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In today’s market, Greater Boston buyers may have luck with condos
In a region where single-family home buyers are still seeing stiff competition, some are changing gears.
Alexandra DeMilia and her husband spent five years searching for a single-family home. As renters in East Somerville, the advice of their parents echoed in their heads: Find a house with a yard and significantly more square footage than their apartment. After submitting offers on houses in places like Dedham and West Roxbury, they were at a loss.
“Anytime we put in an offer, we’d have to go significantly over asking price, waive every contingency in the book, and we would still lose,” DeMilia said. “It still never felt good. I was never excited about it, and I always had a pit in my stomach.”
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She said none of the places they’d bid on felt like home, so they paused their search for a while. At one point, the couple considered buying land to build a new house, but that didn’t feel right, either. Then, a condominium a quarter mile from their apartment hit the market. A condo wasn’t what they’d been dreaming of, but they decided to check it out.
“That same day we were like, ‘Yeah, this is perfect,’” DeMilia said. “It’s not that much larger than where we live, but it had central air, in-unit laundry, and two full bathrooms. I felt like the value for the price was there.”
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The couple put in an offer at asking price — $730,000 — nailed down a 6 percent interest rate, and had their offer accepted with no competition.
“This property felt like the least number of concessions,” she said. “It felt the most comfortable. It was in a neighborhood that we know and love. And I had to remember it doesn’t need to be forever.”
For home buyers set on purchasing a single-family home in a suburb of Boston, competition is to be expected. But tapping into the condo market could offer a path to homeownership with far less stress and heartbreak thanks to increased inventory. According to a report from the Massachusetts Association of Realtors (MAR), the number of single-family homes for sale in September was down 4.2 percent from the previous year, whereas the number of condos on the market increased 5.1 percent.
Then, in October, the number of new single-family listings fell 1.2 percent from the year prior, while new condo listings increased 4.2 percent. Yet in the same month, closed condo sales dropped by 1.1 percent.
“There’s more inventory sitting and not moving,” explained Frank Carroll, a vice president at Compass on Newbury Street who specializes in condominium sales. “So it’s becoming a little bit more of a buyer’s market than a seller’s market, but it depends on the market we’re talking about.”
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A condo in a suburb like Lexington, he reasoned, would have more intense activity compared to one in Dorchester or Beacon Hill. During the holiday season, the market tends to slow down, he added, which could work in a city condo buyer’s favor.
“I’m seeing some deals where [a condo] was originally listed for $1 million, and people are getting it for $900,000. That’s a really good discount,” Caroll said.
Condos have long been considered starter homes for buyers, and right now, buyers appear to have the upper hand.
“Condos have a lot of opportunity to get in at a lower price point. I have a client right now who’s buying a condo for $525,000 in Dorchester,” said Jessica Celia, a loan officer and the Norwell branch manager for LoanDepot. “If he was to turn around and buy a single-family, he’d be well over a million dollars.”
Aside from a lower purchase price, Celia pointed to condos’ more moderate expenses. “When buying a condo, you can really control your output monthly,” she said. “You don’t have to worry about unexpected expenses like you would on a single-family, like a [new] roof or having to replace siding, because most of those big expenses are covered within your HOA dues.”
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What should buyers be considering when it comes to condo units? If it’s not a “forever home,” resale value. “My biggest advice for a first-time buyer right now is to be picky and to find well-rounded offerings. [They’re] the ones that do the best despite market conditions,” said Dana Bull, a real estate adviser with Compass in Marblehead.
For example, if a condo buyer has the budget to buy a two-bedroom, two-bathroom — even if they don’t need both bedrooms — it’s worth it for the flexibility for resale value, she said. The same goes for outdoor space and parking spots.
“Say your budget in Medford is $650,000. If you’re debating between two: one has higher-end finishes but the other one has a parking space. I would go with the one with the parking space because that amenity is always going to come with significant value,” Bull said, reasoning you can update cosmetics later.
While DeMilia didn’t originally envision moving into a condo, she said she’s glad she didn’t wait it out for a single-family. She and her husband now have a year-and-a-half-old daughter.
“Nothing is easier than being able to be in my bedroom and poke my head out to see my daughter, or being able to run across the hall and know she’s within a two-foot radius from me,” she said. “Whereas if I wanted to go upstairs in a single-family home and get ready, I have to bring my daughter with me, and then she gets restless and annoyed being [without] all her toys on the first level.”
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She’s happy she bought a home that fits her current needs, rather than one for a potential future lifestyle.
“All of a sudden, you’re in your 30s, and you’re like, ‘What am I waiting for?’ This is life now,” she said. “[It feels like] you’re always waiting for the next thing. The second you stop waiting, and you just start doing based on the life that you’re currently living, you’re going to be happier.”
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