Chicago Grads Must Choose: A House or Condo?
With more and more college graduates flocking to Chicago, the rental and buyer market has never been more robust. Young professionals entering the ranks of the working class now face the dilemma of buying a condo, versus a house. Today’s college graduates come into the “real world” with ambition and their Suze Orman starter-kits, and they’re looking to establish strong equity, but which is best route?
Chicago condos obviously have the advantage of providing a convenient location in an urban setting. They provide easy access to the city’s greatest amenities while also shortening commutes. Not to mention, there’s the cool factor. Let’s be honest, telling your frat brothers or sorority sisters that you’ve just closed on a condo in the city is infinitely cooler than telling them you bought a single-family home in the suburbs.
Here are a few things to consider while weighing out your options. Chicago homes appreciate at a steadier pace than condos. While the appreciation is admittedly slow on both sides, homes are appreciating faster than condos in this market.
Also consider that, because of their inconsistent performance in the market, it has become increasingly more difficult to secure a loan for a condo. The process is made even more complicated if one requires a mortgage backed by the Federal Housing Administration. Financing a condo is tricky because the FHA will require that 50% of the units in the building be owned or under contract. Moreover, if the FHA finds that 15% of the units in the building are over 30 days truant with payments, this could negatively affect you being approved.
The other side of that argument is to find an FHA approved condo building in order to bypass the red tape.
There are always going to be pros and cons to any decision that one makes in life. At the end of the day, if you’re in a financial situation where you can make an investment and purchase a condo and that’s what you want to do, then so be it. Make sure to do your due diligence and research all of Chicago’s neighborhoods in order to find something that fits your needs. Remember to factor in proximity to public transit and commute time into your decision. With a little digging, you can find the right Chicago condo that fits all your needs.