Question:
“My husband and I are planning to buy our first home and we want to make the right decision. Can you tell us which appreciates faster, a house or a condominium?”
Answer:
The assumed conventional wisdom is that houses appreciate faster than condos. I don’t have any stats, but based on observation I have to disagree:
I think over the long run they both appreciate at the same rate.
I say this both from personal experience and because it wouldn’t make sense otherwise…
If House X is 400K now and Condo Y is 300K, that means people value living in House X 33% higher. All other things being equal, it would defy logic if in 10 years House X was 800K and Condo Y was only, say, 400K.
That would mean that House X was valued 100% more. Barring any demographic or home style preference changes, that just doesn’t make sense.
Of course, because House X costs more than Condo Y, if they both go up 10%, House X will go up more dollars because its appreciation base was 10% higher to start with.
Hope that all makes sense!
