Why yes, I have a condo down by the beach. Don’t you?
Ah, if only, right? Well, if you’re looking for a new condo, good luck!
If you said you had a condo somewhere, it was usually for vacations. If you live in a condo full time, it loses some of its glamor. At least, ever since the Great Recession it has.
Now days, most people will do anything to avoid owning a condo. But Why? Are they not built as well? Are they any less cool to visit? Why would I not want a condo?
I can tell you this much, they’re built as well as they have ever been. With updates to building codes, they’re probably even built better than ever. So why is buying a condo less attractive now?
What is the difference between a Condo and a Town Home?
Before you shop for a condo, you better know the difference.
There is a difference between condos and other types of attached homes, like Town Homes. The first difference is obvious if you’re used to multi-story condos, where you may have a neighbor living above you. But those aren’t the only types of condos out there.
So how is a condo classified. Well a condo is a home with shared walls, but when you buy one, you only own from paint to paint. That basically means that you don’t own any actual land. You just own a dwelling space that happens to be sitting on that piece of land. Or for many people, you own that dwelling space that sits on top of your neighbor’s dwelling space.
Usually the homeowner’s association owns the actual property and the parts of the building that are beyond the paint, like the sticks and bricks that make up the structure.
So in a nutshell, you are living in an apartment that you don’t pay rent on. That is, assuming that you don’t have a mortgage or a timeshare. You will still be paying an HOA fee.
A PRD (private residential development) or PUD (private unit development) on the other hand, is a different type of attached house. Often you see these zero lot line developments in the form of Town Homes.
Town Homes are often a niche product, targeted to specific buyers. Most of the town homes you see are built for the starter home families. With land prices going up, at least in Utah, the average starting home of the pre-2000’s is nearly extinct. Most single family/stand-a-lone houses are now out of the budget for many new families.
So the Town Home builders come in, and build a very narrow house side by side. They opt for vertical space instead of horizontal space. This allows them to sandwich more homes with similar square footage in at lower costs. Since they’re usually targeting the lower priced end of the housing market, many of the standard features are plain and un-exciting.
Town Homes are the new starter homes.
But not all attached homes are starter homes. Take us at Leisure Villas for example. We spend a little more money to make what might otherwise be labeled as a Town Home, and we turn it into the single level, single family attached type dwelling. Remember what I said about niche homes? Well, we’re not going for the starter home crowd. We’re selling to people who want an enhanced lifestyle. So we’ve designed everything from the ground up, to meet the needs and wants of the empty nester, retired, or nearly retired couple.
Good luck finding a new condo.
So is a condo bad?
It’s just harder to find new ones.
Many condos are great for many people. In the past, we too have built many condos. But the condo market is changing.
Mostly, builders are not making condos like they used to. Regulatory requirements make condos too expensive for a builder to erect now days. From legal challenges to extra upfront and recurring fees, most condo builders in Utah and surrounding areas have been stepping back from constructing any new condo developments.
As new condos disappear from the real estate market, they are increasingly replaced by apartments. This may be one of the driving factors that is leading more families to rent instead of own.
Don’t forget financing.
When the whole economy tanked in 2007 and 2008, lenders got very skittish about lending for condos. For a few years there, it was nearly impossible to get a mortgage. At the same time, someone building a Town Home could get financing as easily as any other home.
Lending restrictions have lightened up some since then. But there are other considerations you may want to think about. Maybe not now, but for down the road a little ways.
Many people who buy a condo, continue to own the thing after they’ve moved out. Now, instead of being an “owner occupier,” they are a “landlord.” This is all good until the amount of renters starts to outnumber the amount of owner occupiers. When this happens, banks tighten up again.
While it may not affect you at the beginning, when you’re buying, if you can’t sell your home later because nobody can finance it, you may be forced to: Hold it a lot longer than you want; Or you may be forced to lower your selling price below what would normally be market value for a similar mortgage friendly home.
Town Homes and other non-condo attached homes don’t have the same financing problems. Thus they are more attractive for homebuyers now and in the future.
Attached living can be much better than you think.
As I mentioned earlier. Not all Town Homes are created equal. That’s because not all Town Homes are for the starter home crowd.
Since so many people in Utah want to live between Utah County and Weber County, and since the land there is quickly being developed, many builders are putting more homes in less space. This means that attached style homes and HOA controlled communities are becoming more and more prevalent.
But this isn’t a bad thing. If a builder is smart about how they develop their community, they can create an attached home community, with a lifestyle that suits you more than even your single family detached home that you’re used to.
Leisure Villas is one such builder. We have been building attached homes for nearly two decades now. We serve the 55+ community better than anyone else in the state. We may be a niche builder, but that means that we focus entirely on our small segment of the buying population.
We know what you’re looking for in a home and community, especially when you start thinking of retirement.
You’ve spent your whole life working to get to this point. Now your kids are all moved out. Maybe it’s time you move somewhere with people like you, who want to enjoy these stage of life.
Come visit us and see why we are different. We are Utah’s #1 builder for age restricted communities. You’ll be glad you stopped by.