Are condos going extinct?
Not exactly...
But condo sales have been consistently lagging behind Single-Family homes in the last several months and years.
In July alone, condo sales were down 12% nationwide from the previous year contrasted to a mere 1% down tick for single-families.
Here are a few things to keep in mind if you're on the house hunt and considering a condo:
1. Slower appreciation
Overall, condo list prices are down 5.4% from a year ago as opposed to single-family homes which are up 0.2%.
From an investment perspective, it may take longer to see any ROI on a condo vs a single-family.
2. HOA Fees
The average monthly homeowners association fee for condos listed on Realtor.com is $650 - add that to already sky-high mortgage rates and what seems like the more affordable option, might have you priced out before even getting through the door.
Part of what is pushing HOA fees higher is an influx of claims paid out vs premiums collected, specific to condos. Complexes built in the 70's & 80's are prime for deferred maintenance. Insurance providers are becoming more strict with which policies they write for and the costs are adjusting accordingly.
Higher premiums + rising maintenance fees = higher HOA dues
3. Supply > Demand
Given slower appreciation and higher HOA monthlies becoming more common, condos are sitting an average 8 days longer on the market.
On the flip side, longer days on market gives you a unique negotiating footing when making an offer. Econ 101: what happens when supply surpasses demand? Prices go down.
Moral of the story here is if you're heart is set on that 2nd floor walk-up, make sure you have a good REALTOR to help you navigate the nuances of condo living and advise you on the best decision based on your short and long-term goals.
Sarah Aguilar, REALTOR
Arizona | Nevada
520-878-7603
realtor@sarahaguilar.com
BIG Realty Solutions SA662054000
Show Vegas Realty S.0183808.LLC
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