Home The Washington Diplomat April 2011 Despite Downturn, High-End Real Estate Holding Up Quite Well

Despite Downturn, High-End Real Estate Holding Up Quite Well

Despite Downturn, High-End Real Estate Holding Up Quite Well

Borrowing a cup of sugar could get a whole lot more interesting if the vice president were your neighbor — assuming you could get past the Secret Service officers. For the first time in 50 years, the property next door to the VP’s official residence on Observatory Circle is for sale. Asking price: $7.2 million.

Photo: Georgetown Long & Foster
For the first time in 50 years, the property next door to the VP’s official residence on Observatory Circle, seen above, is for sale. Asking price: $7.2 million.

That buys you not only bragging rights to 3400 Massachusetts Ave., NW, but your own piece of history. The 7,128-foot house was built in 1926 by Christian Heurich, who owned a brewery in Foggy Bottom. Later purchased by Dr. Marshall Parks, the father of pediatric ophthalmology and a founder of Children’s National Medical Center, the house was visited by the previous two popes.

“I think the charm of the house is that it’s still intact,” said Denise Warner, a co-lister of the house and part of the sales team at the Georgetown office of Long & Foster Real Estate. It still has its original chestnut paneling, wide-plank oak floors, handmade plaster ceilings with decorative touches and original fixtures. In the 1960s, Parks added a wing on the southwest side to house his medical practice there, complete with a reception area and exam room. Used as a media room today, it could be a home office again, Warner noted.

The 0.39-acre lot is the last large parcel of land in that subdivision that is residential, added Terri Robinson, also of Long & Foster’s Georgetown office and Warner’s co-lister.

The Observatory Circle property is just one of many high-end homes for sale in the Washington metropolitan region, which has fared better than many parts of the country during the recent economic downturn, including its luxury real estate market.

“Washington, as I like to say, is the bubble,” Warner said. “We’ve held our own over the last few years with real estate pricing. If anything, we’ve been flat, which is good. Flat is the new marker for excellent performance.”

Washington home prices went up more than 3 percent last year, she added, and the houses in the higher-priced bracket — $2 million plus — have enjoyed pretty steady sales.

“There are a number of reasons for that,” said John Heithaus, chief marketing officer at Metropolitan Regional Information Systems (MRIS). “Number one, being the nation’s capital, there’s a lot of money around here that’s related to the government, whether it’s lobbyists, whether it’s some of the companies that are headquartered here, whether it’s diplomats that are coming here from other countries that want to buy real estate. It’s really helped the overall strength of the D.C. market.”

Certainly, the closer to the District you go, the higher the prices will be. Life inside the Beltway is, simply put, more convenient — and costly.

“The old adage of location, location, location is still incredibly true in the real estate business,” Heithaus said. “Those that are in a more advantageous location, specifically with regard to commuting, those are where you see values are holding up better and are typically higher.”

City Built on History

Photo: Georgetown Long and Foster
Historic homes abound in Washington. Evermay Estate is a 13,000-square-foot Federalist mansion that was completed in 1801 and is situated on 3.5 lush acres in Georgetown — and currently on the market for $29.5 million.

Of course, historical value helps, too. Take the Evermay Estate, for instance, whose builder, Samuel Davidson, also owned the land on which the White House sits. The 13,000-square-foot Federalist-style two-and-a-half story brick mansion was completed in 1801 and is situated on 3.5 lush acres in Georgetown. Priced at $29.5 million, it was listed on the National Register of Historic Places in 1973 — 50 years after Ferdinand Lammot Belin, a U.S. ambassador to Poland and the property’s fifth owner, purchased it, adding spectacular terracing and fountains to the gardens. The Rabat Fountain, two circular, low fountains connected by a large, deeper rectangular fountain, is a copy of one that Belin saw in Rabat, Morocco, for example.

“There’s just none other like it,” Jeanne Livingston, also with Long & Foster’s Georgetown office, said of the estate. “It’s unique in so many ways. The most important one is its history and its location. You feel like you’re in the country when you’re there,” even though the grand estate sits in the heart of D.C.

