If you are a first-time home buyer or are otherwise limited by your budget, you may have affordable alternatives to a single family home in Marin County: condos and town houses. Before you reject the possibility, consider the important advantages.
The average price of a single family house in Marin over the last year was $1,628,000. This “average” house had three bedrooms and 2 3/4 baths in 2,291 square feet of living space. Let’s look at your choices, for example, in Corte Madera, where 78 single family homes (SFHs) and 29 condos/townhouses sold last year (May 18, 2017 to May 17, 2018).
SFHs Sold in Corte Madera over the Last Year
Most houses sold were under 2,200 square feet. Typically, price per square foot decreases with size.
|Number Sold||Average Sale Price||$/Square Foot|
|1,000 to 1,799||35||$1, 303,231||$914|
|1,800 to 2,199||15||$1,614,800||$808|
|2,200 to 3,636||26||$2,092,000||$770|
Condos/Townhouses Sold in Corte Madera over the Last Year
Most condos and town homes are under 2,000 square feet (see below). Five were under 1,000 sq. ft, and two were slightly over 2,000 sq. ft. (2005 sq. ft.).
|Living Area (sq. ft.)||Number Sold||Average Sale Price||$/Square Foot|
|1,000 to 1,799||21||$849,862||$626|
|1,800 to 2,199||3||$1,103,333||$564|
Why Consider a Town Home or Condo?
There are pluses and minuses in purchasing a condo or town home. You may find the pluses attractive.
You get more for your investment: town homes and condos in our example of Corte Madera were are about 30% less expensive. This means that you can save about $500,000 on the purchase price of a condo or town house compared to a single family home of the same size.
We checked prices in San Rafael, which had a significant number of condos and town houses sold (30) versus SFHs (106) in the last year. Condos and town houses were about 26-27% less expensive.
Condos and town homes usually come with a monthly maintenance fee, typically $400 to $500 per month, equal to $5,000 to $6,000 per year. If you factor this into your purchase cost, the maintenance fee is equivalent to about $100,000 of mortgage cost. This still gives you a $400,000 advantage in purchase price.
When you buy a town homes and condos, you have fewer maintenance responsibilities. SFHs require regular maintenance: painting, repairs, roofing, landscaping, pest control, and more. These expenses can average several thousand dollars a year. Typically, the $400-$500 monthly fee for a town home or condo pays for many of your large maintenance costs: exterior maintenance, landscaping, building insurance, and sometimes utilities.
Overall, your real costs for maintaining a SFH or town home/condo are similar. The only difference is the timing. In the extreme case, you can avoid the maintenance of a SFH for many years, but face this cost when you are ready to sell the home. With a condo or town house, you pay gradually. You pay now or later.
Note: If a monthly fee is significantly less than $400-$500, you will be receiving fewer benefits and services. You may have to take responsibility for painting the outside of your building, maintaining the roof, or buying building insurance. We can help you sort this out.
Management of a condo or town home complex is a major consideration in buying a home in the complex. A board of directors for the homeowners association (HOA), composed of about five elected homeowners and often a professional management company, has the responsibility of allocating funds, collected monthly from homeowners, for operating costs (for example, insurance) and maintenance.
Some HOAs are realistic and proactive in taking care of the homes, but some are not, leaving unfunded projects that can affect your finances in the future. Madeline Schaider Real Estate can review the HOA documents and advise you on your financial safety or potential financial risks.
Privacy in a condo or town home can be an issue depending on the design of the development. Again, Madeline Schaider Real Estate can do the research and advise you on possible issues.