The predictions were dire at the start of the pandemic. Instead, historically low interest rates and a faster-than-expected economic recovery have contributed to an unprecedented real estate market. New home sales are at their highest levels in almost 14 years, with a seasonally adjusted 1.011 million units sold in August 2020 according to the U.S. Department of Commerce.
On the flip side, stay-at-home orders in the spring coupled with an already tight housing inventory resulted in an increase in home prices. In June 2020, the national median home price rose 2.8 percent from year-over-year (YOY) to a record-breaking $311,300. Subsequently, condominiums are making a comeback and have emerged as the likely alternative for home shoppers looking to escape apartment life, as inventory is high and costs are lower.
So, as an agent, when your client inquires about either purchasing a house or condo, do you know how to respond? We want to help you inform your clients so they can make an informed decision that’s best for them and their future. Here’s some key talking points when it comes to helping your clients decide on purchasing a house or condo.
More Bang for Your Buck – Condo
More times than not, condos will cost far less than the price of a stand-alone home. The National Association of Realtors (NAR) reports the median price of a condo is $231,600, nearly $80K less than the cost of a single-family house; the price gap is much wider when you look at different housing markets.
Sprawl Out with Privacy – House
No worries about having to share a wall with your neighbor. A resident gets all the privacy they need with a house. Plus, they have complete control over the look of their home. Want to knock down a wall and add an addition? Nothing is off limits with owning a house, compared to having a condo. That’s because owning a condo means strictly following the HOA (homeowner association) rules.
Social Interactions – Condo
As mentioned, a homeowner has a lot more privacy and space. However, on the social front, that may present challenges if you’re longing to be a social butterfly. Condominium living is being a part of a community. Sure, residents may have to share a wall, but they’ll have more opportunities to interact and make new friends in shared spaces, such as the mail room, club house, gym and swimming pool or at an HOA meeting.
When it’s Time to Sell – House
Condos are cookie cutter, with each unit resembling the next. It’s great from a maintenance standpoint – HOA takes care of fixes – but not so much when it comes to selling. Condos are difficult to sell, especially in a not-so-great housing market. That’s because they’re viewed as an “in-between” home from when you purchase a free-standing house. With houses, a resident can make it their own and invest in renovations and improvements that will attract buyers.
Buying a home – whether it’s a house or condo – will be the most important buying decision an individual will make in their lifetime. It’ll also be the most stressful. As a real estate agent, clients will look to you for knowledge and experience to help simplify the process and make a well-informed buying decision.
*Not all borrowers will qualify. Contact us for more information on fees and terms. Not intended as legal, financial, or investment advice. Contact your financial representative for more information.
Smart, Tim. “New Homes Sales Continue Their Surge in August.” U.S. News & World Report. September 24, 2020. https://www.usnews.com/news/economy/articles/2020-09-24/new-homes-sales-continue-their-surge-in-august
Ellis, Tim. “U.S. Median Home Sale Price up 3% to a New High in June.” Redfin. Published July 17, 2020. Updated October 1, 2020.
“Metropolitan Median Area Prices and Affordability.” National Association of Realtors®. Accessed October 7, 2020.