Making a home purchase is the single biggest investment you will ever make….well, unless you are already a millionaire. In my years of selling real estate, I’m helping you make that decision on that investment. We work together to find a house or condo that fits your needs, and your budget, and soon, you call it home. I specialize in condominiums and I’m often asked…
Is Buying a Condo a Wise Investment?
Well, you can actually ask the same question about a single family home, depending on where you are buying!
But, let’s look at buying a condo in Midtown Atlanta. When you walk the streets, and see all those cranes, you might not think so. But 99% of those cranes are building FOR RENT apartment buildings, NOT FOR SALE condominiums. So right now, you have to look at re-sale condos if you are looking to purchase. (The exception is One Museum Place, starting at $800,000 and Seventh Midtown, starting at $740,000 …price points that are not for every buyer!)
So I’m asked, “What will happen when any of these apartment buildings convert to condos?” Good question, and not so easy to answer. But based on the current construction costs, if any of these buildings were to convert, their sales prices would most likely be much higher than any of the current resale buildings. So, the demand for condos in Midtown will most likely remain fairly strong, given the limited inventory of both resale and new construction.
After taking a hit in the housing downturn, condos in many major cities are seeing some great price appreciation, Atlanta included. A report for Zillow (hey, you know I don’t always trust what comes from Zillow…..) shows that the stigma against buying a condo has changed, and the appeal is back, especially amongst younger buyers. The chart below gives you an indication of the appreciation in Atlanta and other major cities!
But there are other factors to consider. If you think you job might have you headed to another city in the next couple years, buying might not be the right choice for you. If you purchased a $250,000 condo today, I’m not 100% sure it would be worth $270,000 in just a year. And remember, when you sell, you may be looking to pay those closing costs YOU asked for when you bought, along with the marketing fees.
But I tell all my clients that buying long term, is a much better decision than renting and tossing that money out the window each month. I’ve seen many Midtown Atlanta condos go up in value in the past few years. The increase in value has slowed somewhat from what it was, but the prices are still going up. I’ve had a buyer pay $170,000 in 2013 and the same condo is now selling in 2015 for around $240,000.
I’d still say that buying is a wise investment.
Ever contacted a real estate agent and one of the first questions they ask you are, “Are you pre-approved for a mortgage or will you be a cash buyer?” And has that kind of ticked you off? I mean we have barely spoken, and you are asking me such a direct question!!!!
Today, I read an article in the New York Times (I’ll link to it below, but you may have to have an online subscription to read it) that Fannie Mae is going to start taking a longer view (look) at your credit history when looking at your mortgage application! What does that mean? Right now, Fannie Mae require a “tri-merge” credit report that takes information from all three credit bureaus….TransUnion, Equifax and Experian. But, when they do that, it’s a “snapshot” at that moment when your credit is pulled.
