Does the Gracie house look run-down? It doesn't strike me as looking particularly shabby, although it is hard to tell from the small photograph kindly supplied by Shelley.
I have never visited Washington, so am in no position to comment on the prices properties in the smarter areas of that city might command, but I am typing this from my desk at a plush Sloane Square estate agency and can safely assert that, if the equivalent of a house of this size came up for sale in Knightsbridge, Mayfair, Fulham or Chelsea, it would go for well in excess of two or three million pounds.
Perhaps Shelley could provide us with her impressions of the neighbourhood? She has, after all, visited the house in person. Colonel Gracie was a wealthy and well-connected gentleman. I find it doubtful that he would have chosen to live in a seedy location - although it is conceivable that his street or block may have come down in the world since 1912...