Sunday, March 23, 2008

Thinking about Buying a Condo in Tacoma?

I wrote a post in 2006 talking about Tacoma Condos. I said it then and I will say it now, don' buy a condo in Tacoma as an investement. There are over 300 two and three bed condos on the market right now in Tacoma. The average listing price is hovering at $305k. There were just over 160 condos in this category sold in Tacoma in the past twelve months. That is close to a two year supply, and guess what developers are still building them. Prium has gotten smart and are turning both Chelsea and Hanna Heights into apartments. Not sure how much the rents will be but they will have a hard time breaking even. Prium had not sold one single unit in Hanna Heights despite upgrading the countertops and other amenities. The Jay Heights project has been put on an indefinate hold and there is plenty of developable land on the market.

You also need be to aware of the high risk of construction defect litigation, home owner dues, and poorly managed home owner associations. All of these factors, an individual condo owner does not have much control over, and it usually amounts to higher HOA dues, which creates a huge monthly cost penalty for owning a condo.

The mediam sales price for homes in North Tacoma are $289,000 and have decreased over 7% for the year. If you are looking to buy, don't buy a condo in Tacoma, they aren't good investments. If you love the lifestyle, I would recommend renting one of these recent downtown Tacoma condo projects turned apartments and wait for things to settle out. Zero lot line Townhomes are always an option, at least you won't have to deal with HOAs and HODs.

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