SF Real Estate Blog Reader Asks – I Try to Answer

Occasionally I get a question from a reader of the blog that’s worthy of sharing with the world – I thought this one was worth sharing. Hope you think so too…
Q. Hi Luba,
As a potential first-time homebuyer, I enjoy reading your blog and getting to understand the SF market. I was wondering if you had any thoughts on buying a condo in a high rise vs. a more “typical” SF flat in a 2 or 3 unit building. From a resale perspective, do you think that one is more desirable than the other? Or are they about equal?
Thanks for your thoughts.
E.S.

A. Hi E.S.,
First – thanks for the kind words about the blog. I try to provide useful information (at least most of the time) and am glad to hear some people are enjoying it. 🙂
Now – to answer your question….
My answer won’t be as straightforward as I would like to provide, but here it goes.
My gut instinct is to say that condos in more traditional buildings tend to have a higher resale value – but, that’s because they’re in neighborhoods that are already somewhat established where there is little to know inventory. High rises on the other hand seem to be going up at a rate faster than the speed of light – or something like that. Most are going up in neighborhoods that aren’t really established communities as of today, but will likely be in the next 5-10 years as urban planners create more corridors that offer more amenities to residents. That being said – new developments are definitely popular. As the inventory is created, it gets bought up – with some developments getting bought up faster than others. If you plan on reselling quickly though, you’re taking a gamble. In Mission Bay, buildings like the Beacon saw a drop in value from the original purchase price within a year or two of people buying their units. But, 3 years later, prices are slowly creeping up again as the neighborhood begins feeling more, well, established for lack of a better word.
I guess to sort of summarize, over the long term, I think appreciation will somewhat balance out between traditional condos and high rise new developments. Essentially, it’s a rather close call. I think if your question is more related to which one you should look into buying, I think it’s going to depend on a lot of things, from timing of the purchase, to your future plans, to your lifestyle, to your style preferences – and above all else, which place you’ll be happiest in. A home is a huge investment, but it’s also a “home”, so you want to be sure that above all else, you’ll be happy living there!
Let me know if you have any other questions! I’m always happy to be of assistance!

Luba

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