By Stephanie Diana Gast- Wilson
First I will give some background, in the mortgage industry there are only about 150 Condo Compliance/ Condo Review Specialists in the entire country. So, we are a very small community. That being said So lately myself and others in my field if they are on social media such as linkedin, facebook, ext., then you have been getting calls from recruiters regardless of if you solicited them or not. This is because, so many small and up in coming mortgage companies are now being audited and a lot of the ones Fannie Mae is repurchasing is… you guessed it condos. So, head hunters are trying to poach employees if they can.
This being said an unsolicited recruiter called me up the other day. I figured it couldn’t hurt to hear what they have to say. Based on what she said I don’t want the position they have open but, she did ask an interesting question that I thought warranted a blog post. The question the recruiter asked me was, “What trends are you seeing in condos? Are you seeing more being done in the city or the suburbs?”.
This was an interesting question because; the company I currently work at is a national company where the one that was trying to head hunt me is only in a couple states. So, from where I am sitting I get to see the gambit of condo sales/ mortgages. Meaning I review files for condos in big cities and the burbs and based on the files I am getting my department there isn’t see more for either area just more condo loans in general.
In November 2014 Fannie Mae, (FNMA) did a major over haul of their condo guidelines. This has really helped to get more loans closed. Mostly because, some things FNMA wouldn’t allow before are allowed now, and other items that are not allowed have been given further definition. This is also helped by the multitude of first time home buyer programs and numerous low loans to value (LTV) loan products that many lenders are offering at this time. So, this got me thinking is there a current trend for City vs. the Suburbs?
The Chicago Tribune has an interesting article from 2007 showing that 26-34 year olds who traditionally often purchase homes in the suburbs are opting out of that. “’Younger buyers are increasingly attracted to an amenity-rich lifestyle — to the dynamism of an area with pubs, restaurants, shops and city parks. This demographic doesn’t identify with neighborhoods where soccer moms drive around in minivans,’ says real estate expert Mark Nash (Chicago Tribune)”. However, this was written prior to the economic crisis of 2008.
Much has changed since then. Bank Rate.com argues in their 2015 article of if a condo is right for you as a first time home buyer they bring up that it is a matter of price, life style, maintenance costs, being OK with rules, and cost of HOA fees are key factors when considering buying a condo. And because, of raising housing costs, and populations condos are not just a city thing anymore. Trulia shows in their 2014 article, “The Trulia Price Monitor and the leading sales-price indexes report price changes for the nation and for many large metro areas. However, metros include both cities and their suburbs, and urban and suburban areas often have very different housing markets. The construction boom in single-family homes during the housing bubble was centered in the suburbs, and the subsequent bust was particularly painful in many of those same suburban areas. Many have wondered whether the housing bust has sparked a new preference for urban living in dense, walkable neighborhoods over sprawling, car-dependent suburbs. To compare how urban and suburban neighborhoods have fared in the housing (Trulia)”.
The Washington Post comments on the growing popularity of condos popping up in the suburbs. “’This push is coming from several different groups of buyers — retirees who are downsizing are attracted to the increasing number of places offering elevators. They also like the convenience of not having to take care of a yard or a driveway,’ he said. ‘Young professionals and recently married couples are eager to invest their money in a condo rather than keep renting’ (Washington Post)”.
The Times argues contrarily that Cities are becoming the main place people are flocking to live. “Twelve years later, that dream has changed. Americans are abandoning their white-picket fences, two-car garages and neighborhood cookouts in favor of a penthouse view downtown and shorter walk to work. The latest housing data shows traditional, single-family suburban home construction is way down: after a walloping all-time high of 1.7 million single-family homes began construction in 2005, single-family housing starts have contracted after the housing bust to just over 600,000 in 2013. During the five years since the recession, single-family homebuilding has remained lower than it has been in decades (Time)”.
Based on the research it is arguable if condos are more popular in the city or in the burbs. However, what isn’t arguable is that condos are in both places and are here to stay. They are still in demand and progressively making a come back in this post 2008 financial climate. There are just more choices in condos and its based on the buyer’s preferences and if they prefer the suburbs or the city.
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