By Mike Bodeen · 9 October 2017
Which Appreciates More?
I’m fairly often asked by folks, with reference to value, “Which is better to buy; a single family detached residence or a condo/townhouse?” For most of my 40 years in the real estate industry, the standard answer was, “Well of course, it’s a single family residence – by a country mile!”
When comparing the times when real estate values slumped, it seemed like condo sales were the first to drop in value and the last to recover.
Well, according to Michael Orr of the Cromford Report, the times have changed – at least for now. We’re publishing two of his city appreciation charts today showing condos and townhouses versus single family detached. Statistically speaking condos have the edge!
In order to make an apples to apples comparison, Mr. Orr only used zip codes that included 2,000 homes (and condo/townhouses) or more. If you compare individual zip codes for single family detached vs condo/townhouses you’ll get a pretty good idea of what Mr. Orr is talking about.
Why? I’d have to say, the demand is greater. Condos are less expensive than single family, and it’s been a way for folks to break into the housing market who couldn’t afford single family. Plus condos are often preferred by investors to rent out because of price, common area maintenance, and built in guardians of the complex. Even though there are higher monthly dues, condos are still more affordable.
So, check out the two charts below. See what you think!
Market data referenced in this article comes from The Cromford Report.