Author: TheArcadian
July 14, 2008
Condos and townhomes are attractive to home buyers because they offer more living square footage per dollar and generally require less exterior maintenance. This is perfect for those who have no desire to maintain a 3,000sf yard or worry about landscaping. Of course, the responsibility of maintenance in condos is paid through HOA fees; so it’s not exactly free.
Unfortunately, there are drawbacks to living in attached or densely built detached units; the lack of privacy. Poorly designed units will have windows facing each other or lack proper sound insulation. I, for one, would not want to hear my neighbor’s garage open and close every time they arrive or leave.
So you give up privacy, lot size and must pay monthly HOA fees. Doesn’t it make sense that condos should be valued lower than single family homes?
42 GENOA St #A
Arcadia, CA 91006
Price: $748,000 ($404 per sq. ft.)
- Beds: 3
- Baths: 2.5
- Sq. Ft.: 1,851
- Property Type: Attached, Townhouse
- Year Built: 2008
- Association fees: $95
This is your typical Arcadia townhome. Buyers love them because they are newer and, at one time, much cheaper than comparable single family homes. Builders love them because dense properties are cash cows. Overall, units cost less to build so return on investment is high.
Take a look, incredibly packed and I’m almost certain your bedroom windows are overlooking the townhomes next door:
This developer is late to the game and I’m sure they are hoping a knife catcher bails them out. Just 3 blocks East are two similar-sized units that recently sold for much less than the asking price of $748,000 ($404/sf).
Sold on 6/26/2008 for $620,000 ($304/sf)
- Beds: 3
- Baths: 4
- Sqft: 2,040
Sold on 4/29/2008 for $642,000 ($338/sf)
- Beds: 4
- Baths: 3
- Sqft: 1,896
- Year Built: 1990
Using these two properties as our comparable valuations, we get:
Currently listing for $748,000 ($404 per sq. ft.)
$304/sf = $562,704
$338/sf = $625,638
Although I’m sure these two properties aren’t 100% comparable to 42 Genoa, I would not hesistate to say it is around $75,000 to $100,000 overpriced. Of course, I can already see an uninformed buyer swooping in and buying this townhome for $700k+.
Any knife catcher who goes out any buy this town home near the asking deserves to have his head handed to him in a bag. While $600k looks comparable today, it is still way too high from affordability stand point.
$450k in 2010-2011.
At $600k, estimated monthly mortgage will be roughly $3,000 per month. Actually, it will be close to $4,100/month after taxes, insurance and HOA fees. (Before any tax/interest savings)
For a payment like that, a single person would have to be making at least $65,000. I suppose a family of two working professionals or someone making $100k+ could afford this property.
The problem I see is that this is an attached townhome… So even after accounting for a 20% downpayment, it isn’t exactly affordable (as you said).
At $4,100 a month, a person should be making 3 times that gross per month in order to comfortably afford the payments. So the person should be making $12,300 a month gross. This translates to an annual salary of $147,600. If you take 70% of that amount for taxes and 401K, the net annual salary is $103,320. This translates to about $8,610 a month of take home pay.
So imagine this person having to fork over a little less than half his take home pay for this townhouse leaving him about $4,500 for other expenses. $4,500 seems a lot but it is only $54,000 a year of disposable income. Vacations, some savings, food, gas, clothes, etc., would eat into that disposable income very quickly.
The worse thing that Arcadia ever did was to approve so much condo/townhouse/PUD construction. A collective eyesore and really takes away the character of a neighborhood.
Many neighborhoods in Arcadia had the opportunity to reflect the same charm and character of communities like Peacock Village or The Highlands.
Unfortunately, the onslaught of PUDs a stucco-box McMansions have ruined any possibility of that. Despite how much money buyers have, they got suckered in paying for cookie cutter plans that local architects like to use over and over again.
Now why Arcadia would allow this to happen baffles me.
Easy, higher property valuations per each lot = more tax revenue.
