Condominium or single-family home, which choice is smarter in Seattle?


One of the most frequently asked questions about residential real estate is: should I buy a condominium or a house?

As with many real estate questions, no one answer works perfectly in all situations. There are many reasons why a condominium will work better for some, while a single family home will work better for others. If you want to make things more confusing, there may also be an overlap where the two options are the best. Here you might want to think in terms of cost and square footage first. As Seattle area home prices rise before our eyes, the key is to enter the market to capitalize on that growth.

The main things to consider are lifestyle and cost. If you find yourself walking down the lawn equipment aisle of the big hardware store, dreaming of the day you can tie a leaf blower to your back while following your new front wheel drive lawn mower, life in. condominium will not be fulfilling. Likewise, if you hate the idea of ​​gardening work, a single-family home may not be the best solution. Although very simplified, one should never underestimate the value of the way of life.

A condominium near downtown offers a lifestyle that the suburbs can’t match. Being able to walk from your office downtown, meet a friend for a pre-dinner drink, come home for a quick change, and then go out to dinner and catch a show is compelling to many. Conversely, if you have a small family and want to let your little ones roam free and safely in a fenced yard, you can’t achieve that in a high-rise building. The challenge comes when you want a little of both, and then the budget can become the deciding factor. While this is not always the case, a condominium typically has a lower purchase price than a single-family home in the same general area.

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For this example, I looked at the single family homes and condominiums currently available for sale to compose these composites. Both are in the same general area in Seattle. In these cases, the selling prices are $ 500,000 for the condominium and $ 700,000 for the house.

Size is one of the most significant differences between these two houses. The condominium is just over half the size at 800 square feet compared to the home at 1,350 square feet. Both have one bathroom, while the home has three bedrooms and the condo has two. Parking is the same for both, with off-street parking, but neither has a garage. These properties are within walking distance of local cafes, restaurants and parks, making them ideal for active people.

Looking at the numbers gives a glimpse of the cost differences. The purchase price is the most obvious. The price difference is substantial, especially when considering a down payment. For a conventional loan with 20% down payment, the difference is $ 100,000 for the condo and $ 140,000 for the house.

How do these purchase prices affect the mortgage and monthly costs? To make this comparison, I used a 30 year conventional loan at 3% interest rate for both and the 20% down payment shown. The monthly payments are around $ 1,700 for the condominium versus $ 2,400 for the house.

After the mortgage, there are two other financial considerations. For any property, it is essential to research monthly association or maintenance fees. In our examples, there is no monthly charge for the house, while the condominium has a maintenance charge of $ 300 per month.

The second area of ​​financial consideration is property tax. For this condominium, the annual property taxes are approximately $ 4,650, and the house is $ 6,510 or $ 387.50 and $ 542.50, respectively. In total, the condominium has a monthly cost of $ 2,387.50, while the single-family home has a monthly cost of $ 2,942.50.

Please understand that this is only a highly simplified composite example. The key to any home purchase, whether it’s a condominium or a single family home, is to investigate all of the information that affects costs. Coming back to the lifestyle differences, these are personal. The key is to find something that you feel happy to live in for several years and that stays within your budget.

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