We bought our condo a little over a year ago for $398,000. When we made the purchase the market was down and our realtor told us she wouldn’t be surprised if the price went up dramatically in the next 6 months. Because we live in a city directly across the river from Manhattan (sometimes called the 6th borough of New York City), housing prices are pretty expensive. Not Manhattan prices, but still expensive. You definitely pay for the convenience and proximity to the city.
$398k during a down market in our city gets you a small 2 bedroom 1 bathroom (about 800sq ft) condo. We don’t have a deeded garage parking spot (our building is 100 years old and doesn’t have a garage) and we don’t have any outdoor space (unless you count going up on the roof-no deck, literally the roof). We do have new appliances, hardwood floors, granite counter tops and exposed brick with a non-working fireplace. It’s a beautiful little condo and we’re so thankful to have it.
Saturday, I was leaving the building when I heard an unfamiliar voice. “Don’t worry Bill it’s only one flight up.” I figured it was the renter’s friends and thought nothing of this. When I got to the lobby I noticed a well-dressed (too well dressed for a Saturday afternoon) woman, a 30-something man and his 50-something father. Well-dressed woman is telling Bill, “The unit is a 2-bed 1-bath listed at $469k.”
So why do we care that our neighbor selling his condo? cha ching, cha ching!
Well for obviously reasons, if they’re valuing their condo at $469k and our condo is much nicer (from what we’ve seen from the photos posted on their realtor’s internet listing-they don’t have any of the kitchen or bathroom “upgrades” that we have) we can expect that the value of our condo is much more than it was a year ago. Even if the unit below ours is sells for $450k or even $440k, our condo’s value has still increased rather significantly.
So when are we selling?
We’re not. Not for now at least. But it is reassuring to know that prices (at least for now) are going up again. Of course we all know that they could drop tomorrow, but we feel pretty confident that buying in such a popular and populous area will yield us a gain over the long-term. Even if we couldn’t sell the condo for a profit in the next few years, we could rent it easily for at least the cost of our mortgage and in an uncertain economy where people are losing money left and right that gives us some level of financial security and peace of mind.