Home buying experts of ATOT: Which would be preferable?

[AndrewR]

It seems we're approaching one of two options from what I've seen. Option A is a new, or almost new, townhouse with modern features (bathroom layout, etc.), modern amenities (appliances), and plenty of space but little to no yard, at least one neighbor attached, and the lack of privacy that goes with both. Option B is a single family home that will likely not have updated features or only a few (probably not an updated kitchen), likely smaller bedrooms but will have land, more privacy, and can be upgraded as time and money permits.

Pros and cons from your experiences with either option? Our purchase is at least six months away and possibly longer depending on the local housing market prices.

 

[Don Vito Corleone]

This really requires consultation with someone with expertise in your local market. Broadly speaking, detached single-family homes seem to better weather market adjustments than attached units (at least in larger urban areas), and that would probably be my preference anyway from a quality of life perspective, but you may not share my priorities.

 

[AndrewR]

Originally posted by: Don Vito Corleone
This really requires consultation with someone with expertise in your local market. Broadly speaking, detached single-family homes seem to better weather market adjustments than attached units (at least in larger urban areas), and that would probably be my preference anyway from a quality of life perspective, but you may not share my priorities.

That was my inkling (the value aspect), but I haven't seen any facts to back that up. I don't think this is going to be our "forever home", but we need to buy now before an influx of government workers (BRAC is bring 5,000-10,000 jobs here at the Army post) begins arriving in earnest next year.

If the presumed demand makes home prices rise as I think they will, we'll look to sell at a higher price to afford a nicer place with the increased equity. I'm keeping it affordable in the meantime.

Just fishing for perspectives.

 

[alkemyst]

Depends on where you live, but there are EXTREME deals to pick up on new properties.

The main thing working against the home industry right now is pre-owned homes listing at too high a price. Many of them are just people hoping to win the lottery...regardless it's causing a lot of confusion to those new to the market or that do not understand it.

Secondly is the foreclosures...no one really knows how many will hit the market. These work against both new and pre-owned home values. With the government offering/promising aid, but usually only on places entering foreclosure many asshats are deciding it's in their best interest to stop paying their mortgages.

We sell homes across the nation at various price points...in places like Arizona and Texas you can pick up 3 car garaged, 2000 sqft+ homes for low to mid 100's. In some of our markets that same sized home is a bargain at 4 times the price.

Sales are really starting to pick up for us lately unfortunately many of the buyers have let their previous home go to foreclosure or have filed bankruptcy. Although outside of those two issues their credit was perfect, no one that buys mortgages wants to deal with them.

There is never a bad time to buy the home you can afford really. The thing with a purchase like that is sometimes like anything you find a better deal later. The big artificial prices are gone (hopefully forever)..any adjustments now really would only be an issue if you are looking at selling short term. If you plan on being in the home 5-7 years at least there should be no issues come resale. UNLESS the foreclosure market becomes overburdened with properties.

 

[AndrewR]

We talked to Ryland Homes today about a new townhome and were surprised with what we could afford given the incentives they are offering (without any negotiation, either). At this point, we are leaning toward the new townhome, despite my preference for a SFH, but I am going to play off K. Hovnanian at a nearby development against Ryland to see who really wants our business and to see what the best offer is.

I appreciate the words, alkemyst (and Don). We're both a little anxious about our first home purchase and potentially dropping $25K from our savings.

 

[PowerEngineer]

As far as a townhouse versus a single family home, that's as much of a lifestyle question as anything else.

I'm not sure I'd be buying right now. Housing is still dropping.

 

[BoomerD]

I personally hate apartment living, so the townhouse would be starting at a disadvantage in my comparison. Next thing you'll have to evaluate is the condition of BOTH. New townhomes may not be built with the same quality as the older home. (just slapped together) The older home may not be as well insulated, might have single pane glass, or an inefficient heater/air conditioning system, where the new townhouse SHOULD have relatively energy efficient appliances and insulation...

Lots of things to weigh in both areas.

