They may not get as much attention as freestanding houses, but the supply of condominiums and co-ops has outpaced the supply of single-family homes for the past year, according to the National Association of Realtors.
With so many condo and co-op units on the market, it makes sense for any homebuyers to give them a look. But what’s the difference between them, and which is right for you?
A condo is closer to a single-family home, but in a shared space. You own your condo and pay a homeowners-association-like fee to cover costs of common areas like lawn care, snow removal and elevator maintenance.
Condo buildings often have boards, but they’re typically less intense than co-op boards, which are notorious for drawn-out approval processes when an owner is looking to sell. Co-op rules and boards can also make it more difficult to rent out a unit than a condo.
Co-ops can be more intense because owners are buying a share of the corporation that owns the building, rather than a specific home. Owners also pay fees into a common pool, but they are usually higher than condo fees, also covering costs like taxes and, in some cases, utilities.
While co-ops typically charge higher monthly fees than condos, they usually are cheaper to purchase. However, they can require a higher-percentage down-payment.
Depending on where a homebuyer is looking, the difference may not even matter. Co-ops are most common in the Northeast, according to the U.S. Census Bureau. In many markets, condos will be the only choice.