Home prices have surged in the past year, forcing many first-time buyers to consider a condominium or townhome because these options are generally less expensive and more practical for smaller families. Regardless of whether you're contemplating buying a unit from a fully-serviced building, or a converted multi-family home, condominium living can be quite comfortable - even more so than the traditional four square. But is one of these the right choice for you?
To answer this, we've come up with a cheat sheet to guide you in your perennial property decision which we hope will arm you with the right tools to assess these communities, that come with a different set of rules and issues than a traditional home. We'll also be considering the latest and hottest housing numbers, so you know what to expect in the market once you've made that bold move into buying.
QUICK CONDO 101 Buying a home is undoubtedly complex. But with condos, there's even more to consider, from community rules to fees and finances. Here are some of the things you should scrutinize when buying into a condo complex:
Finances: One of the biggest things most would-be condo dwellers overlook is the monthly cost of homeowners association (HOA) dues, which cover the cost of regular maintenance and repairs. In Boston, dues can range from an average of $80 to $220 each month. There's also the possibility of special assessments or temporary fees to cover repairs or improvements, if the event arises.
Getting a good deal is not just about who has the lowest monthly fees. Often, communities will fail to collect enough dues from residents for years, and then wind up levying huge bills for repairs such as new siding or new elevators that can cost residents thousands. The amenities you get for those monthly dues can vary widely and can include such things as window washing, adoorman, health center, party room, pool, etc. The thing you want to look at is what you are getting for your money with regard to the fees and how different buildings compare.
You also need to know how a building or community deals with delinquent dues, so you can rest easily knowing that your own dues are not going to vain. The best question to ask your condominium management is: how long do they wait before placing a lien on a unit whose owners are delinquent? This will give a better sense of how management deals with that sort.
You, together with your broker or agent, should sit down and comb through a community's financial documents looking for upcoming assessments, as well as review its reserve study, which will tell you whether a property has enough money to cover needed upkeep and repairs in the years ahead. This will also appease whatever doubts you may have with regard to where your monthly fees are going.
In addition to getting yourself qualified for a loan, you need to make sure your building passes muster. If it has too many HOA delinquencies or if litigation is pending, it might not make the grade with lenders. You can ask the building manager or seller's agent if the building is eligible for Federal Housing Administration loans. Most of the time and because of the strict Fair Housing Act enforced in the Commonwealth of Massachusetts, bigger condominium complexes often don't have an issue with this. Smaller, multi-family homes that are converted however, sometimes hits a snag.
Rules and policies: Just as important as a community's finances are its rules and regulations -- or covenants, conditions and restrictions (CC&Rs.) If you don't go over these with a fine-toothed comb, you might want to move out as quickly as you moved in.
For instance, you might find out that a particular building doesn't allow dogs, or dogs of a certain size. So Fido or Frida would have to go. Or, you might discover that the wood-frame condo complex doesn't allow hardwood floors -- bad news for some allergy sufferers. These rules can dictate everything from what you can put in your window to what you can hang on your front door or put on your balcony, which means you might not be allowed that charcoal grill. In many instances, you won't be able to plant anything around your unit. Can you live without that tiny plot of tomatoes? Another thing that people should ask about is parking. Is it reserved? How many spaces do you have? Where are your friends or visitors allowed to park? Are there quiet hours? What is the policy on renting out units? Make sure you know the answers to these questions before you buy.
Going to miss your open spaces? Don't worry, places like Archstone North Point and 100 Memorial Drive have vast grounds, public spaces, and indoor pools where you can still have the comforts of a full-fledged foursquare home. Check out our hotlist of condominium buildings here.
Satisfaction with management: You may also want to figure out whether residents are generally satisfied with the property's management. Unfortunately, there aren't a lot of public resources for buyers trying to research communities and their associations. However, board-meeting minutes are a great way to find out what repairs are coming up, what issues neighbors are squabbling over and how money is being spent. If a lawsuit is pending, you'll also likely find some discussion of it here. Granted rummaging through transcripts could be time-consuming, so take up the task to your broker or agent but only do so if you're really interested in the property; otherwise you might be distracting their attention away from finding you that perfect piece of property.
Lifestyle: Lastly, you should make sure you are ready for the condo lifestyle, which includes shared walls and much more interaction with your neighbors. Remember that when you live in a condo, you have to be accommodating and flexible. Many of these first-timer questions can be found in the Community Association Institute's brochure for condo homebuyers.
Housing-market update: Condos on the rise Condominium prices in Boston's downtown market jumped to a record high in the second quarter of the year, driven by strong demand, tight inventories, and a taste for luxury.
The median price for a condo in Boston's central neighborhoods increased to $537,950 in the three-month period that ended in June, a 5.3 percent increase from same period a year ago, encompassing a 12-neighborhood area, including the Back Bay, Beacon Hill, South End, Midtown, Fenway and the Waterfront along with more neighborhoods and areas. This figure beats the previous record of $537,000 during the first quarter of 2013. The national median existing-home price was $214,200 in June, up 13.5% from June 2012.
Strong sales of luxury condos, which include services like a valet and concierge, helped push the citywide median value -- the midway point between the lowest and highest sale prices -- to the record. The median price of a luxury condo jumped to $1.4 million from $1.24 million in the second quarter of 2012, a more than 13 percent increase. Sales of luxury condos increased by 2.4 percent between April and June.
Home values throughout the Boston area are on the rise. Median sales price for condos in Greater Boston - considered roughly the region within the I495 loop - rose to a record of $422,000 in June, reflecting a 5.5% increase from the same month last year. Single-family homes also rose to a record $541,500 in June, a 7.8 percent increase from the same time last year.
Within the city of Boston, areas like South Boston and Charlestown -- neighborhoods with relatively lower costs -- have experienced some of the biggest jumps in condo values over the last several months as buyers are unable to find or afford properties in other downtown neighborhoods. More than 3,000 units will be available in the next 2-3 years, as the city catches up with the demand for compact yet comfortable condominium units.
Questions? Comments? Do you have a question about buying? Email us at firstname.lastname@example.org to have them answered! Better yet, call us at (617)505-1781 and schedule a FREE no-commitment consultation to find out how you can best get the most out of your hard-earned money.