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.
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!