Image via Wikipedia
Traditionally, a condo is an affordable entry into homeownership for single young professionals. But, in Alexandria, a condo purchase appeals to many groups of buyers, not only the stereotype, because the cost of living is expensive and housing prices in Northern Virginia are at an all-time high. Condos also serve empty nesters, geo-bachelors, and singles well. The home could convert into an investment property, earning money for the owner as a part of their retirement plans or another home purchase.
Buying a Condo for a Primary Residence in Alexandria
Condos in Alexandria were always a hot commodity and, to a degree, still are, but the pandemic dramatically increased the number of available condos as owners longed for more space and were anxious to be rid of common areas traditionally found in condo buildings. The influx of condos for sale elevated inventory and is currently a bright spot within the challenging sellers market for home shoppers hoping to buy in Alexandria.
Image via Flickr user Ron Cogswell
The Northern Virginia Realtors Association released this information about the increase of condos in March 2021.
“A comparative flood of condo units entered the market last summer with active listings in July 2020 being 52% higher than July of 2019. By October, the number of active condos listings was three times higher than a year earlier.”
NVAR also reported that by January 2021, median sales prices decreased to $321,000 before rebounding slightly to $339,999 in February 2021. Although condos remain relatively affordable and available now, they are forecasted to recover slowly but steadily.
The arrival of new buyers is encouraged by the wide availability of the vaccine and the continuation of construction for companies like Amazon, whose second headquarters in Arlington/National Landing remains a sought-after employer.
For more insight about buying a condo in Alexandria, read The Alexandria Real Estate Outlook for 2021.
The fact remains: the simplicity of condo living draws buyers. The potential for a walkable commute to work or Metro services coupled with Alexandria’s lively restaurant and entertainment scene continues to attract buyers of all ages and lifestyles. Real estate professionals in the Alexandria area predict a slow but steady climb of condo purchases in the near future.
Learn more about Home Shopping in Alexandria VA: Styles and Prices.
Buying a Condo in Alexandria As an Investment
A condo purchase often serves as a semi-temporary living solution with the possibility of a rental conversion in the future. As lucrative as this investment may be, you’ll need a thorough investigation into what the terms and conditions are for any condo building or community.
Image via Wikipedia
Some condo associations and HOAs are more friendly to landlords than others. Prepare to work within the confines of the management group and the condo association’s rules and restrictions.
Barriers to watch for:
- For an initial purchase as a primary residence, some lenders like Fannie Mae and Freddie Mac must approve the condo association and its practices. They’ll investigate the business and finances (via a condo questionnaire). If a condo doesn't meet federal guidelines, it is considered non-warrantable.
- If you intend to buy a condo solely to become a rental property, note that some lenders require the condo to be a primary residence first and for a certain length of time. They might also demand a large down payment between 20% and 25%, since condos do not appreciate as quickly as single family homes because the condo owners do not own the land.
- Condo associations often restrict the number of condos in the building permitted to become rentals, known as “rental caps.”
- A condo purchase also requires fees beyond taxes, insurance, and repairs. It’s common to pay condo association fees. These fees can amount to an additional $500-$1500/month along with your mortgage, so it's important to consider that expense in your budget. As a rental property owner, you’ll also have to budget for vacancies (on average about one month per year) and potentially property management fees if you choose to hire a professional company.
Before your purchase, you’ll also want to dive into the statistics of surrounding neighborhoods to gauge the potential interest in your condo in the future. Is the walkability factor high? Condo dwellers are often looking to simplify and have easy access to grocery stores and restaurants.
Are there enough employers to lure the renters that can afford the rent you hope to charge? In Alexandria, the condo pool is large. Will yours stand out for any particular reason, such as a prime location next to a university or major corporation?
If done correctly, buying a condo in Alexandria can be a sound investment. Over the long term, Northern Virginia’s real estate market holds its value, and condo owners are usually in the enviable spot of making money from their investment.