Where You’ll Pay Less for a House Than a Condo

Yesterday, The Juice began our two-part series on the changing housing landscape by looking at the nationwide renting-vs.-owning premium. Basically, as of the end of 2022, it costs a lot more each month to own a home than it does to rent an apartment. 

Today, we look at another area of the housing market with interesting data: condos vs. houses. 

The path to ownership for lots of people – particularly young people – used to be buying a condo first, then moving into a single-family home. This is because, traditionally, condos were less expensive than single-family homes. While this remains the case in some cities, it doesn’t in others. 

Recent analysis from Point2 comparing the cost difference between condos and single-family homes across the U.S. contains some subtle surprises, but also highlights potential opportunities in this crazy expensive housing market. 

Source: Point2

All in cities in the eastern half of the nation, you can, on average, score a single-family home for less than or the same price as a condo. 

For example, in Detroit, there’s a 75% discrepancy between the two. The median house costs $58,000, while the median condo costs $229,000. 

Other cities with large differences are Akron (39%), Cleveland (36%), and Birmingham (29%). 

There’s no difference between the two types of dwellings in Rochester, NY.  

Of course, many of the low-priced homes in these and other cities (especially Detroit) require work. But among the houses at or around the medians, you can find good deals. You might just have to move into an older home. New condo construction is one factor behind those dwellings’ relatively lofty prices. 

Point2 also crunched numbers on where houses cost more than condos and how many years of income it would take to close this gap. Some findings:

• In Providence, RI, where houses cost an average of only $3,000 more than condos, it would take less than one month’s median salary to close the gap. 
• At the opposite extreme, houses cost $744,000 more than condos in Honolulu, requiring a stunning 10 years’ worth of the median income to close the gap. 
• Among the cities where it takes more than five years’ worth of the median income to offset the price differences: Bellevue, WA; Hialeah, FL; Arlington, VA; Glendale, AZ; and Irvine, CA. 

The Bottom Line: As with most housing news these days, lots of it is bad in Point2’s analysis. But The Juice found something good: Good deals on single-family homes and condos exist across much of the country. 

If you’re in the market for a place to buy, compare condos against single-family homes in your target areas. You might find affordable opportunities in one or both housing types.

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