They’re an alternative to single-family homes, offering accouterments such as upscale kitchens, master suites and good locations. Most are geared to singles, couples or parents of one or two youngsters rather than a growing family.
Condominiums – and their sister designs known as townhomes and patio homes – are most common in metro areas, but sprout up in more limited numbers in towns and rural areas.
The properties are gradually sparking interest in a pricey real estate market low on inventory in which buyers look for varied types of residences. They also can double as investments either with owners renting them out or selling at a later date at a profit.
According to the National Association of Realtors’ latest report, condominium and co-op – condo-like properties operated by a group of owners – sales rose by a moderate 1.7 percent in October 2017 from a month earlier, to a seasonably adjusted 610,000 units. All the gains were in the South region, which has more than 40 percent of the condo total. Regions also include the Northeast, Midwest and West. Sales from a year earlier were unchanged nationwide and in the four tracked regions.
Separately, condo prices climbed 6.9 percent from a year ago to $236,800 in October. The West, which had the most expensive sales price in October at $361,800, saw the steepest year-to-year increase at 11.1 percent. The lowest price is in the Midwest, at $172,900, while the South had the scarcest price increase at 2.7 percent to $181,700.
Condos remain a smaller slice of the housing market; single-family home sales in October by comparison reached 5,480,000 – close to 10 times the condominium volume.
The units, typically managed by homeowners groups or professional property managers, are considered in some cases as an affordable housing source.
According to the NAR, which bills itself as America’s largest trade association with 1.3 million members, “the national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes could typically sell for more than condos.”
Real estate observers tend to concur that condos/patio homes/townhouses and single-family homes all sport pros and cons, and that the final decision is based on the buyer’s choices for amount of room desired, perks, land and price.
“While you’re considering a host of factors – the size of your family, your lifestyle, how much you love or hate yard work – you should also look at the varying costs that come with buying and maintaining single-family homes versus condos,” says Dan Rafter, writing for Quicken Loans.
“These costs might help sway you toward one property type or the other,” he says.
Rafter cites five expenses to look at: purchase price, homeowner’s association fees and assessments, maintenance, homeowners insurance and property taxes.
Median prices were actually $10,000 less as of April 2017 than single-family homes, the Realtors association points out. However, with HOA fees, that can cover lawn care to garbage pickup, “you can expect to pay between $200 and $400 every month,” Rafter says.
Maintenance costs can add up, although not as high as the 2-4 percent of house value that single-family homeowners should save, Realtor.com says.
Condo buildings will have their own insurance policies, paid from the HOA fees. “But you’ll also have to take out a homeowners insurance policy for your individual unit, which will protect you if your own unit is damaged or items from it are stolen,” Rafter says.
Trusted Choice, a group made up of independent insurance agents, says you can expect to pay from $100 to $400 a year for condo insurance, he notes.
Steve Gillman, a consumer-style writer, notes on the Penny Hoarder website that he and his wife “have owned and lived in seven houses and two condos in 15 years, and there were pros and cons to each.”
His favorites include:
Typically lower costs.
Lower monthly expenses.
Easier to take care of.
Amenities such as a pool, kids playground or dog parks are often included.
Good locations with parks, grocery stores and restaurants nearby.
Condo disadvantages, he says, include extra rules and restrictions, less storage space, smaller or no yard, less privacy, higher association fees or special assessments and a higher mortgage rate from a condo add-on charge.
© CTW Features
(Photos by Jim Lesinski)