Image of the front porches on a row of condominiums in historic downtown Durango, Colorado.  Behind the homes, the cliff of Smelter mountain can be seem.  The many repeating identical homes are typical row homes.

While a condo can be cheaper than buying a house, you must also factor in the HOA dues. (Getty Images)

If you’re contemplating buying a house, especially in an urban area, you may be asking yourself: Is buying a condo a better deal?

What Is a Condo?

A condominium, which is like a hybrid between an apartment and a house, is property that you can purchase and own outright. A condo offers some similar aspects of apartment living. For instance, many condos are adjacent to others, so owners often share a wall. And if you live in a high-rise building, your condo may be located above or below someone else's home.

If you talk to friends or family members who live in condominiums, you'll quickly find out that many people love the condo life, while some people wish they bought a house instead.

Toying with the idea of committing to a condo? Here are top benefits – and some drawbacks – to factor into the decision-making process.

[Read: A Checklist for First-Time Homebuyers]

Pro: You Won't Have a Yard to Mow

This is a big appeal of owning a condo. There will be no mowing because you'll pay dues to a condominium association, which will take care of most of your maintenance needs.

"I have not lifted a snow shovel or mowed a lawn in 12 years. It's been marvelous," says John Goodman, who owns the public relations firm John Goodman PR. He and his wife owned a house in Scarsdale, New York, before moving to the village of Tuckahoe, New York. As for their condo, he says, "It was one of the best life decisions we've ever made."

Con: Having the Outdoor Workload Managed Isn't Always Easy

Some condominiums are underfunded and don't have the money to pay for regular maintenance. It's important to ask a lot of questions and make sure the association is well-run before buying a condo, and find out how many condos the association manages. If a dozen members struggle with paying dues in any given month and your community has 500 condos, you aren't likely to feel the impact. However, if you live in a community of 10 condos and two people fall behind, there goes 20 percent of the association's budget.

Pro: It's Cheaper Than Buying a Comparable House

The cost of a condo versus a house depends on the size of the home, the property values of the neighborhood and the cost of living in the area. Typically, you'll spend less on a condo, industry experts say, and historically, single-family detached homes have appreciated faster than condominiums.

However, while houses have appreciated faster than condominiums for years, condos aren't doing poorly. According to data from real estate information company Zillow, the typical condo market value climbed nearly 42% between May 2010 and May 2020.

Con: The Price of the Condo Isn't All You'll Have to Account For

You don't just have to think about appreciation and mortgage payments. Remember to factor in association dues. You could shell out anywhere from $100 a month to more than $1,000, depending on the location and whether you're looking at a luxury or no-frills condominium community. Still, these dues are often going to amenities, such as 24-hour gated security or a first-class gym or pool.

[See: The 25 Best Places People Are Moving to in 2019]

Jonathan Little, a professional poker player who runs the website JonathanLittlePoker.com, says that he owns two condos that he rents out. "I initially assumed a condo must be a good idea for someone who did not want to take care of maintaining a house," Little says. "However, I quickly realized that the $250 a month that my condo board charged me for the pleasure of being under their management was drastically overpriced. Sure, they cut the grass and kept the outside of the condo looking nice, but they were not responsible for anything inside the condo."

And plenty can go wrong inside a home, such as plumbing issues or your air-conditioning and heating unit could go out, for instance.

You could also find yourself on the receiving end of an assessment. What's that, you say? Every month, a portion of your condo fees goes into the development's reserves. That's where the condo association gets the money to fund occasional projects, such as repainting the building's exterior. If an expense can't be delayed – let's say a pipe burst and there isn't enough in the reserve to cover repairs – condo owners could be asked to pay an assessment, which can range from a minor pittance to thousands of dollars. These unexpected financial hits aren't pleasant, but unplanned expenses occur frequently with houses as well.

Also keep in mind that condos can be harder to sell than houses. You can brag to homebuyers about your spacious bedrooms or all the amenities in your condo building, but if many of your neighbors are also selling at the same time, there may not be much to distinguish your condo from theirs.

Pro: There Is a Sense of Community

Plenty of people who own houses would say the same thing about their own neighborhood, but remember that condo owners tend to live much closer to each other than many suburban homeowners, who often have relatively big yards separating them.

Mark Scott, a New York City-based corporate communications executive for eVestment.com, a website aimed at the investment community, says that he became a more social person living in a condo.

"Like most Americans, once you drive into that garage, you don't come back out until the next day. Living in a condo you see your neighbors in the elevator or at the pool or in the lounge and lobby," Scott says. "You're also more likely to go back out because many condos are in areas where interesting bars, restaurants, parks and so on are within an easy walk. So I found myself much more active and met many more of my neighbors and did things with them more often than I ever did living in a house."

[Read: What to Expect From the Housing Market in 2020.]

Con: You Can't Pick Your Neighbors

Scott likes the social, community-driven aspect of living in a condo, but there are downsides, too.

