The DOGE Downturn - Kensington

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Anonymous wrote:I'm worried. There's a new-ish condo near me (in DC) that is listed for $15k less than the owners paid in 2018. Here's the sales history:
2018 - Sold for 730
2022 - Sold for 789
2025 - Listed at 730, dropped to 715 and sitting.

Condos are a horrible investment even in the best of times and really not indicative of the SFH market. The condo I sold in 2004 in upper NW resold for almost the same price in 2020. Almost zero appreciation, but huge increase in the monthly HOA.

The advantage is
Having a home you can't get kicked out of
Having nothing to take care of
Part of your payment going to principle

The appreciation is less than single family but they have annual taxes that go up way more.

Hoa fees increase but less than maintenance, repairs, utilities, insurance of a single family home.

+1 a condo that doesn't appreciate can easily be better financially than a money pit SFH. Really depends on the individual situation. Also, you can't always rent an equivalent. My friend has a condo she overpaid for and is worth less than what she paid 5 years ago, but it is so much nicer than what she was renting before. She loves living there. She's had the experience of renting in a building that converted to condos. Owning her condo means she can't get kicked out.

This is big. Our condo hasn't appreciated that much -- maybe 8% or so in 10 years. Condo fees have increased modestly. But we now have hundreds of thousands of dollars in equity, our mortgage costs about what rent would have been in our neighborhood 20 years ago, and hour condo is really nice and updated.

We would have loved to buy a SFH but our options for our budget were really slim pickings and we would have had to buy a major fixer upper and lived in it for years before we could afford to upgrade it. We also didn't want to spend every weekend working on our house. So we bought a brand new condo instead, the total lack of effort required in maintaining it (no yard, it's small so it's not that expensive to hire people to do whatever work is needed) freed me up to start a side gig that has netted me an extra 20k the last few years, which has gone straight into a house fund (getting a decent rate of return via CDs and a high yield savings account).

Now we can buy what we want, where we want. Even if our condo sells for exactly what we paid for it a decade ago.

Condos can absolutely be a good investment. It just depends on your specific situation.

There is an article in the WSJ today about condos.

The issue is you need to buy in a building/area that doesn’t significantly raise condo fees and won’t experience significant capital assessments. Thats easier said than done.

The specific case study was a guy buying in Michigan…but even then the article said that 57% of all condos are now selling below their purchase price.

You are confusing owning your home with owning an investment property. I would probably not buy a condo as an investment. And buying a condo in general is risky, for us it worked better to rent before we bought our townhouse which we love and is our forever home. But I know many people who climbed the property ladder starting with a condo, and it worked well for them and their needs. When the alternative is a tiny, money pit SFH and the condo is in a newer building, it can work. Especially if you re short on time to deal with repairs.

Except almost nothing works all that well when you sell for less than you paid for it.

I don’t understand the logic. If you sell for more than you bought your SFH plus any repairs, that’s likely better than selling a condo for less than you paid and all the maintenance fees and the special assessments you paid as well.

I agree a townhouse is probably the best option as I would not imagine you are subject to the special assessments that plague condos…though I guess if you are in a complex with a pool and other amenities then you may need to pay for upgrades to those amenities.

Do you not understand that a money pit SFH can be devastating financially? And for many people, the labor required is not worth it. They can still build equity with a condo while living in it.

Anything that is a money pit is devastating financially…many condos are money pits.

People are making recommendations on the type of condo you should buy…same goes for a SFH. Don’t buy a money pit.

You make it sound like 90% of SFHs are money pits and 90% of condos won’t substantially raise your condo fees or charge crazy special assessments.

No, you are saying it is never worth it to buy a condo, and I am saying it really depends on the individual situation.

You must be responding to someone else...I never said it's never worth it, but rather it's risky to purchase an asset where 57% decline in value. Here are excerpts from the article:

There are a lot of reasons not to buy a condominium these days. Gordon Miller did it anyway.

He looked past the homeowners-association dues that are rising across the country, and the special assessments that more buildings are charging for major repairs. He acknowledged that a condo probably wouldn’t appreciate as quickly as a single-family house, and might eventually be tougher to sell.

What he found is that there are deals to be had for someone willing to stomach the risks. About 57% of U.S. condos that sold in April went for less than their original asking price, according to real-estate brokerage Redfin.

Condo association dues were up 7% in April nationwide this year versus last, and as much as 10% in parts of Florida, but just 3% in Michigan, according to Redfin.

After three days of negotiating, Miller agreed with Spencer and Golden on an all-cash deal of $550,000 from an initial listing price of $649,000.

“I won’t take a mortgage at today’s rates,” said Miller. The 30-year fixed-rate mortgage recently averaged 6.81%, Freddie Mac said Thursday.

Rates can be higher on condos than on single-family homes, and mortgages are harder to get, because lending requirements have become stricter. The mortgage giant Fannie Mae maintains a list of condos that it thinks don’t have adequate property insurance or need to make critical building repairs. Being on the list can make it harder for potential buyers to get a mortgage, The Wall Street Journal has reported.

I have no idea who you are but if you aren't identifying yourself as a DP when responding to posts directed at someone else, that's on you.

Thanks for sharing this obvious information. It sounds like you and I agree (but who knows about the next anonymous person who responds to this thread!)