 

[alkemyst]

Originally posted by: BoomerD
I personally hate apartment living, so the townhouse would be starting at a disadvantage in my comparison. Next thing you'll have to evaluate is the condition of BOTH. New townhomes may not be built with the same quality as the older home. (just slapped together) The older home may not be as well insulated, might have single pane glass, or an inefficient heater/air conditioning system, where the new townhouse SHOULD have relatively energy efficient appliances and insulation...

Lots of things to weigh in both areas.

Depends who is doing the construction and at what price point you are buying at.

Many of the older homes people are finding so much better were expensive homes in their day and why they have stood the test of time.

Many of the newer homes people are complaining about are really on the low cost side...even if they are $500k+ chances are that's in an area of much more expensive homes.

Today's townhouses and condos on the luxury end are built extremely well and very soundproof. Of course there usually is not that much of a savings over a detached home if you are truly comparing equal properties.

 

[BurnItDwn]

IMO, older/smaller single family home > "nice" townhouse.

I lived in a townhouse from 2004 to 2007. It was built in the 70s and it was in a terrible neighorhood.
I've since purchased a small detached ranch in a MUCH nicer area.
I can't really compare a "new" townhouse, since mine was not that new.

Issues that may or may not affect your decision
1.) Noise
Usually townhouses are much noiser than detached homes thanks to close proximity and shared walls. If you like to watch loud movies or listen to loud music, you may not be able to do so at the volume you prefer since otherwise you would disturb your neighbors.
2.) Evil Restrictive HOA
Usually with townhouses you have to pay monthly association dues and the HOA often has all sorts of rules and won't let you do what you want with your home.
3.) Yard
You want a big deck/patio with a hot tub and a bar. Chances are, the "yard" that comes with a townhouse won't let you do this.
4.) Yard work
with a townhouse, you usually only have to do yard work in a small little plot in the back of your townhouse, or in some cases, none at all. If you are too lazy to cut your grass, then a townhouse may be good for you.
5.) Parking
This can be a big deal. I once lived at a townhouse where you had 1 allocated parking space, and then you could get 1 more assigned space if you had 2 cars. There was hardly any visitor parking, and the parking lots were a clusterfvck. With your own house, chances are you'll have at least your own private driveway with room to park 3 or 4 cars, if not more...
6.) Cost
My townhouse was about 1100 sq feet. My detached house only has officially 900 sq feet (though about 600 sq feet of the basement is finished, with the rest being laundry/utility/storage room.)
Detached homes of the same sq footage in the same town that my townhouse was in costed 40% more and up.

 

[alkemyst]

a townhouse without parking/garage is really just a condo.

Almost all new property has HOA's...you have to have them with things like condos/townhouses so common items are cared for.

There is only one good reason for non-detached homes and that is less maintenance required by the homeowner.

 

[alkemyst]

Originally posted by: AndrewR
We talked to Ryland Homes today about a new townhome and were surprised with what we could afford given the incentives they are offering (without any negotiation, either). At this point, we are leaning toward the new townhome, despite my preference for a SFH, but I am going to play off K. Hovnanian at a nearby development against Ryland to see who really wants our business and to see what the best offer is.

I appreciate the words, alkemyst (and Don). We're both a little anxious about our first home purchase and potentially dropping $25K from our savings.

I am not sure about Ryland, but I know with K. Hovnanian they have internal financing. Since you are now dealing with one company and two profits (one from the home sale and the other on the loan) you have a lot more bargaining room.

All builders though are wanting to unload inventory as quickly as possible so there is a lot of room for a serious buyer to negotiate.

 

[AndrewR]

We've ruled out K.Hovnanian for the time being as the development we looked at it is being built VERY slowly. The only available unit right now faces the RR tracks and major road that borders the development and is actually under a contingent sale. The agent couldn't tell us when the next ones would be built -- I think the builder is being very cautious.

