Q: Is a condo a risky investment?
A: Based on appreciation, condominiums in the Los Angeles area have actually been a better investment than single-family homes.
Through the fourth quarter of 1993, the median price paid for a single-family house in Los Angeles fell 3.7% from $181,000 to $176,000, according to La Jolla-based Dataquick Information Systems.
During the same period, condo prices crept up 1.8% from a median price of $141,000 to $144,000. In some markets, condos even appreciated more. Dataquick statistics show that the median price paid for a condo in Los Angeles County appreciated 3.8%.
However, “condos never had the run-up in values in the late 1980s like single-family homes did but they never really lost value either,” said Dataquick analyst John Karevoll.
Real estate writer William H. Pivar, author of “Real Estate Investing From A to Z” (1993, Probus Publishing Co., Chicago, Ill.), writes that while buyers typically prefer a single-family home, a condo is often a compromise dictated by cost.
The condominium community has worked hard in the last few years to overcome image problems that were brought on by disputes and lawsuits among condo owners and the developers. Now associations are becoming more sophisticated about property management and are taking steps to prevent legal problems.
Other Resources: Community Assns. Institute, 1630 Duke St., Alexandria, Va. 22314; (703) 548-8600. “The Condominium Bluebook,” Branden E. Bickel, B&B; Publications, San Francisco, 1993.