"As much as I enjoy the interaction with neighbors I get in a condo, you're not going to get along with or like everyone, so the downside is that you're still going to run into those people," he says. "In my Atlanta condo, there was a woman with two dachshunds that were very badly behaved – barking at other dogs in the elevator. Whenever I was taking my dogs out, if she was in the elevator I would have to wait for the next one. So I really didn't like that."

Scott says that he has heard of friends who moved into buildings on the recommendations of others – and then had fights with those friends, making living in the same building uncomfortable. "That never happened to me, but it's certainly a possibility in communal living like that," he says.

The grass is rarely greener on the other side of the fence. But at least on one side of the fence, you'll never have to mow the lawn.


10 Ways Millennials Are Changing Homebuying

The generation that's taken over homebuying

Shot of an attractive young couple moving house

(Getty Images)

The Great Recession delayed many millennials from being able to buy a home, but the generation isn’t locked out of property ownership the way it was a few years ago. The National Association of Realtors defines the millennial generation as people born between 1980 and 1998, and according to the 2019 NAR Home Buyer and Seller Generational Trends report, they make up 37% of all homebuyers in the U.S., the largest share of any generation. Over the past five years as millennials have become a significant portion of U.S. homebuyers, they’ve also helped shape trends in location and home type preference, helped usher in technological advances and embraced new platforms that make a home purchase feel more user-friendly. Here are 10 ways millennials are changing the homebuying process.

Updated on Feb. 26, 2020: This story was published at an earlier date and has been updated with new information.

Text communication is key.

Text communication is key.

Young man texting from home in stylish apartment

(Getty Images)

The telephone was once the primary form of communication between real estate agents and their clients, but the younger generation that has grown up with internet and cellphones will likely prefer more text-based modes that make it easy to multitask. “A lot of my clients already work in tech, so their expectation is they’re going to work with an agent that can at least keep up with them in terms of communication,” says Dana Bull, a Realtor with Harborside Sotheby’s International Realty in Marblehead, Massachusetts, who specializes in working with homebuyers. She says millennial homebuyers prefer to text and email their agent more often than older generations, and it’s reasonable to expect they’ll be comfortable using real estate-related apps.

Research is a natural part of the process.

Research is a natural part of the process.

Cropped shot of an attractive young student working on her digital tablet at home

(Getty Images)

When it comes to researching neighborhoods, checking out listings online and doing a deep dive into the fine print of a pending deal, millennial homebuyers are known for doing their homework. Jill Levin, a Realtor with Coldwell Banker Legacy in Albuquerque, New Mexico, says she recently represented some buyers in a deal that went particularly smoothly because the buyers read every disclosure and document sent to them and asked questions beforehand – something she doesn’t see from older buyers who feel experienced enough that they don’t need to read into the details. “There’s way more information today now, and (homebuyers) really, really should be paying attention,” Levin says.

The hub for advice is online.

The hub for advice is online.

Unrecognizable woman uses a digital tablet to shop for a new home. She is reading information about a two story home in the suburbs.

(Getty Images)

While apps and online search tools are an integral part of the homebuying process for all consumers these days, millennials are the first generation to grow up using technology broadly in everyday life. The familiarity with smartphones, social media and the internet make communication, finding out information and contacting professionals easier. Millennials are also inclined to shop around for everything from real estate agents to mortgages to contractors. In HomeAdvisor’s State of Home Spending report released in June 2019, the majority of millennials, Generation X and baby boomers research home remodel project costs on the internet, but millennials do so by the largest margin (77%).

Homeownership is focused on building wealth.

Homeownership is focused on building wealth.

Young family stands outside of a new suburban home.

(Getty Images)

While purchasing a home involves plenty of hurdles for younger buyers, many of them are choosing to become homeowners because it helps them build wealth in the long term. “There is still interest in buying a house because I’ve got a job, I need a place to live, rent is expensive and I should put my money somewhere,” Bull says of the millennial homebuyer mindset. As they build equity in their home, they’re in a better place to purchase a larger house in the future or use the profit of a sale for other investments.

Kid-friendly housing makes a comeback.

Kid-friendly housing makes a comeback.

Children Helping Mother To Make School Lunches In Kitchen At Home

(Getty Images)

Homeownership isn’t the only thing that millennials are doing later in life for financial reasons. Millennials are also marrying and having children later than previous generations. But as millennials get older, more are getting to the point where they’re starting families. While a condo in the heart of downtown worked for many first-time millennial homeowners when they were single, home preferences change as soon as kids come into the picture, Bull says: “People are starting to step up into that next level of a single-family home and maybe out in the suburbs.”

Walkability is a must.

Walkability is a must.

