In Federal Way, Condos lead all property types with a 12% increase in value compared to 2018.
As the housing market in the greater Seattle area has soared over the last several years, many potential homeowners and investors alike have been seeking affordable alternatives. Condos are a hybrid between a single family home and an apartment that a real estate investor can own outright. The question is, are condominiums a good investment?
This topic has been debated many times, with some insisting that single family detached homes are a wiser investment, and others swearing by condominiums. The truth of the matter is that the numbers vary by market just as with any other type of real estate investment.
What to Look for in a Condominium
As always, buyers should do their due diligence to ensure the condominium they are interested in is positioned for future equity growth. Here are a few things to look for:
- Is the condo in a location where rentals are in demand, such as near a college or university, retail district, transportation routes, medical facilities, etc?
- Is there potential for a new condo to be developed nearby, reducing scarcity or causing yours to be in need of improvements to compete?
- How high are the HOA fees, and how do they compare to other condos in the area?
- Are the HOA rules restrictive, or do they allow for improvements that could make your unit more desirable?
- Does the average rent rate + monthly expenses vs the mortgage you will need to pay provide positive cash flow?
If you aren’t sure how to get answers to these questions, working with an experienced real estate agent is highly recommended and can save you from making an unwise decision.
What about Federal Way Condominiums?
So how have condos faired in the Federal Way real estate market over the years? The answer is that they’ve done just as well as or better than any other type of real estate investment in the region.
The chart below shows the average sales price trend for the entire Northwest MLS region, for Federal Way properties, and for Federal Way condominiums specifically. As you can see Federal Way real estate has followed the regional value trend line pretty closely, and condos have as well. Condominiums have not done significantly worse nor better than other property types in Federal Way. However, in recent years with home prices soaring, condos have become a great alternative for investors and families looking for a lower entry price point.
While condominiums took slightly longer to recover from the bottom of the market in 2012-2013, more recently their average price trend has outpaced all other property types, giving current owners looking to sell an excellent return on their investment. Condos in Federal Way are currently showing a 12% increase over the past 12 months vs 5.3% for all property types.
Is now a good time to buy a condo in Federal Way?
With the median single-family detached home price in Federal Way at $385,000 and Condominiums at $196,000, condos continue to be an excellent entry point for investors or owners looking to stop renting and start investing in their future. Condo owners in Federal Way can expect to see excellent returns on their investment over the next 10 years as we see the effects of the Federal Way Transit Center expanding to include Light Rail by 2024. What’s more, interest rates are still very low so buying now could prove to be a wise choice as prices and interest rates continue to rise over the long term.
If you’re interested in seeing whether buying a condo in Federal Way might be a good investment for you, contact the Mohr Team today. We will show you all of the available options, help you consider the pros and cons, and make sure the numbers look right to help you meet your goals.
Federal Way Condominiums for Sale
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