This Spring&Summer, a lot of first-time home buyers will be "coming off the fence" and making the decision to purchase.
No doubt, it is largely due to the great incentives now available to them:
- $8,000 tax credit to first-timers (no home ownership for 3 years) if purchased BY December 1, 2009
- Historically low interest rates
- Industry low home prices and negotiability
- Many, many homes on inventory to choose from
- Lenders offering incentives to qualified purchasers
A large portion of these first-timers will be young couples, looking to find their first home together.
There are different styles of homes to choose from, but more generally, the "Detached Single Family" vs the "Townhouse/Condo."
This topic was discussed in a very recent email with a friend considering a first purchase.
So I thought I'd share some of my thoughts here:
Let's dispell a myth first.
When we hear the term condo", most of us think of a one level apartment unit.
However condominium actually refers to a type of ownership in which, generally put, you own what's between the four walls, as your unit is an individual part of a larger structure/complex.
Is that to be taken as a limitation ?
Depends how you look at it. Some people have the good ol American dream of owning a house with the nice little yard and white picket fence. Others have a modern on the go lifestyle and prefer not having to physically handle the maintenance associated with a detached home.
Let's discuss the townhouse/one level condo. Often sensibly laid out interior living spaces, with constant upkeep & modification, they tend to stay in style for the most part. For a monthly fee, the association is generally responsible for the exterior siding, roofing, yard maintenance, walk ways, common areas, most of the landscaping, etc.
All that while having a place to kick back, invite the group over for a hang out, and in many cases grill some food out back. This tends to fit the criteria and style of the young working class, a couple starting off together, singles, and many other types needing simplicity, style, and function.
Also, with townhouses offering other amenities such as a basement, garage, or other storage spaces, the possibilities are expanded.
What about the detached home? We can all picture a nice starter ranch or small 2-level with 2-3 bedrooms, a quaint yard, painted shutters, shed in the back for the tools and lawnmower. Cute as a button. In most situations, a little more privacy and SPACE.
Skip the association fees, dedicate some time and funds for external maintenance, gardening, call the contractor over to replace the big ticket items.
Now were starting to see the contrast and comparison. Style-wise, pros and cons of both are very apparent.
As far as the appreciation goes, if the market for detached homes skyrockets, there is great potential to see the equity build dramatically. Obviously a $300,000 bi-level wont blow up as much as a $800,000 5 bed, 3 car garage estate home on 3 acres.These things work at different rates.
However, the townhouse (which I believe there is always a market for) will also see good appreciation as the market cycles past stabilization, and on to greatness!
To describe the potential here, Ill work backwards. In a particular community in Freehold, a townhouse you may have purchased for $290,000 two years ago can be had for $240,000 right NOW.
Be the one to reap the benefits of taking advantage in the 2009 marketplace.
Home ownership is truly the key to long-term wealth, so GRASP the opportunity we have now.
There is potential to gain here as you settle into your home, enjoy for several years as normal, and live your lives as a career person and/or newly wed.
Email or Call me to discuss how we can make the best of this!