Camping Out for the Chance to Buy an Upscale Home
By David Cho and Sandra Fleishman
Washington Post Staff Writers
Sunday, March 7, 2004; Page A01
Camping out to get tickets for a Justin Timberlake concert or the first showing of "The Lord of the Rings" is old. Now people are queuing up for days in tents and under tarps for the chance to buy expensive new homes.
Louie Guimmule is among hundreds of people who want to buy into Chatham Square, Old Town Alexandria's newest townhouse development, where prices start at $560,000 and reach $1.1 million. When he stopped by the construction site last Saturday, dozens of prospective buyers, sleeping bags in hand, were lined up -- a full seven days before the developer was planning to accept contracts on the first, still-unbuilt units.
So Guimmule rushed to his apartment a few miles away, grabbed his North Face tent, staked a spot in line and hunkered down for the cold nights ahead.
"I was not prepared. I had to run home [to get supplies] and pay somebody to stay in my spot," Guimmule, a network engineer, said with a tinge of regret in his voice. "It showed you what kind of demand there was."
Tents spread along a street of historic homes in Old Town are one of the more public manifestations of the hot real estate market in the Washington area, where prices in some neighborhoods have doubled in the past few years. With low interest rates, unemployment below the national average and projections that new construction cannot keep up with the flood of new residents, there are few signs that things are slowing down. And there is an element of speculation to the lines: People are hoping that by buying early, they will pay far less than later buyers because prices will keep climbing.
Aaron Kilinski, an information technology consultant, said he has slept out on the streets of Arlington County twice: once to buy a million-dollar townhouse and once to buy an investment condo that cost more than $500,000. If he had purchased later, he said, prices would have jumped by tens of thousands of dollars.
There have long been overnight lines for people seeking scarce subsidized or affordable housing. However, camping for days to buy upscale properties is relatively new in the Washington region, developers and market researchers say. In the past two years or so, builders say, they have often seen lines forming a day or two before they open new suburban communities.
The Alexandria line, which formed so early and grew so long that the city shut it down Monday, was particularly visible. There were as many as 43 people queued up on Princess Street, sparking complaints from neighbors. The builder, Eakin/Youngentob Associates, promised afterward that it would sell its first units according to the original order of the line.
The potential for lines is greater than ever, said Tiffany Hamiel, who recently founded a District-based real estate line-sitting service, Real Estate Space Holdings Inc., that charges up to $400 a day to hold a buyer's place. She hired 25 people to hold 25 spaces in the Old Town camp-out this week and said she has five more jobs coming up in the next month.
"It's not so much happening with single-family homes, but with townhouses and condos," said Victor Furnells, regional sales director for the Meyers Group, a new-home research company. That's because new attached housing is becoming the norm in popular close-in neighborhoods where land is scarce. One Northern Virginia development of 525 condos, Furnells said, has 1,700 people on the waiting list.
Some real estate and personal finance experts suggest the lines are a publicity ploy by developers and a sign of an overinflated market. "It's frightening," said Stephen Leeb, a New York psychologist, author and personal finance consultant with Leeb Capital Management Inc. "It's like the tech bubble redux.
"It's something to be very wary of, because it's not sustainable. When you get this kind of frantic demand, history always shows that there's a very bad hangover."
Even though local builders say long lines when sales trailers open have been fairly common for at least two years, some in the business frown on the phenomenon.
Rather than making people line up outside trailers, "most builders are choosing to make it a little more comfortable for their buyers," said Steven B. Alloy, president of home builder Stanley Martin Cos. in Reston and head of the Northern Virginia Building Industry Association. "Most builders have gone to a different strategy for handling the housing crisis -- holding preview events, generally at hotels, which are the only places big enough to hold the crowds."
His company, for example, drew names out of a bin to create a list of bidders for 43 townhouses near the Vienna Metro station.
Robert Youngentob, president of Eakin/Youngentob Associates, developer of the Old Town townhouses and a number of other projects that have drawn tents for days, said the company does not want to inconvenience bidders and doesn't "encourage" overnight camping.
He said he shuns lotteries because customers complain that they are unfair. Offering the homes on a first-come, first-served basis, Youngentob said, "seemed the fairest, simplest way of letting people have some control over their destiny."
The firm's reputation as a trendy builder has preceded it at each successive opening, other builders say. Sales prices often have jumped by more than $50,000 from when the first units were sold until the next phase was offered. Such jumps can give a buyer a big profit even before a construction shovel hits dirt, which in turn intensifies the drive to be one of the first in line.
"We tried to keep lists based on when people contacted us. . . . But because there's so many different channels by which people come to us -- by the Web site, phone calls and from our signage -- we've never been able to keep an accurate list," Youngentob said. "All the ways we've tried have resulted in some people being unhappy."
Nina Goldstein, marketing manager for Winchester Homes, said her company first saw a camp-out 2 1/2 years ago outside a Burtonsville development. She said Winchester has been unable to find a solution that will not inconvenience customers.
"We were doing the e-mails on Wednesdays and telling people it was first come, first served on Saturdays. But people started coming on Wednesdays," she said. "Then people tried to guess when the e-mail would come out and started coming earlier. Now we send the e-mails out on Fridays to see that not so many are camping out for so many days."
The lines are not made up of people who would otherwise be homeless.
In the Old Town line, nearly all were middle-class professionals, real estate investors or professional line sitters.
The group spontaneously organized itself by drafting an agreement, with binding signatures, at an informal "town hall meeting." One rule, for instance, allowed people to take a break for "two-hour periods nonconsecutively a maximum of four times per 24 hour period." Another gave permission to sit in cars instead of waiting outside as long as the vehicle was within sight of the line.
By the third day, people looked a bit haggard. Beards lengthened.
"It was amazing," said architect Michael Amin, who held the No. 9 spot. "If you didn't know what was going on, you would have thought, 'Who are these people?' They didn't look like people who are qualified to buy a million-dollar house."
Jamie Langlie, a federal employee who lived in a pup tent for two days in May outside an Eakin/Youngentob sales trailer at a $399,000-and-up townhouse project in Wheaton, said the line there also developed spontaneously.
Langlie and her husband and adult children had been eyeing the townhouses for a while. They expected to start standing in line early on the Saturday that contracts would be accepted.
But she drove by the development at 4 p.m. on Thursday and there were already people waiting. She phoned her family and asked, "'Well, how much effort are we willing to go to for it?' And since I had time off from work already, I said, 'Why don't we . . . get a chair and I'll settle in.' "
Langlie said she did not see any indication that people in the line might have been paid by the developer. To the contrary, she knew some families who owned nearby restaurants in Wheaton. And she said the experience of chatting with "such a diverse group" of potential neighbors proved positive: "It left a lot of us feeling like we would like to live here."
She did not consider her two-day stay inconvenient. The weather was fine and the atmosphere around the trailer was jovial. The fact that she ended up with a $427,000 three-bedroom unit makes the memory sweet now. Similar units are now priced at $590,000. |
