Condos are back in the game as they outpace single-family homes in appreciation.
A recent research study released by Zillow stated that condos are appreciating at 5.1 percent annually, outpacing the 3.7 percent rate of single-family homes in the United States.
During the past recession, condos were hit hard by the sudden burst in the housing market. A typical condo in the United States during that time lost 33.2 percent of its value, while the median U.S. single-family home lost 20 percent of its value.
"The housing bust hit condo values hard, and over the past few years, buying a condo wasn't always considered a good investment compared to a single family home," said Zillow's Chief Economist, Dr. Svenja Gudell. "But that's changing, and condos increasingly represent a strong-performing, often affordable choice, particularly for first-time buyers interested both in home-ownership and in keeping a lower-maintenance, city lifestyle. However, as younger buyers compete for homes in urban neighborhoods, it's important to consider some of the additional costs of condo life, especially home-owner association fees, when weighing options."
Market Watch reported that condos have finally caught up with other homes ever since the housing bounced back. The condos are now appreciating faster in nearly two-thirds of the top 35 most populated housing markets, as compared to single-family homes.
In the New York City metro area, in Dallas and Houston, and in Boston and Denver, condo values have outpaced single-family homes.
Denver condo values are growing in value at an annual rate of just under 20 percent as opposed to single-family home values that have risen to 15.9 percent.
Renters in Philadelphia who want to buy single-family homes dropped slightly in value year-over-year. However, condos are growing at 2.3 percent.
Areas such as Miami where condos make up 63 percent of the housing stock, however, are not experiencing a rise in condos values as fast as single-family homes.
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