Ryland has internal financing as well, and we might see what lots are available in the Spring so we'd just need a 6 month lease at our current place. We like the townhouse and the amenities and can probably negotiate a few more into the unit, but we aren't thrilled with the unit's location within the development -- internal street without close access to the woods (we have a large dog to walk).

As for the comparison with a SFH, this townhome is essentially like the one we're renting now since it's also a Ryland (almost identical, just slightly different floorplan). For our price point, we can get granite countertops in the kitchen with an undercounter sink, a kitchen island and upgraded cabinets (maple), partial hardwood floor, finished first floor rec room with a rough-in powder room (we have the bathroom in this place and don't use it -- storage would be more useful to us), upgraded master bath with tile and garden tub/separate shower and double vanity, and upgraded fixtures throughout. It also has a two car garage. It will be a very nice place, and we simply cannot afford that kind of luxury in a SFH in this area. We've also found that SFH in the size we would like (1700-2000 sq ft) simply don't exist in great supply, and it seems that most of the places start around 2300 up to and over 3000, which is simply too large even if we could afford the cost.

For me, I would rather have a SFH, but unless prices come down about 15% more, that's probably not going to happen. With the jobs coming to this area, I think the sellers are simply waiting for the influx of new people and are not budging on these prices (SFH are essentially bottoming out at $300,000). Also, there are NO new build detached homes in the area, at least not anywhere near our price range.

I went back and looked at the Ryland community, and if they can work with us on the lot location, I have a feeling that's where we'll wind up. The wife wants a new kitchen and new bathrooms, and those add too much expense on a detached house for us to afford one. Since we're comfortable in essentially the same unit right now, it should be ok. I need to play hardball with the agent and see what she throws my way.

On the plus side, the Ryland agent is a serious MILF.

 

[thomsbrain]

I would rather live in an older single-family, no question. And I'd rather try to sell a single-family in 15 years than an old townhouse.

 

[Descartes]

You didn't say anything about location (or I'm blind). In many of the larger cities, a single-family home in the city is either cost prohibitive or they simply don't exist. If you're a person that likes to be in the middle of everything, then a townhome is the best bet.

I have nothing against townhomes, and much of what they're building around here are a lot more than what most people call a townhome. They're more of an old-world Georgetown, Amsterdam, London, etc. type homes with upgraded amenities than some thrown-together box. They often have a level of class that you can't get at the same price point for a single-family home. I could really go either way with it.

Honestly though, I'd have to see the location and the actual houses to see which one I'd prefer. I'd take a new townhome with character over a characterless house any day.

 

[Sinsear]

Buy em both and rent the town home to the government folks when they get there.

 

[alkemyst]

K.Hovnanian and Ryland should have several NJ developments.

Almost no builder is building anything right now and trying to avoid building to spec as long as they have inventory homes.

With a large dog though I'd make sure you are even a candidate for townhomes.

Also are your agents actually company employees of the builders or third party? You will get more bang for your buck dealing with the companies directly as they have a vested interest in moving a property...a third party agent just has a commission to make.

What part of NJ are you looking at, only southern NJ really has anything below 300k. Check Ryland and K. Hovnanian's websites for inventory homes in your area.

 

[seemingly random]

I assume townhome == townhouse. Two different living styles: 1) townhouse/apartment - shared walls with neighbors, outdoor maintenance taken care of by an association, association fees and restrictions, 2) house - you're responsible for everything, including possibly tacky neighbors.

No matter which you choose, I'd wait a little longer (couple of years) since we're not close to deflating the housing bubble.

 

[alkemyst]

Originally posted by: seemingly random
I assume townhome == townhouse. Two different living styles: 1) townhouse/apartment - shared walls with neighbors, outdoor maintenance taken care of by an association, association fees and restrictions, 2) house - you're responsible for everything, including possibly tacky neighbors.

No matter which you choose, I'd wait a little longer (couple of years) since we're not close to deflating the housing bubble.

Not all townhomes include lawn maintenance and some home include it.

With most communities under strict HOA rules, it's hard to have tacky neighbors for long.

