Are Pasadena Condo and Townhome Prices out of Sync with the Market?

Townhomes and condominiums offer many wonderful advantages to a single family house. That is of course you consider the amenities they offer an advantage. Visualization is a key factor when purchasing a home. How you perceive yourself in your new surroundings will determine what kind of lifestyle you want to live and will ultimately purchase.

For those looking to eliminate yard work and much of the maintenance involved in a single family home, condos / townhomes can be a great alternative. These units at least here in Pasadena, are usually much newer than a comparably priced home and less expensive. However, upon closer examination, is a condo/townhome really less expensive than its single family counterpart?

April Sales Results

If we go back and examine the Pasadena real estate sales for April we see that there were 31 sales of townhomes and condos. The average square footage was 1236 and the average cost per square foot was $426.89. The median price was $460,000.

For the same month there were 51 single family homes sold with an average of 1863 sq ft. and a cost per square foot of $441.34. The median price was $665,000.

In a simple comparison you can see that in terms of square footage, single family held a 627 sq ft. advantage or 50%, comparing the median price, single family was more expensive by $205,000 or 44%, but comparing cost per square foot single family was only $14.45 (3.3%) more expensive for a single family. Cost per square foot can sometimes be an invalid form of comparison, so it’s best when used with other forms of analysis.

Under All is the Land

The median lot size for Pasadena in April was 7970 sq ft. We have to make some assumptions here but if you can build a new house for $250/sq ft, the median cost of the structure only would be $465,750 or at $200/sq ft., the cost would be $372,600. I think it safe to say that a 7900 sq ft lot in Pasadena with streets and sewer lines could easily sell for $350,000 – $400,000. Factoring in the land cost it does appear that a single family home provides much more value than does a condominium or townhome. Typically the appreciation on condo/townhomes is slower than single family and on the flip side they will tend to lose value more rapidly than a single family in a slower market.

Other costs involved which add value to condo/townhomes and is harder to quantify are the common area amenities which can include a pool, clubhouse, weight room, etc. Developers may also pass on the costs of inclusionary housing to the new residents which maybe required in order to obtain city council approval for construction.

While condo’s and townhomes appear to offer a less expensive alternative to single family housing, a closer look may reveal that dollar for dollar, the real value is in single family units.

Real Estate’s Condo_undrum is a post from: Up2Date