Couple Walking Dog Along Suburban Street

(Getty Images)

Even with many millennials leaving urban centers, one feature they won’t compromise on is walkability. “They want more activities in the area, they want walkability, they want the convenience of shopping without having to use their cars a lot,” Levin says. Even in more suburban settings, many millennials are showing a preference for areas that offer residential and commercial spaces within walking distance. Bull says the areas catering to these homebuyer preferences have been dubbed “hipsturbia,” where suburban towns offer an active downtown or main street area with the live-work-play atmosphere many people don’t want to lose when they move out of a major city center.

Eyes are on garages and kitchens.

Eyes are on garages and kitchens.

Young bike commuter leaving garage.

(Getty Images)

Luxurious features and finishes in a house are ideal, but millennial homebuyers are making their must-have lists a bit more realistic. In a survey of 1,000 Americans who plan to purchase a home in 2020 by real estate information company Clever, millennials' preferred home features focused on details that make life more convenient, especially as they start families. When asked which features are a requirement for their new home, millennial respondents placed a garage, large kitchen and space to grow into as their top three priorities. Details like hardwood flooring, a fireplace, pool and dedicated office space were among the lesser-desired details.

High home prices don't deter eager buyers.

High home prices don't deter eager buyers.

Real estate agent with couple in luxury home. They are shaking hands. There is a water view, kitchen and living room in the background.

(Getty Images)

Affordability is still an issue for many millennials, especially among the younger members of the generation. But that doesn’t mean millennials are uninterested or afraid of purchasing a home – it’s just a matter of the right timing, the right location and the right home. Between consistently rising home prices and a lack of inventory as homeowners choose to remain in their homes longer, the housing market remains extremely competitive, Bull says, especially in the Boston area where she works. But the millennials who are financially ready to purchase are willing to rise to the challenge. “They’re used to being aggressive to get into the college they want, and then get the job they want,” Bull says, which primes them to make a strong offer if they see a home they like.

Low down payments solve savings issues.

Low down payments solve savings issues.

Happy couple at home paying bills with laptop

(Getty Images)

The Clever survey found 70% of millennial homebuyers plan to make a down payment of less than 20%. Low down payment programs have grown significantly in the past 10 years and are now a major part of home purchases – NAR’s 2019 Profile of Home Buyers and Sellers reports that the median down payment for a home in the U.S. is 12% of the purchase price. While low down payment programs help resolve the lack of savings, homebuyers putting less than 20% down should be sure to factor into their budget the added monthly cost of private mortgage insurance.

Parents play an important role.

Parents play an important role.

Shot of two men working on a project together at home

(Getty Images)

For younger millennials and even Generation Z, which is made up of people born in 1999 and later, coming up with the cash for a down payment is one of the biggest obstacles to becoming a homeowner, even at less than 20% of the purchase price. For millennial first-time homebuyers and the rare Gen Zer getting into the market, financial help from a loved one is often what makes a home purchase possible. “Parents are getting involved a lot – I still see a lot of situations where parents are gifting money or helping in some other way,” Bull says. “I don’t see that changing at all.”

Here are 10 ways millennials are changing homebuying:

Here are 10 ways millennials are changing homebuying:

San AntonioTexas suburban housing development neighborhood - aerial view with houses in rows in middle-class neighborhood

(Getty Images)

  • Text communication is key.
  • Research is a natural part of the process.
  • The hub for advice is online.
  • Homeownership is focused on building wealth.
  • Kid-friendly housing makes a comeback.
  • Walkability is a must.
  • Eyes are on garages and kitchens.
  • High home prices don't deter eager buyers.
  • Low down payments solve savings issues.
  • Parents play an important role.

Read More

Updated on June 26, 2020: This story was published at an earlier date and has been updated with new information.

Tags: real estate, housing, housing market, home prices, new home sales, existing home sales, pending home sales


Geoff Williams has been a contributor to U.S. News and World Report since 2013, writing about a variety of personal finance topics, from insurance and spending strategies to small business and tax-filing tips.

Williams got his start working in entertainment reporting in 1993, as an associate editor at "BOP," a teen entertainment magazine, and freelancing for publications, including Entertainment Weekly. He later moved to Ohio and worked for several years as a part-time features reporter at The Cincinnati Post and continued freelancing. His articles have been featured in outlets such as Life magazine, Ladies’ Home Journal, Cincinnati Magazine and Ohio Magazine.

For the past 15 years, Williams has specialized in personal finance and small business issues. His articles on personal finance and business have appeared in CNNMoney.com, The Washington Post, Entrepreneur Magazine, Forbes.com and American Express OPEN Forum. Williams is also the author of several books, including "Washed Away: How the Great Flood of 1913, America's Most Widespread Natural Disaster, Terrorized a Nation and Changed It Forever" and "C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America"

Born in Columbus, Ohio, Williams lives in Loveland, Ohio, with his two teenage daughters and is a graduate of Indiana University. To learn more about Geoff Williams, you can connect with him on LinkedIn or follow his Twitter page.

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