might be the time to invest.
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