No thanks to prop-13. I agree with the idea not to push people out of there home, but now some of the tax base is so low it can’t provide for good schools, police, etc. But we pay for that with high crime, barbwire fences, and graffiti.
99% of Condos, Townhouses, and PUD construction all SUCK.
That is the best word to describe that style of living. Noisy neighbors, fees, approvals to make changes, rude “attached” neighbors, junks cars, parking issues, it’s glorified apartment life.
The only time I approve of that type of living is when it’s the only alternative. For example NYC, Downtown San Francisco, etc.
I rent a brand new condo near Arcadia and it’s awful. I am so glad I didn’t buy this place.
I think a SINGLE FAMILY HOME is the best way to go.
“99% of Condos, Townhouses, and PUD construction all SUCK.
That is the best word to describe that style of living. Noisy neighbors, fees, approvals to make changes, rude “attached” neighbors, junks cars, parking issues, it’s glorified apartment life.”
Noisy Neighbors: There are noisy neighbors in single family homes too. Try back yards in the summer. Actually a condo HOA can help you combat neighbors issues if it cannot be resolved between the two parties. In a SFR, what is your back up plan if you can’t work it out? At least you’re renting and you can move. Whether you buy a SFR or Condo, you can still be stuck with noisy neighbors, junk cars, views of trashy backyards views of your neighbors’ bathroom, loud dogs, overdue garbage cans under your bedroom window….
Approvals to make changes: Guess what, the City of Arcadia has home owner associations that must approve the changes to your home – this is not including what the building department must approve. We have friends that have neighbors constantly tattling to the City on other neighbors about the landscaping (ie. constantly growing tree that extends over a wall. WTH? What happened to people just talking and figuring out a plan or working it out.
Junk cars – Once again, I would make a complaint to your HOA or Landloard about this. Or, maybe talk to the neighbor – maybe they could use a little help.
I agree with your comment about glorified apartment life, parking problems etc. But being a townhouse dweller for many years, we have worked out many problems you mentioned by being proactive about it and actually talking to neighbors. Many times, people are clueless that they were being loud or offensive. For years, we asked visitors not to honk in the garage area – now it rarely happens. It just so happened in one situation, the owner was elderly and didn’t realize that it was so loud. If that doesn’t work, we make a complaint to the HOA – or when necessary, the police.
Our living situation is very tight for us as we have small children. Trust me, I can’t wait to get into a SFR. But for now, it really is nice not to maintain the lawn, tend the garden, trim the trees. The complex swimming pool is a nice play date opportunity for my kids in the summer. As a parent, we appreciate breaks being the primary source of entertainment and interaction.
Anyway, if you can find a way to facilitate some solutions, maybe it can improve your living situation.
p.s. disclosure – No we are not the ones selling a condo!
Those are great points. Since I rent I can deal with the current condo issues as I know it’s not forever. But you are right I would also hate to buy a home with bad neighbors. I think before I buy I will park the car in the street one weekend night with the windows down and listen and on a Friday and Saturday. If I hear barking dogs, parties, etc…I will know that’s not the home for me.
I am still young, but I think I want to live in a quiet retirement community.
I was young when I moved here and I felt like the old lady yelling out my window for neighbors to take their party inside at 12 am on weekday summer night. I was a young working professional that moved here for the quietness.
Oh, I forgot to mention another point in my previous rant. REPAIRS: In a condo situation some of those nightmare repair issues like a major sewage backup or main line breakage is a shared headache in a condo/townhouse situation. We have had friends deal with it alone in their SFR. We had it happen to us but it was not just our problem, the HOA had to take care of it. Fortunately, we didn’t even have a special assessment or extra payment for it. I’m not certain if it was handled through insurance, adequate reserves, or partial City of Arcadia maintenance issue as the problem had span over three separate complexes or maybe some combination thereof.
I think scoping out your future home is a great idea – different times of the day if possible. Although in this economic climate, neighbors can change quickly…