It didn’t look like a house anyone would pay $400,000 extra for.
Several walls inside the gray townhouse with blue trim were streaked with water stains. The first floor was noticeably uneven. And termites had dined in front.
The big pluses: It was 2,850 square feet, had off-street parking, and was in walking distance of Union Station and the bars and restaurants along H Street NE. Then there was the list price: $337,000. Similar houses in the neighborhood were going for closer to $500,000.
Two weeks and 168 bids later, the house — in the 800 block of Fourth Street NE — was sold this month for $760,951 to an unidentified buyer.
The sale floored many real estate agents, including James Lisowski, whose clients put in a losing bid. “I don’t think it was worth that finished,” he said, alluding to the house’s distressed condition.
While much of the nation is still struggling to emerge from a historic housing-market meltdown, the District is reliving its boom days. High rents, low interest rates, low inventory, and a flood of new residents in their 20s and 30s are making parts of the city feel like it’s 2005 again.
The median home sale price in the District is up 14 percent from last year, according to RealEstate Business Intelligence (RBI). And the average number of days houses spend on the market has fallen by nearly 30 percent, to 53 days.
Bidding wars have become commonplace along H Street NE, in Trinidad and in Eckington, among other areas. So have multiple cash offers and sales that soar past the asking price. In certain neighborhoods, buyers once again are snapping up unbuilt units based on floor plans. And more are forgoing inspections or appraisals.
Seattle, Boston and Palo Alto, Calif., are experiencing the same kind of scramble as Washington, with offers being made before open houses are held. (One house hunter in the Boston area told the Boston Globe this year that the desperate buyers reminded him of “people trying to get on the last lifeboat on the Titanic.”)
Nationally, home prices have been edging up. According to the closely watched S&P/Case-Shiller index, average home prices for the third quarter increased 3.6 percent from the same period last year.
Homes in Arlington, Fairfax and Montgomery counties — all of whose median sale prices are up more than 4 percent from last year — are reaping battlefield premiums. One Maryland couple beat out the competition by agreeing to adopt the seller’s dog.
In the District, the House of 168 Bids is another case of deja vu.
The house at 825 Fourth St. NE was unusual in a few respects. It had been in foreclosure, which is rare in the city because of a de facto moratorium that began after the city revamped its foreclosure process in 2010.
Katherine Rollins, one of the former owners, said she and her then-husband held on to the house after buying another home in Bowie. But they could not afford to keep both, she said. The bank foreclosed in 2010, the same year the couple filed for divorce, public records show.
The Fourth Street house ended up with the U.S. Department of Housing and Urban Development, which disposes of foreclosed homes that were financed with Federal Housing Administration-insured mortgages. Would-be buyers had to agree to live in the house. No investors needed to apply. And they had two weeks to put in an offer through the HUD Web site, an unusually long time for such a hot property, said Leslie White, an agent with Redfin, an online real estate company.
Communication systems engineer Aamir Yousufzai, 26, had his eye on the place as soon as it hit the market Nov. 26. He had been looking for a house since September and is a veteran of several bidding wars.
The condition of the house did not faze him. He had seen worse. He decided to go for it.
“It just looked like it had a ton of potential,” he said.
Lisowski, an agent with Keller Williams Capital Properties, had four clients who felt the same way. He toured the house about a dozen times, including once with a contractor. Ten to 15 interested buyers and their brokers were in the house with him at any given time.
Given the amount of work the house needed, three of Lisowski’s clients chose not to bid. A fourth pair put in what Lisowski thought was a very aggressive offer that turned out to be $100,000 off the mark. (The name of the buyer won’t be known until the sale closes in mid-January.)
“The city is filled with people who are playing hardball after losing a few places” in bidding wars, said Lisowski’s business partner, Ty Voyles.
To be sure, the housing recovery has been uneven. In Northeast Washington, the boomlet has bypassed Benning Heights, Central Northeast and Deanwood. In the Zip code those neighborhoods share, 20019, the median sales price is down more than 7 percent from last year, and houses take more than three months, on average, to sell, RBI reported.