Now is a Good Time to Invest in Condos in 22033

As many of you might know the new tax assessments came out this week and depending on your situation and location this is either good news or bad news. For me it is partially good news and partially bad news. The assessed value of my condo dropped once again, which I have to say confuses me. That is good news because it means my taxes go down. I can't move one way or another right now so I am really only going to feel the positive effects of this for a bit.

But this does bring out the glaring weakness of tax assessments. Mostly where are they getting their data? Is it from the MRIS or is it just a low paid worker throwing darts at a board. From my check of the MRIS and knowledge of market activity in the 22033 zip code I have to say it is the latter.


The important thing to understand about condos is the style and condition is going to have a vast effect in the variance of price even in the same location. The average price for a condo in the Elan condo community is going to vary greatly from the average price of the Penderbrook Square community even though the condos are less than a mile from each other.

Overall the market activity for condos is strong. There are 25 active listings and 15 under contract which gives us a market absorption rate of just over one and a half months. That makes it a sellers market for condos even though all signs point to it being a buyers market with low interest rates and low prices. It is even better news for investors because condos are where they can find a capitalization rated between 8-10%.

For example the smaller one bedroom unit in Penderbrook Square is on the market for $154,000.00 and can rent for $1200 a month or a capitalization rate of  9.35%. Condos right now are a good investment. That doesn't just go for people who want to rent them, but also those wishing to live in the condo they purchase. Prices are low, and as it is with most predictors of a down economy condos are lagging behind the rest of the market.

As a whole the 22033 market has seen an 8.26% median price increase from a year ago. When that is limited to just condos the median price has gone down when compared to a year ago. Now to be perfectly honest with that the sample size might be too small as according to the MRIS only three condos sold in the January's of 2011 and 2012.

Looking at the data for the last three months of solds gives us an average sales price of $234,068.00 and a median sales price of $229,900.00. That is showing that the price of condos might not have bottomed out yet, but with the prices of single family homes and townhomes on the rise the price of condos will start going up as people with area as their main concern start to have to consider condos in their search.

As far as a person looking to live in a condo they shouldn't be deterred by the low prices and how they appear to still be falling. The rest of the 22033 market is on the rise and a rising tide raises all ships, and with the ability to get a good rate now at a low interest rate then living in a condo for a year or two and then renting  after moving out.

Doing this gives a person a double benefit. With today's low interest rates a person can own for less than they can rent and when they do move out and rent it they will get more profit than an investor because they have locked that property in at the homeowners rate.

For an example a property listed at $267,500.00 can be had on a 30 year fixed conventional loan for $1,333.60 a month including taxes where a 2 bedroom apartment in this area rents for over $2,000.00 a month. Even if a person can't do a conventional loan the FHA loan's monthly payments are still well below that $2,000.00 mark, and a condo in that price range in the 22033 zip code could rent for around $1,700.00.

Whether you are buying for yourself or looking to invest in rental property the condos in the 22033 zip code are still a good investment even if the tax assessments say otherwise.

I learn something new in real estate everyday
so you don't have to
David Huzzard
www.SuperNoVaRealty.com