Property value growth in Lakeview? (for sale, renters, condos)

[pete6032]

I see many studio/1BR condos in Lakeview selling for $100k - $120k. With 20% down and a good rate on a mortgage, the Mortgage + condo fees + taxes would be only a little higher than rent in some cases. If I bought one of these places what could I expect in terms of property value appreciation? Do condos in Lakeview generally gain value or stay at their current value because the neighborhood has been fully gentrified?

[NOLA101]

Small condos in Lakeview will stay cheap, because there are tons of such units, and they're basically short-term living situations for uncoupled 20- and 30-somethings.

Family sized units are more expensive on a per square foot basis and probably a better long-term value, as there are relatively few.

I'm sure any investment in Lakeview will be fine, but I also wouldn't expect above-market returns, as Lakeview is gentrified and not going to change much from the present.

[chet everett]

Not only the relative "fully gentrified state" but the pressure on condos to both have MINIMAL assessments and TRY to stay at least not horribly outdated really hurts price appreciation. The mix of "trend conscious" type tenants / shoppers mean that if the kitchen in your unit is not looking VERY up-to-date renters and buyers will balk. The rapid turn over that many of these units see (along with the wear of folks storing bicycles / skis / roller blades etc) mean that common areas take a beating. Given our rough climate (ice winters, lots of humidity, hot summers...) the mechanical systems really get a work out too...

I hate to sound like a "kids these days" type but the fact is LOTS of the people looking at these places are coming from colleges where the "dorms" have been MASSIVELY upgraded -- where once the colleges MIGHT have had some crummy pool table and a couple of giant wash machines now the "residential living centers" have more in common with a luxury hotel. That means prospective buyers / tenants want in-unit laundry and a dry cleaner off the lobby. They don't want a bathroom that looks like it was from a 1950s Howard Johnson Motor Lodge that could be sanitized with a power washer, they expect to have storage for all their "personal grooming" and mosaic tiled walk-in shower with glass doors. It won't do to use a camp style hibachi for kabobs, they want a walk around deck that can handle a Weber gas grill and all their guests...

[jdiddy]

Originally Posted by pete6032

I see many studio/1BR condos in Lakeview selling for $100k - $120k. With 20% down and a good rate on a mortgage, the Mortgage + condo fees + taxes would be only a little higher than rent in some cases. If I bought one of these places what could I expect in terms of property value appreciation? Do condos in Lakeview generally gain value or stay at their current value because the neighborhood has been fully gentrified?

I wouldn't expect much in terms of rapid appreciation, given how quickly prices have risen in the past three years, and whatever property tax increases on the way likely impacting prices.

That said, if your time horizon looks to be around 5 years, and the cost of ownership now is on par with renting, then buying isn't a bad idea.

Considering the principle payment goes back to you in home equity, the tax advantages of owning (mortgage interest / property tax deductions), and the fact you are basically locking in your monthly housing payment at a time of increasing rents (barring property tax/special assessments), buying has a lot in its favor.

On the other hand, there's less flexibility if job/life changes require a move, you're exposed to the risk of large specials and more directly by coming property tax increases, but you can paint the walls.

Not sure how valid chet's points are. Sure, the kids these days may be used to more luxury than the dorm lifestyle back in the day. On the other hand, they're broke and in major debt, so they can't afford all their wants anyways.

[Arne Bjornson]

The value of that type of property will not grow. Just look at the price history for those places.
If it's selling for $120K, it has probably lost value since the late 90s. In 10 years it will just be another 10 years older. Plus as already mentioned, there are hundreds of them on the market. A dozen units for sale in the same building, etc.