Good time to buy a condo?

[mickey]

Somebody from my gym is going to buy a condo... I was wondering if its a good time

It seems like a bad time because lots of new condo units are coming online and it seems like this will depress the price, so the longer you wait the better, but on the other hand a lot of people want to move into the city, so maybe the new demand exceeds the new supply. I can make the argument both ways, what do you think?

[VacantLuxuries]

I would say it's a bad time to buy a condo since we're currently setting up the economic conditions for another recession/depression, but it's really more a question of whether they're buying because they want to live there, or buying because they just want to turn a profit off of their investment in property.

If it's the former, there's never a bad time because buying locks in your monthly payment. If it's the latter, we're at the top of the market so it's a terrible time.

[Anondson]

If you see yourself living in a condo for 10+ years and you won’t have to make yourself house-poor to buy a condo, don’t wait to time the market. Just get in.

But an important consideration for the right answer is how long you would be willing to wait to buy?

[sdho]

Seems like condo market has seen less much less inflation than single-family homes. Just looking around, it seems like most of the 2005-era condos still have not caught back up to their original purchase price (with some limited exceptions, like North Loop).

No matter what, I wouldn't expect to make a lot of money in equity on a condo; they don't appreciate as reliably. But as a place to live with stable, relatively low costs, it seems great. If you want to live there, do it.

And although it's not enough to make up for a hugely inflated price, interest rates are awesome now, and will only get less attractive for buyers. I bought a single-family house at the end of January for under 4%.

[Nick]

Prices on downtown condos have gone up, but definitely not to the extent that houses have in other parts of the city. I think the astronomical HOA fees do a lot to suppress values, which has pros and cons. I'm also looking/thinking about it and there's not really a ton of buildings, especially at the lower end of the market. Over the winter there were a decent amount of units for sale in the northern part of Loring Park that sat on the market for a bit and their asking prices dropped. There was a reasonably updated, 2 bed 2 bath 1100 square foot unit on the 23rd (top) floor of 1225 Lasalle that started at like $230,000 and sold for $170,000 a couple months ago, but the HOA was a whopping $900/month.

I'm not 100% sure if it's a good time to buy or not--my original plan was to keep socking money away and save up the 20% (I don't have a lot of overhead) but since interest rates are going up it might make sense to buy now and pay mortgage insurance for a few years. Agree with the above that if you know you're not moving anywhere for 10 years it almost certainly makes sense to buy. With downtown in particular I wouldn't be extremely worried about the broader economy because it's such a small submarket that people are always going to be interested in, and you've got to figure that it can only get better at this point with the mall done, etc.

[amiller92]

If you see yourself living in a condo for 10+ years and you won’t have to make yourself house-poor to buy a condo, don’t wait to time the market. Just get in.

But an important consideration for the right answer is how long you would be willing to wait to buy?

This but probably 5-7 years too.


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[MNdible]

I would note that there is a vast gulf in the pricing between new and older condos.

The pricing on new condos just doesn't make sense to me -- pretty outrageous for what you're getting.

Used condos, on the other hand, represent some potentially very good values. There are quite a few very well managed condo buildings downtown where you can pay your mortgage and your HOA and still be ahead of market rent ON DAY ONE, and you've effectively locked in your housing costs.* Tough to argue with that math.

*Important to verify that the HOA has been well managed and has a good maintenance reserve and doesn't have a backlog of deferred projects.