There are certainly more than a few purchasers who begin their new home search considering both condos and houses. If you are, or could be, one of these people you should be aware of the differences in the market between the two. These days the differences between purchasing a condo and a house are more magnified.
Right off the bat, the lifestyle of condo living versus house living is quite different. Location wise, and actual lifestyle wise, each type of dwelling (house or condo) has its advantages and disadvantages. Demographically speaking for our city’s young professionals condos/lofts/ towns are most popular. Quite often they are the only affordable type of home for a young person/family starting out. Of course the condo also comes with other perks like less responsibilities as an owner, relatively speaking, and chances are the convenience and attractions of the area will outweigh the same for a house — i.e. downtown Toronto versus say North Markham.
On the other hand buying a house in the suburbs, while more expensive for many, gives you more space, better appreciation value, and that general cosy feeling of suburbia that comes with a white picket fence.
Indeed the differences between a condo and a house are many, but for buyer Teri, who has done her research and is an intelligent buyer, what I’ve discussed so far seems common sense. I’d have to agree with Teri, in that these differences aren’t the most important to keep in mind.
Here is the biggest difference to keep in mind. Consider that this June was the best June on record, ever. That’s right folks — June ’09, really a part of the worst economical recession in recent memory, clocked in better than last year and even of ’07.
What does this mean for buyer Teri? It means that Teri needs a different mentality depending on whether she’s shopping for a condo or a house, to successfully purchase the home she really wants.
In other words, if Teri is looking to buy a nice suite in a nice building in nice downtown Toronto, she needs to understand that there are dozens of other buyers who will love the same unit she does. Teri needs to recognize that sellers are purposely pricing their units a little bit below market value, holding offers until a certain date, generating as much interest as possible and then routinely getting multiple offers on their properties.
So when Teri is comparing the solds on the houses she’s reviewing alongside the condos, she can better understand how and why the two markets are very different, and give herself the best possible chance at success with whichever market she ends up going with.
In a multiple offer situation, make no mistake, the seller is in total charge. Does this mean that Teri is doomed to pay more than market value? Absolutely not. It does however mean that Teri is part of a resurging trend that is seeing prices of the popular downtown condo buildings rise again near their all-time highs, so what she pays will likely be the highest new sold comparable, or near there. Next week we’ll discuss why this is the case.
Happy hunting!
– Amit is a Realtor/Developer with Re/Max. amitp@rogers.com
