I have a theory, ugly is a big enough negative to negate any investment in increasing square footage. The reason behind my theory is that the ugly 2000 sq ft house is competing against the nicer looking 2000 sq ft house, not the surrounding nicer looking 1000 sq ft houses. There are two examples.
First is 26 P St NE. If you notice on the Redfin site the complete ugly of it is not revealed. I noticed the exterior photo stops so you don't really see the 3 story popup that the builders threw up on it. The asking price is $799K. I say it is worth $400K on a good day and that's just thinking about how much it is going to cost to hire an architect who can design something that can redeem the property. This has been on the market for nearly a month. I'm guessing it's going to be a long time and several price reductions before this monstrosity sells.
Is next, and the best proof of my theory, 1522 3rd St. NW.
This puppy has been pretty empty of real tenants for years. That pop up has been on top of that house for at least 3 years if not more. Check out the link above and scroll down to the property history and the number of times it was bought and sold over and over again. It looks fishy, but that's the bank's problem. As I can remember it was never sold to real people, just investors. Also not how the price keeps going down. It began as $349K, then delisted and relisted at $335K, and since then has been slowly going down and is now at $245K.
Let me say that the 1500 block of 3rd St is awesome, minus the feral children at the corner of Bates and 3rd. There are a great set of involved neighbors and somewhere over there I think is where ANC Anita Bonds resides. If the house gets down to say $220K, buy it, redo the popup (move it to the rear, turn it into a covered roof deck, tear it off) and if you plan to stick around for 5-7 years it would be totally worth it.