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!