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. 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.