The buzz is that the condo market is slowing down. Thus, the hot question is whether to go condo or apartment, a key one for both developers and potential home buyers alike. First, a couple of facts:
– Condo sales in the U.S. set a tenth consecutive sales record last year (896,000 units), 9.3% better than 2004.*
– Condos for the first time ever at the end of last year sold for more ($223,500 average) than single-families ($218,600).*
– The mortgage interest rate is about 1.1% higher now than it was last year. That means to maintain the same amount of payments for that $220K condo at 5.7%, you could only buy one for $196K at 6.8%. However, average condo prices are not dropping that low.
So the answer is, it depends. If you’re finding or are looking to build average condos, better to go the rental route until the market corrects itself and prices drop according to the interest rate hikes. But not so if investing in unique properties with cooltown attributes, like The Pulse (pictured) in Cincinnati, whose developers are sticking with condos. Not only is The Pulse unique in the market with concrete floors, 10 ft. ceilings, movable walls and rooftop decks, most importantly, it’s priced less than the national average because it’s strategically located in a ‘not-quite-there-yet’ neighborhood where homes average $96,000. You may be sorry if you don’t go condo in cases like that…
*Source: National Association of Realtors