WSJ Examines an Age-Old Question: Condo or Townhouse?

• September 9, 2009
• 6 Comments

by Mark Wellborn

Instead of our usual Ask an Agent feature this week, we decided to look at a piece from The Wall Street Journal that examines a frequent quandry for homebuyers in major cities: Should I buy a condo or townhouse?

A common misconception about condos is that their monthly fees and lower resale potential generally make townhomes a better investment. However, the article provides practical information regarding the appreciation of one property type versus another that dispells this generally held belief:

“As for building equity, I’ve often heard real estate agents say that townhouses appreciate faster than apartment-style condos over time. But that’s hard to prove, because data-gatherers aren’t consistent in how they report townhouse sales and prices. Some group them with condos because owners share costs for at least some common elements; others with single-family homes because they more closely resemble them architecturally. The National Association of Realtors puts townhouses in the single-family group.”

However, perhaps the more important point that the article makes is that with the number of homebuyers both young and old coming into the market, “the pool of potential buyers” will be large for either property type regardless of when you sell.

This article originally published at http://dc.urbanturf.com/articles/blog/wsj_examines_an_age_old_question_condo_or_townhouse/1291

6 Comments

1. Brandon Green said at 1:59 pm on Wednesday September 9, 2009:

   Excellent post-I have a lot of real estate clients asking me about this issue.

1. Bloomingdale res said at 7:32 am on Thursday September 10, 2009:

   There is no single answer that fits every situation. What I have noticed is that a house will usually have a higher price tag than a condo in the same neighborhood. Something else to consider is that there is a trend in downsizing in preference to mcmansions sort of like the car market (compact cars vs SUVs). I wonder if buyers ponder too much on the investment aspect of real estate purchase.

1. benji said at 9:56 am on Thursday September 10, 2009:

   Completely agree with the last point in the post and that is not because I just bought a condo. Regardless of when you sell in the future, there will be as many people looking for condos (perhaps more) as those looking for townhomes or single family homes.

1. Z said at 5:21 pm on Thursday September 10, 2009:

   While the number of historic rowhouses in D.C. cannot increase, the number of new condos can continue to grow.  At a certain point, buyers of new condos will always have a potentially increasing supply whereas people seeking to buy historic rowhouses have a limited supply.  It would seem to me that the historic rowhouse will be more likely to keep or increase its value.  (Of course, I realize that some condos are in historic rowhouses and that some rowhouses are not historic).

1. Matt said at 10:17 am on Friday September 11, 2009:

   I think the article should have emphasized up front that it really is not an economic decision but a lifestyle decision.

1. Katie Wethman said at 7:22 pm on Sunday September 13, 2009:

   Though condo fees cover important costs (exterior maintenance, insurance), buyers nonetheless should take the time to think through how much “mortgage” that fee would buy them—they may find that they can afford a higher priced townhouse vs a condo assuming the townhouse doesn’t need any large capital expenditures in the near term. Buyers should also consider how quickly they might outgrow a townhouse vs a condo—it may be worth it to move up a bit in price if it’s a home a buyer will stay in for years longer.

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