Low Mortgage Rates for Smart Loan Shoppers
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Low Mortgage Rates for Smart Loan Shoppers |
California Mortgages and the Condo CrazeBy Jonathan HaeberCMR Columnist Everybody's buying a condo these days. As traditional homes are getting further and further away from being affordable for the average person, condominiums are an inexpensive alternative. Is it a smart move? We'll investigate. With a California Mortgage, Price MattersFirst we'll look at price. Compare the national average price for a condo with that of a single family home. You'll be surprised. The national condo average is $228,200, while the average (median) price of a single family home is $213,000. What gives? Well, the old rule of real estate rings true: location, location, location.Condominiums are more often located in expensive, metropolitan areas. For a better idea of the difference in cost, compare the average California mortgage of a condo in San Francisco with that of a single family home in San Francisco. There, the average condo price in 2005 was $600,000; a single family home, however, captured a whopping median of $848,000. Mortgage Interest May Pay for Itself in AppreciationA second important consideration is appreciation. It's true that single family homes often appreciate more than condos. But, if you're considering a California mortgage, you should note the following: Between 1994 and 2004, the median price of a condo changed 112% in Southern California. On the other hand, new single family home construction only appreciated by 107%. In Florida, where the condo market is hottest, homes only appreciated 73%, but condos appreciated 106%.That means the greater appreciation of a condo could make it a wise investment if the condo market is hot in your area--making up for some of the cost of mortgage interest. Ultimately, your decision on whether to buy a condo or a home will be a personal lifestyle choice. Remember, condominiums also carry the added burden of home owner's association fees, but homes carry more maintenance and insurance costs. The higher cost of homes will also mean higher mortgage interest payments. Sources "Condos vs. Homes," BankRate.com "Home Buying Guide," CNN Money About the Author Jonathan Haeber is a condominium home owner in the San Francisco Bay Area. © 2006 CMR. All rights reserved. |