I've posted here before that I am not a big fan of co-ops, and that's still true. HOWEVER, I do want to share some data that surprised me, and after I have a chance to do a little more digging, I may reverse my position after all.
I have a client who is very interested in co-ops, so I wanted to try to get some facts to support the potential resale issues; broadly speaking, my impression of co-ops was that they were cheap to get into, but very tough to get out of when it's time to sell.
I was surprised to find that for the most recent six month period, MLS data showed that in zip code 20009..
Statistic: Condos / Co-ops
Units sold: 156 / 33
Days on Market: 60 / 53
Avg Sold Price: $366,574 / $304,321
Source: Metropolitan Regional Information System
Now, I already knew that the average price of co-ops was much less, and the number of units sold would be much lower, after all, there are many more condos than co-ops in Washington, DC. But, I was certainly surprised by the Days on Market total--turns out co-ops sell just as quickly, if not more quickly, than condos. My guess is that this is because of the low price point--an entry level buyer, and $52K is quite a difference for someone trying to get into their first place. Not to mention that co-ops, often in older buildings, are frequently much larger units than today's condos.
My point? Perhaps just that I may have been too hasty to condemn co-ops--though I am still adamant about the land lease co-ops. And there are still major pitfalls for a buyer to be aware of: Board Approval, possibly higher required downpayments, limited options for financing, the potential inability to rent the unit. But for the right purchaser, co-ops could be a great opportunity, and the topic deserves more study and I'll post again soon.
And now for my legal disclaimer: Information deemed reliable but not guaranteed. Do not rely on this information without verification.
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2 comments:
Your post on land lease co-ops was eye-opening. I haven't been able to find a list of which co-ops in the DC area are leasing their land, though (or, for that matter, a list co-ops in the area at all). Do you have any leads?
I'm not aware of any central list, but would be happy to talk to you about some of the buildings I know of if you'd like to connect. As far as I know, there was just one co-op in DC that was a land lease situation (as of about a year ago) but they were negotiating to purchase the land. Shoot me an email with your contact information if you'd like to discuss!
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