Condos Are Hot Right Now; Are They the Right Move for You?

These days, many people are asking themselves “Should I buy a condo?”. According to a new report from real estate brokerage Redfin, the average condo sold for above asking price in June — only the second time that’s happened in the last nine years.

Condos also sold faster than ever in June, with a mere 22 days on the market, on average.

According to Daryl Fairweather, chief economist at Redfin, it’s a sign that rising single family home prices are pushing buyers out of the market.

“Many buyers who have been priced out of the market for single family homes have turned to condos,” Fairweather said. “Earlier in the pandemic, many buyers shunned small condos in favor of large detached homes with space for offices and homeschooling. But now that many Americans are vaccinated and some are returning to the workplace, extra space isn’t as necessary and the benefits of shared amenities like a gym or a pool are more attractive. And the biggest benefit of condo living is the more affordable price.”

Are you considering buying a condo over a higher-priced single family property? Let’s look at it from both sides of the equation.

Why buying a condo might be smart

The biggest advantage in this market is that your potential condo purchase comes with lower prices. While $304,000 is no bargain, it’s much lower than the average single family home price, which sits at $405,000, according to Redfin’s data. What’s more? Condos are sometimes cheaper to insure,and condo fees are often cheaper than home association fees, saving you even more money in the long run.

As Fairweather mentioned, there are also community amenities you can take advantage of with a condo, and in many cases, there’s a lot less upkeep, too. Your community association will usually take care of exterior maintenance around your condo building, like mowing the lawn, cleaning out the gutters, snow removal, or power-washing the brick. That means less hassle and less spent on maintenance over time.

Why you may want to think again

Obviously, condo ownership has its drawbacks. They’re usually smaller, and you may have less control over your property (there are often very strict HOA and condo association rules).

A condo association comes with added monthly fees, too, which go toward maintaining the community and paying for the HOA fee. A unit owner may decide to rent out his or her condo unit as an investment property, which can lead to tenants who are less invested in pleasing their neighbors.

Finally, you typically have less privacy with a condo than a house. Your walls are shared with other units, and you may have neighbors living above, below, and very close beside you. Their music, parties, and even just their newborn baby in common areas might keep you up at night (or vice versa). The bottom line about buying a condo

Becoming a condo owner can be a good option if you’re on a tight budget and have limited cash flow, but they’re not perfect by any means. Still think a condo community is the right move for you? Talk to your real estate agent about becoming a condo buyer and get in touch with an Embrace Home Loans office in your area. They’ll walk you through the process.