To condo or not to condo? That is the question.

Buyers are smart:

Q: I want to own something because it makes much more economic/tax sense, but I’m single and really like living in Midtown because I can walk to work and the park and restaurants and such. I know buying a single family detached house is the best bet from an economic perspective, but it just doesn’t suit my lifestyle right now. I have heard buying a condo in a high-rise building is a very bad decision because it will be very hard to sell and get your money out of it down the road. Do you agree with that? Would I at least be able to get out the money I put into it if I bought a condo and lived there 2 to 3 years.

A: Well buyer – that depends. No one has a crystal ball and if we did, one of us would be really rich. In all practicality, here is the key: Midtown is GREAT, in fact, check out all the new development with Atlanta’s Midtown Mile growing as I type. It is a very popular spot for all the things you mentioned that are important to your lifestyle. I have many clients that just can’t fathom the true idea of ‘home ownership’ in terms of the responsibility of owning a single family home (SFH). They squirm at the idea of having to take care of the lawn, the exterior, typically don’t have pools or gyms and in terms of affordability, well, it’s typically more expensive when you talk apples to apples in terms of quality and proximity to desirable areas. Sometimes your dollar can go further with a condo or townhome.

Buying a SFH is often seen to be a better investment (although many things come into play here) in the short and long term simply because land is non-replaceable and you can’t replicate it. The condo market in general has felt a tough sludge right now because the market has become over saturated with high-rise after high-rise developing similar products within a close proximity of one another, so they, in realty are all the same (if we are talking specifically about units). If you were the buyer, you are most likely going to shop for the least expensive place that offers the most amenities (price, condition, perks, location) etc. that you could find, right? I have a few condo clients that are trying to sell what they think is a ‘niche’ product, however, they’ve slowly come to the realization, that a loft or condo (which at one time was very pioneering) is now very non-niche.

Consider this, some people buy on emotion, and some people buy on mere value. You need to buy something with both. If you do decide to go the condo route (which I’m NOT advising you NOT to there are many many great places available), it is important to work with someone that will help you find something that is UNIQUE, charming (define that how you will) and of good value. That way, when it is time to sell in 2-5-10 years, you have something that is different and you bought it a the right price. The Midtown area, although many new high-rises are coming, is going to become an increasingly popular area to live as people migrate to the city to shorten commute times to work, play or just be a part of a great community. Many people are still buying condos because they CAN get a good deal now either from a very motivated seller or builder incentives etc.

On another note, as a market expert and watching the numbers (inventory & price), it seems that the Atlanta market HAS HIT BOTTOM and as the Wall Street Journal proclaims “the housing crisis is over“?!?!. On average in the Atlanta MLS Metro area, inventory has seen a consistent down turn as prices begin to slowly bounce back. We know that this may take some time to turn around completely, however, the time is NOW to get on those deals.

Real Estate is one of the best investments you can make beyond the tax incentives and write-offs. Interest rates are at historic lows today and there are many of great deals to be had. How else can you build wealth borrowing someone else’s money? It’s a no brainer. Consider yourself lucky enough to pursue the American Dream of homeownership!

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7 thoughts on “To condo or not to condo? That is the question.

  1. I have a question for you. My husband is the head field engineer of Atlantic Station II. He was also the head engineer of Atlantic Station I when it was being built. During the build of Atlantic Station I, the condo units were all sold before the building was half way finished. Now, in the build of Atlantic Station II they are over half way finished and less than a quarter of the units have sold and over half the units in Atlantic Station I have been foreclosed on. So my question is, “Do you think the condo units of Atlantic Station I will fill up again and will Atlantic Station II units all sell in the current market?”

  2. Really, what you should be looking at is shipping-container housing. Cheap as dirt, daggum near impossible to destroy, stylishly modifiable, and good for getting rid of what would likely otherwise be waste.
    That, or fly a hot-air balloon around the world until you build up enough interest in the bank to afford one of Atlanta’s super-priced pieces of property w/ a McMansion resting atop it.

  3. You know, I wonder the same thing sometimes when I go there to work our or see a movie. It’s such a great city within a city. I think out of the gates, Atlantic Station had SOOOO much hype and pretentiousness – e.g., we want our own zip code, that it created a fuss for people getting in.

    As I mentioned in a previous post, the newest and greatest thing draws the most attention in this condo market. I think with the slowing of the market, phase two needed to have a reality check with pricing and occupancy. They are not the only new development begging buyers to buy right now.

    I DO think that the Atlantic Station vacancies will vanish, but it’s tough to tell how long. I feel a bit for phase 1 buyers, as I have a personal friend that bought pre-sales, and his latest appraisal has him at about $150K below what he bought it for….that hurts.

    I also think that with some of the structural/drainage repairs needed, it scared off many potentially interested buyers coupled with over-saturated inventory in the Atlanta condo market and the mortgage crisis our nation is feeling right now. 2-3 years ago, getting a loan with no income or no assets was normal – well, we’re feeling the repercussions of that now with all the foreclosed units.

    I wish Atlantic Station all the success in the world as I think it has done great things for Atlanta.

    Will your husband be involved with the Ford Plant re-development?

  4. Stephen, you are funny. I will say I like your reasoning for the ‘reusable’ aspect of the shipping container – recycle, reuse!!

    In contrast to your statement regarding Atlanta affordability, check out the 2008 Demographia International Housing Affordability Survey (www.demographia.com/dhi.pdf), that states that Atlanta is ranked 39th in affordability in the world’s metropolitan cities, close on the tails of Augusta, GA (23rd). I found it interesting, that I didn’t know myself, that the top 50 metropolitan cities in the world for affordability are exclusively in Canada & United States….neat huh?

    I say get in while the gettin’s good. We may be more saturated than New York if we keep growing like this!

  5. Where environmental concern dovetails with economic efficiency, I’m all over it. In this case, the environmental benefits could just as well be a secondary factor, as the novelty of the idea and the inherently less expensive nature of mass-manufactured-device reuse combine to create what I see as a tantalizing opportunity.

    Who knows, maybe it will give people a wider perspective on goods that are simply lying around after having served their primary initial purpose and give them the inspiration to reuse more and better than ever before.

    As for metropolitan saturation, I don’t think most people would mind it as long as we keep good southern manners. What I took away from NYC was that no one seemed interested in anyone else unless there was money on the table. I wouldn’t want that to happen to the heart of the South, would you?

    I am impressed with Atlanta’s apparent ranking in metropolitan affordability, however. I guess I have little exposure to the price levels of large cities as contrasted with smaller towns. What’s immensely expensive for me may just be an incredible bargain for a long-time city-dweller.

    Just so long as we don’t enact rent control laws, Atlanta ought to stay fairly high on the affordability list.

  6. I am a homeowner just NorthWest of Atlantic Station and work at Georgia Tech. My 1961 brick ranch keeps me very very busy in maintenance. Mowing the yard, fixing the lawn mower, putting a little patch on the roof, pulling the leaves out of the drainage paths, and on and on. I am a very hands-on person, but it takes lots of time to keep the house from deteriorating. I must block out several saturdays over the next three months to just rake leaves. Paying someone to do those tasks can really add to the cost of home ownership. I also had my house broken into recently and they stold about $7000 in laptops, guns, and a swiss watch. I think condos have better odds of not being plundered. Sometimes I envy the condo-owner that spends time at their pool. But then again, there is a surprising sense of personal peace that I have in owning a 1/3 acre lot. That is something I was not expecting when moving into my house for the first time.

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