Condo Prices Reach 9-Year High

Home values are up nationally, and that extends to condos.

It's hardly a secret that home values have soared on a national level. We can blame low mortgage rates and a limited supply of available homes for that.

But it's not just single-family home prices that are climbing. Condo prices are up too, and in June, they reached a nine-year high, according to Redfin. Last month, the median sale price for condos rose 20.3% from where it was a year ago, and now that figure sits at $304,000.

What's also notable is that 42% of condos sold for more than their asking prices. And condos flew off the market at their fastest pace ever, taking just 22 days on average. By contrast, in June of 2020, condos took an average of 43 days to sell.

Should you buy a condo right now?

If you're not familiar with what a condo is, it's a unit that you own within a larger building. When you buy a condo, you're responsible for maintaining your unit, but you're not responsible for maintaining common areas and other structures of the building outside of your unit, like its roof or elevators.

When you buy a condo, you'll generally be required to join a homeowners association (HOA) and pay monthly dues that cover common area maintenance. You'll need to account for those fees on top of your monthly mortgage payments.

Even though condo prices have risen, you might still spend a lot less on a condo vs. a standalone house. So if you're eager to buy a home but are on a budget, a condo could be a good solution.

Also, if you're not particularly handy and don't want to get stuck doing tons of maintenance on your property, then a condo could work out well for you. While you'll need to maintain the inside of your unit, you won't need to mow the lawn, remove snow, or do the exterior maintenance that comes with owning a standalone house.

On the other hand, a condo will probably give you a lot less space than a standalone house, and you generally won't get much or any outdoor space. Some condos do come with patios or balconies, but if you want a huge private yard for your dog, don't expect a condo to provide one.

And speaking of dogs, some condos aren't so friendly to them. It's common for the HOAs that establish condo rules to either prohibit dogs or to prohibit certain breeds (namely, those with a reputation for being more aggressive).

And it's not just dogs that can be banned if you buy a condo. Depending on the rules your HOA establishes, you may be barred from running a business from your home or renting it out on a short- or long-term basis. Before you buy a condo, make sure you're aware of all the rules and restrictions so you don't end up unhappy with your living arrangement.

Buying a condo could be a smart move, and it could help you get your foot in the door in today's real estate market. Just don't be surprised if you wind up paying more for that condo than you initially expected given how prices have climbed.