Evermay has a 40-foot-by-26-foot ballroom adjacent to a terrace that can be tented and used for large receptions. An elevator is available to move residents and guests throughout the home, which overlooks Rock Creek Park. The house has 10 bedrooms, six bathrooms, five half-bathrooms and — unlike most places in D.C. — ample parking. It can fit 25 cars or up to 100 with valet services. Outside there’s also a 2,300-square-foot, three-level gatekeeper’s house with a full kitchen, living room, three bedrooms and two bathrooms.

But older isn’t always better. Lots of new homes on the market fall into the luxury segment too, said Marc Fleisher, one of Long & Foster’s top five agents in the country. He recently sold a $7 million house in the Spring Valley section of D.C. to the South African government for use by its ambassador to the United States.

Among his current listings is a $6.9 million European villa-style home at 9411 Newbridge Drive in Potomac, Md., built in 2010. It has seven bedrooms, seven and a half bathrooms, 18,000 interior square feet of space and a lot of 2.25 acres. An ornate white mansion on the outside, the inside design includes one-of-a-kind plaster moldings, custom millwork, imported stones, a barrel-ceilinged foyer, a limestone-fluted staircase, an inlay wood-paneled Italian library and a gourmet chef’s kitchen. The lower level has a wood-paneled home theater, wine cellar, second kitchen, exercise facility and staff quarters.

“There are people who think it’s fabulous; there are people who think it’s too much,” Fleisher said of the home.

But for many top-tier homebuyers in D.C., you can never have too much, whether it’s detailed craftsmanship or entertaining space. And as much as modern properties have to offer, history never goes out of style for die-hard Old World Washingtonians. This, after all, is a city built on history, and even “new money” still flocks to old homes.

One such historic showcase is the 30,000-square-foot Halcyon House, at 3400-3410 Prospect St., NW — which can be yours for $15 million, as listed by Washington Fine Properties. The 224-year-old estate, which looks like a university or old state house from the outside, has five levels, five bedrooms and nine full bathrooms. Inside, the Federal-style property is reminiscent of a museum, with a wood staircase punctuated in the center by ornate statues. The living areas are much homier, with fireplaces, crown molding and colorful yellow and peach walls. The house was built in 1787 by Benjamin Stoddert, the first secretary of the Navy, and played a role in the Underground Railroad during the Civil War. (Several websites report that the house is haunted by the ghosts of runaway slaves who died in the basement.) It too is listed on the National Register of Historic Places.

Big Names, Big Money

Photo: Anice Hoachlander / Hoachlander Davis Photography
A recent high-profile sale was Marwood Estate, which was once the home of Joseph P. Kennedy and was just bought by Ted Leonsis, owner of the Washington Capitals and Wizards, for $20 million.

The listing agent for Halcyon House is Mark McFadden, who recently represented the buyer of Marwood Estate (once the home of Joseph P. Kennedy) at 11231 River View Drive in Potomac, Md., which came with a hefty price tag of $20 million. The buyer? Ted Leonsis, owner of the Washington Capitals and Wizards and a former AOL executive. Incidentally, AOL co-founder Steve Case’s Massachusetts Avenue home was sold in 2009 in another high-profile transaction to the government of Trinidad and Tobago, which got the property for $12 million after an original listing price of $14.9 million.

Washington Fine Properties is also the listing agent for 1824 R St., NW, a 10,000-square-foot mansion in Dupont Circle that’s on offer for $15.5 million, currently the most expensive listing in D.C. At one point owned by the Embassy of Singapore, the eight-bedroom, nine-bathroom residence features no less than 13 fireplaces, a hydraulic elevator, a mix of antique wood and limestone floors, and a striking iron-railed staircase — providing an ideal backdrop for D.C. entertaining. In addition to a 2006 restoration that preserved the home’s historic workmanship, a few modern touches have been thrown as well, including a blast-resistant “safe” room for potentially panicky owners.

