• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Condo Townhouse & Non-Condo Comps

Rick Phillips

Thread Starter
Member
Joined
Jul 2, 2004
Professional Status
Certified Residential Appraiser
State
District of Columbia
I'm working on a report for listing that will be coming to the market soon. It's a 2008 townhouse (style) and condominium in ownership. The condo development is just a couple rows of about 20 units total. The subject is 1,600 sf plus a basement with a built-in one-car garage.

There are a dozen recent sales of very similar properties in walking distance; however, all of them are fee simple (non-condo). There are zero condo sales within a 2-mile radius (well outside of the market area) looking back over the past three years.

I did a paired-sales analysis for the last condo in the subject's development that sold. It sold for $237,000 (less $7,110 in seller help) in July of 2013. Another unit sold a couple months earlier for $239,000. Six non-condo townhouses, also with about 1,600 sf, basement, and 1-car garage, built between 2005 and 2010, in similar condition, sold between $228,000 and $240,000.

Does it seem like the market is as responsive to condos as it is townhouses in this case? Would you use townhouses as comps?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
I'm working on a report for listing that will be coming to the market soon. It's a 2008 townhouse (style) and condominium in ownership. The condo development is just a couple rows of about 20 units total. The subject is 1,600 sf plus a basement with a built-in one-car garage.

There are a dozen recent sales of very similar properties in walking distance; however, all of them are fee simple (non-condo). There are zero condo sales within a 2-mile radius (well outside of the market area) looking back over the past three years.

I did a paired-sales analysis for the last condo in the subject's development that sold. It sold for $237,000 (less $7,110 in seller help) in July of 2013. Another unit sold a couple months earlier for $239,000. Six non-condo townhouses, also with about 1,600 sf, basement, and 1-car garage, built between 2005 and 2010, in similar condition, sold between $228,000 and $240,000.

Does it seem like the market is as responsive to condos as it is townhouses in this case? Would you use townhouses as comps?
I likely would, esp if the maintenance charges /HOa fees , community regulations and amenities are similar between the two . Explain why - shortage of sales and listings of the condo townhomes.

Your having to use townhouses as comps mirrors the market, since buyers for that type of property faces the same limited choices if they want to stay in that market area. Usually the fact that a townhouse owns the postage size lot it sits on is not that meaninfgul. In some cases condos sell for less due to more restrictions but in your case the two seem equivalent.
 

Mark K

Elite Member
Joined
Jan 27, 2004
Professional Status
Certified Residential Appraiser
State
Indiana
Does it seem like the market is as responsive to condos as it is townhouses in this case? Would you use townhouses as comps?
Yes I would. It looks like the market has spoken and it doesn't care either way. In my market, a lot of owners don't know the difference and don't care; it seems yours is similar.
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
How
I'm working on a report for listing that will be coming to the market soon. It's a 2008 townhouse (style) and condominium in ownership. The condo development is just a couple rows of about 20 units total. The subject is 1,600 sf plus a basement with a built-in one-car garage.

There are a dozen recent sales of very similar properties in walking distance; however, all of them are fee simple (non-condo). There are zero condo sales within a 2-mile radius (well outside of the market area) looking back over the past three years.

I did a paired-sales analysis for the last condo in the subject's development that sold. It sold for $237,000 (less $7,110 in seller help) in July of 2013. Another unit sold a couple months earlier for $239,000. Six non-condo townhouses, also with about 1,600 sf, basement, and 1-car garage, built between 2005 and 2010, in similar condition, sold between $228,000 and $240,000.

Does it seem like the market is as responsive to condos as it is townhouses in this case? Would you use townhouses as comps?
About HOA Fees ? Large differences in my area are causing high HOA developments to sell at lower prices.
 

Tom4value

Senior Member
Joined
Dec 4, 2016
Professional Status
Certified Residential Appraiser
State
Massachusetts
Personally, I wouldn’t. The value of the land is a major influence in market value. People buy condos for a reason and buy single family homes for a reason. Since there are different buyer motivations, you are comparing apples to oranges..IMHO.
 

Russ Kitzberger

Member
Gold Supporting Member
Joined
Jul 3, 2007
Professional Status
Certified General Appraiser
State
Ohio
Seems you might want to do a fundamental analysis to support your sales analysis.

Right now in many markets average down payment is over 20%. Lending products are widely available to these qualified applications. Inventory is low, HOA fees are relative to rising construction costs, so if your fundamental analysis indicates that market participants are considering all these equally, then you may find it supports your sales analysis.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I'm working on a report for listing that will be coming to the market soon. It's a 2008 townhouse (style) and condominium in ownership. The condo development is just a couple rows of about 20 units total. The subject is 1,600 sf plus a basement with a built-in one-car garage.

There are a dozen recent sales of very similar properties in walking distance; however, all of them are fee simple (non-condo). There are zero condo sales within a 2-mile radius (well outside of the market area) looking back over the past three years.

I did a paired-sales analysis for the last condo in the subject's development that sold. It sold for $237,000 (less $7,110 in seller help) in July of 2013. Another unit sold a couple months earlier for $239,000. Six non-condo townhouses, also with about 1,600 sf, basement, and 1-car garage, built between 2005 and 2010, in similar condition, sold between $228,000 and $240,000.

Does it seem like the market is as responsive to condos as it is townhouses in this case? Would you use townhouses as comps?
Both are townhouses though one has condo-ownership form and the other not. If the market considers dwellings within these 2 townhouse projects as market substitutes one for the other, why wouldn't an appraiser recognize this relationship :) ? Look to the market for your answers.
 

Sadie

Member
Joined
Mar 20, 2008
Professional Status
Certified Residential Appraiser
State
Oregon
Can you go to a competing area to with condo townhomes and non condo townhomes to determine if there is an adjustment warranted? If there is, the use that differential as a basis. If there isn't a difference, cite that analysis in your explanation. And if there aren't any that can be used to figure it out, maybe a huge macro kind of analysis. Is there a difference and if so roughly how much? Is that difference because of dues or land owner ship. This is why they pay you the big bucks.
 

Rick Phillips

Thread Starter
Member
Joined
Jul 2, 2004
Professional Status
Certified Residential Appraiser
State
District of Columbia
These are some good ideas. And there is probably a competing market area not so far away. Russ, you bring up a good point in that the lenders treat condos and SFRs very differently and that the qualification for a loan on a condo is more stringent, which means less overall buyers will be able to purchase one.
 

Sadie

Member
Joined
Mar 20, 2008
Professional Status
Certified Residential Appraiser
State
Oregon
The borrower qualifications aren't that different in a condo vs non condo. Its the property that is different. The condo project also has to meet certain criteria. That would all be reflected in the sales price. Don't over think that part of it. You aren't underwriting the loan, you are evaluating the collateral.
 
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks