The Pros and Cons of Owning a Condominium, According to Condo Owners

12/8/2020

When Karen Unger was looking to make the leap from apartment renter to homeowner in the 1990s in Southern California, she briefly considered buying a house. But she quickly realized she’d want an older one, with character, and that the upkeep would prove expensive, maybe even overwhelming.

When Karen Unger was looking to make the leap from apartment renter to homeowner in the 1990s in Southern California, she briefly considered buying a house. But she quickly realized she’d want an older one, with character, and that the upkeep would prove expensive, maybe even overwhelming.

So Unger decided to buy a condo instead, in a small complex with only 13 units. “All my neighbors were great,” she remembers fondly. “People were quiet, respectful. There were no kids. That wasn’t a rule; it just worked out that way. We were self-governing. It was all pretty low-key.”

Most external maintenance and repairs were covered by her homeowners association, or HOA, which charged $125 every month. But five or six years in, her HOA fees soared and her satisfaction with condo living plummeted — although she chose to stay anyway, because maintaining her own home was even less appealing.

Farmers Condo Insurance

Find out why condo insurance from Farmers is a smart choice.

illustration of different apartment buildings

What are the pros and cons of buying a condo?

PROs

  • Condominium purchase prices are, on average, 10 percent less expensive than houses.
  • Most exterior condo maintenance, like a new roof, is typically covered by monthly HOA fees managed by the homeowners association.
  • Condo complexes often include amenities (think: pool, fitness center) that could add tens of thousands of dollars to the price of a single-family home.

CONs

  • Condo HOA fees can increase.
  • Condos often are subject to more rules and restrictions, which may include exterior paint, landscaping, the presence of children or even the size of a pet.
  • Condos may not appreciate in value as much or as quickly as houses.

SOURCE: National Association of Realtors

A new law means condos may be more affordable for first-time buyers

Shared upkeep costs, as well as affordability, are high on the list of reasons homebuyers choose a condo over a single-family home. According to data from the National Association of Realtors (NAR), as of June 2020, the median price of a condo was $262,700, or about 10 percent less than the $298,600 median price of a single-family house.

Among reasons a buyer might lean away from buying a condo: fees can rise and lenders may require a bigger down payment on a condo, because its value depends on not just one owner but the entire complex, according to Gay Cororaton, director of Housing and Commercial Research at NAR.

"... lenders may require a bigger down payment on a condo because its value depends on not just one owner, but the entire complex."

— Gay Cororaton, NAR Director of Housing and Commercial Research
To read more, visit farmers.com.