It’s no secret that home values have skyrocketed at the national level. We can blame low mortgage rates and a limited supply of available apartments for this.
But not only are single-family house prices rising. Condominium prices have also risen, hitting a nine-year high in June, according to Redfin. Last month, the average condominium sales price increased 20.3% year over year and is now $ 304,000.
It is also noteworthy that 42% of the condominiums were sold for more than the asking price. And condominiums were blown off the market faster than ever before, with an average of just 22 days. In contrast, condominium sales took an average of 43 days in June 2020.
Start your journey to financial success with a bang
Get free access to the select products we use to meet our money goals. These fully vetted tips could be the solution to increasing your credit score, investing more profitably, building an emergency fund, and much more.
Should You Buy a Condo Now?
If you don’t know what a condo is, it is a unit that you own in a larger building. When you buy a condominium, you are responsible for the maintenance of your home, but not for the maintenance of the common areas and other building structures outside of your home, such as the roof or elevators.
Typically, when buying a condominium, you must join a homeowners association (HOA) and pay monthly fees that cover upkeep of the common areas. You need to consider these fees in addition to your monthly mortgage payments.
Even though condominium prices have increased, you may still be spending much less on a condo than you would on a detached house. So, if you’re looking to buy a home but are on a budget, a condo could be a good solution.
Even if you’re not particularly skilled and don’t want to get stuck with tons of maintenance on your property, a condo could be good for you. While you need to maintain the inside of your device, there is no need to mow the lawn, remove snow, or do the outdoor maintenance that comes with owning a standalone home.
On the flip side, a condo is likely to give you a lot less space than a detached house, and you generally won’t get much or no outdoor space. Some condos have a patio or balcony, but if you want a large private yard for your dog, don’t expect a condo to offer one.
Speaking of dogs, some condos aren’t that kind to them. It is common for the HOAs that set condominium rules to either ban dogs or to ban certain breeds (namely, those that have a reputation for being more aggressive).
And not only dogs can be banned when buying a condominium. Depending on the rules your HOA sets, you may be prohibited from running a home-based business or renting it out for the short or long term. Before buying a condominium, make sure that you know all the rules and restrictions so that you do not become dissatisfied with your housing situation.
Buying a condo could be a smart move and help you get your foot in the door in today’s real estate market. Just don’t be surprised if you end up paying more for this apartment than you originally expected given the soaring prices.