A ballpark of around $15 million is the bargain basement price that real estate magnate Donald Trump is angling for as he sets his sights on the famed 45-room Alblemarle House in Charlottesville, Va., listed by Sotheby’s International Realty for $24 million. Trump though reportedly put up a bid of $15.26 million for the estate — after an initial listing of $100 million — at an auction in February held by the bank on the steps of the county courthouse. It was a stunning and sad turn of events for the estate’s former owner, Patricia Kluge, once married to billionaire John Kluge, who put her heart and soul into turning her 23,000-square-foot English country manor into a state-of-the-art winery and vineyard, only to see her ambitious venture hammered by the economic recession. (Trump is currently negotiating for some of Kluge’s other former holdings.) The reversal of fortune was a reminder that, although ultra-expensive estates continue to sell, even luxury has its limits in the face of financial reality.

If Trump manages to acquire Albemarle, he’ll have plenty to show for his money. The estate was built in 1985 and rests on about 300 acres near Thomas Jefferson’s Monticello and James Monroe’s Ash Lawn-Highland. Besides the main house, there is a pool house, pavilion, log cabin, and a thatch-roof greenhouse.

Outstanding Outliers

MRIS defines the luxury market as homes priced at $1.5 million or more. But Heithaus points out that depending on where you are, that could be a two-bedroom condo or a seven-bedroom estate. In other words, you can get more house for your money farther from D.C., where space is at a premium and where estates like Albemarle simply aren’t possible. Some of the area’s biggest homes in fact sit in surrounding counties such as Fairfax in Virginia and Montgomery in Maryland, two of the wealthiest in the United States.

Take, for example, a 20-year-old Georgian-style manor on the Mason Neck peninsula in Fairfax County, 18 miles outside D.C. Available for $6.49 million, it has six bedrooms, seven and a half baths, and 11,213 square feet of living space.

“What really makes this property unique is that there are not many areas that are close to D.C. for the diplomatic community and the political community where one can find a setting like this,” said Susan Gray Chambers, an agent with Coldwell Banker Previews International. “You can have some privacy and a large amount of land, especially on the waterfront.”

And if you still crave a piece history, you’re right next door to it. “The neighboring property is Gunston Hall, which is George Mason’s former home,” Gray Chambers said. Mason was an influential Virginia politician following the Revolutionary War. “The rest of the Mason Neck peninsula consists of thousands of acres of federal, state and regional parkland, so it will never be developed. There are wildlife refuges surrounding this property.”

The house was designed in keeping with the Georgian-era way of life, meaning the formal and living areas are separate but connected by a main hall that runs the length of the home and culminates in a magnificent winding staircase surrounded by floor-to-ceiling windows that overlook the river.

“It’s a spectacular flow for formal entertaining, but the unusual thing about this house is it’s not one of those new McMansions with soaring ceilings everywhere and kind of overdone and it loses its comfort,” Gray Chambers said. “This house, you walk in and you get the grandness of it but it’s so comfortable and cozy.”

Endurance at Top Echelons

Despite the economy’s ups and downs, the outlook for the luxury home market in this area remains positive. Last year “was definitely a recovery year as far as the whole market goes,” according to Donna Evers, president of Evers & Co. Real Estate. “It’s still not what I’d call a boom market here, but it’s certainly getting better.”

Local real estate prices may be high compared to many other parts of the country, but they are actually undervalued, the agents say.

“We are not at the top at all in terms of high-priced inventory,” Long & Foster’s Warner said. “We are still a very good bargain” compared to home prices in San Francisco, Boston and London.

“The Washington, D.C., metropolitan marketplace for upper-bracket homes is very undervalued in comparison to the world markets,” Fleisher added. “You can go to any other major city in the United States, be it Chicago, San Francisco, LA, Atlanta, Miami, New York, you can go to London, Paris, Istanbul — the upper-bracket markets have no ceiling.

“Washington, D.C., is the nation’s capital, one of the most important world capitals that exists,” he said. “Inevitably there has to be an increase in upper-bracket prices.”

About the Author

Stephanie Kanowitz is a contributing writer for The Washington Diplomat.