During the recession a few years back, condo values dropped more than single family homes. Lenders laid more restrictions on condo loans, likely due to higher foreclosure rates. That, plus single families becoming more affordable, caused the condominium market to lag once the market turned around. I have noticed a growing third factor that can affect this ownership style – their more restrictive nature. This cuts both ways and is why some folks prefer condos, but repels others. The controlling nature of condo rules and regs can bring comfort, security and conformity, but can also feel overbearing and unreasonable. The closeness of the units can magnify each of those feelings. Their main attribute of being a low maintenance lifestyle at least helps offset the monthly association fee.
The most common questions I field from condo shoppers are (1) pets, (2) renting, and (3) monthly fees. (1) Due to the increasing popularity of pet dogs, I expect more associations to allow pets. Some have even changed their rules recently to accept them. Most newer developments have size, number, and “vicious” restrictions, but tend to allow dogs and cats. (2) More people want the flexibility to rent their home out, whether for income, a temporary job transfer, or prices are down when it is time to move. A recent trend is associations allowing up to 10% of units to be rented. (3) Condo fees have a habit of rising faster than inflation. Pools and elevators can add significantly. I have seen some condos selling for $200,000 with $800/mo fees. That would add over 50% to your mortgage at today’s rates. Pay attention to what this fee covers – some are landscaping only; others cover all exterior components and some utilities, even a doorman (the $800 one – we’re movin’ on up). These changes explain the importance of obtaining all amendments to the original condo indentures, which the seller provides. One unit I sold had 3 revisions on renting alone.
Given all this, condos are still a popular lifestyle. Prices are headed back up, and are selling quickly in many areas, so YES, condos are back. For the traveler, the non-fixers and non-mowers, the security minded, the price conscious, the physically limited, the downtown oriented, the walker-to-everything, and the conformist. There is a wide variety of factors that will continue to attract buyers to condo developments. The current demand is higher for the villa style, which has no one above or below you, direct exterior entrance, attached garage typically, and lower monthly fee. Technically this is a single family, not a condo, it is the crossover of home styles, and I expect this style to continue growing.
Update on Aluminum Wiring article — since writing last month’s message on residential aluminum wiring, I have spoken to the West County EMS fire marshal, who said the more favorable connector for aluminum wiring now is AlumiConn, which is a screw-down block. They are larger than the purple wire nuts and may not fit in the original box, possibly needing a box extension, but he feels these are safer.
Happy condo hunting!
Gary Hoeferkamp, Broker - Owner of Hoeferkamp Real Estate 