Along with the mystery behind what condo fees cover, many homebuyers wonder how these fees affect unit prices. For example, do high condo fees go hand-in-hand with high condo prices? All else being equal, will a unit with a high condo fee have a lower purchase price than one with a low fee? We will attempt to answer these questions below.
“Condo fees are usually inversely related to condo prices,” Long & Foster’s Rachel Valentino told UrbanTurf. “In other words, the higher the condo fee, the lower the list price.”
Valentino noted that she sees this inverse relationship illustrated frequently in older buildings like the Watergate or many of the condo buildings near Massachusetts Avenue and Cathedral Avenue in Wesley Heights. She said that clients will frequently call her when they see a low-priced unit in a good building, but upon further inspection it is realized that the unit has an extraordinarily high condo or co-op fee.
Valentino acknowledges, though, that the link between condo fees and condo prices is complicated.
“You have to make sure you are comparing apples to apples because condo fees cover different things in different buildings,” she said. “If the condo fee is higher because it covers a number of costs and amenities, then the condo price won’t necessarily be lower.”
Realtor Lou Muscarella with Century 21 New Millennium says that it would be pretty difficult to find condo units in different buildings that are the same in every aspect, except for the condo fee. That said, in many cases, a condo with a higher fee could have a lower purchase price.
“A condo fee above $500 definitely takes away from the value of a property and becomes almost like an incurable defect along the lines of a location on a very busy street or a ground floor unit,” Muscarella explained. He said that condos with a high fee typically take longer to sell and anything which sits on the market for long will naturally require a price reduction before it will go under contract.
Muscarella and Valentino both said that appraisers may look at condo fees as part of their estimate of the property value, since the fees are part of any complete real estate listing. It would be expected that fees which are exceptionally higher or lower than the norm for a particular size and type of condo would have an impact on the appraised value. But if those high fees come with a swimming pool, secured parking, a fitness center and a gym, they are not likely to lower the appraised price.
This article originally published at https://dc.urbanturf.com/articles/blog/do_higher_condo_fees_mean_lower_listing_price/1802.
Most Popular... This Week • Last 30 Days • Ever
Here are some precautions to take before buying real estate with a buddy.... read »
UrbanTurf takes a look at the sizable (and growing) residential pipeline southeast of... read »
DC landlords make more money listing their one- and two-bedrooms on a long-term basis... read »
The neighborhoods with the lowest priced homes for sale are on opposite sides of the ... read »
The application is for an 11-story development that would deliver 160 units at 610-62... read »
Harry Wardman is responsible for developing huge swaths of northwest DC, from row hou... read »
With interest rates reaching their highest levels in 14 years, it is critically impor... read »
A stately five-bedroom Woodley Park house has been home to not one, not two, but thre... read »
The most active developer in the Union Market has more plans on the boards.... read »
Lowe Enterprises has big plans in the works for what was the first phase of four-buil... read »
With this weekend's DC houseboat tour a day away, UrbanTurf thought it only fitting t... read »
President Obama travels to Denver this morning to sign the stimulus bill that has bee... read »
In this week's installment of Ask An Agent, a reader wonders if there is a rule for h... read »
As The Wharf prepares to begin construction, DC's houseboat community heads to its ne... read »
In this week's installment of Ask An Agent, a reader asks a fairly common question th... read »
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!
Intro guides for first-time home buyers
Awesome and unusual real estate from across the DC Metro