I choose to buy an older home in an established neighborhood...I like to work on my cars and many HOA's prohibit it even inside your garage (I do my work behind my fence regardless).

A newer home would have been much nicer from the start, but I am choosing to put the work into this one to get it to where I want it to be. I still won't have a lot of the new home features like larger kitchens than 10 years ago even and more open floor plans.

My home has a detached backyard workshop (could be a 1 car garage), a back yard driveway and still enough room for a full sized pool and still having some backyard. The big disadvantage I see in newer homes is unless you are at nearly double the median home price in our country you have a zero lot line.

IMHO your house is worth nothing...it's the land that's really valuable.

 

[SampSon]

I could type up a bunch about the pros and cons of an attached townhouse vs. a detached SFR. I'll keep it short though.

The biggest difference is the extent of maintenence the HOA takes care of and the amount of tax discounts the developer works out for the owners.

Townhouse ownership is very similar to detached SFR ownership. With a townhouse you own the land your unit sits on (typically 1 foot beyond the footprint of the building) and all theoretical air/ground rights.
You also technically own the exterior of your unit. You have the right to do basically whatever you want to the interior of your unit (some HOA rules may apply, but rules on the interior are very minimal, if any).
The remaining green areas are common areas are owned in common with the other townhome owners and the HOA (or developer, which can be one in the same, though the types of common ownership can affect the legal consideration of the development and units). Most people confuse townhome ownership with condominium ownership and PUDs (planned unit developments).

With a townhome you basically are not responsible for the maintenance of the exterior of the home and green areas (lawn, walkways, driveways etc). With a SFR you are responsible for everything, the house, the land and all legal considerations that surround the land (encroachments, easements, zoning compliance, building code compliance etc).

In short, with a SFR you need to own a lawnmower, weed whacker, snowblower, power washer and maintain your property. With a townhome you are not responsible for the vast majority of that.
Many townhome/condo/pud developments also receive tax breaks from the municipality, meaning your property taxes may be significantly lower than a SFR.

Townhomes and condos are good options for first time homebuyers, and single person who are not ready to devote their time to completely maintain their property. You also get the benefit of property ownership, tax write-offs and equity building.

 

[slsmnaz]

Originally posted by: SampSon
In short, with a SFR you need to own a lawnmower, weed whacker, snowblower, power washer and maintain your property. With a townhome you are not responsible for the vast majority of that.

I would actually have listed that as a positive for getting a house

 

[seemingly random]

Originally posted by: alkemyst
Not all townhomes include lawn maintenance and some home include it.

There are a multitude of combinations - something any buyer needs to consider. I've had experience via a relative that didn't realize he had bought a house in a neighborhood (500k+ homes) with an oppressive association. As an example, it tried to have a woman put in jail for putting up an unapproved fence. To each their own ... prospective buyers need to be aware of this possibility as well as zoning restrictions for individual houses.

I kind of know what you mean about land. I live on 50 acres in the country. If it could be moved to a city, I could retire and cruise the world for life.

And yes, it's still very easy to find tacky neighbors.

 

[AndrewR]

Originally posted by: alkemyst
K.Hovnanian and Ryland should have several NJ developments.

Almost no builder is building anything right now and trying to avoid building to spec as long as they have inventory homes.

With a large dog though I'd make sure you are even a candidate for townhomes.

Also are your agents actually company employees of the builders or third party? You will get more bang for your buck dealing with the companies directly as they have a vested interest in moving a property...a third party agent just has a commission to make.

What part of NJ are you looking at, only southern NJ really has anything below 300k. Check Ryland and K. Hovnanian's websites for inventory homes in your area.

I must have been confusing above -- I live near Aberdeen Proving Ground, Maryland, and we're looking at developments in Aberdeen and Havre de Grace, MD (Ryland and K.H., respectively).

The agents are employees of the builders, at least in the Ryland case. I am fairly certain it's the same with the K.H. property as well.

I also have to state that a long commute is particularly UNappealing to me. I guess I've been spoiled by never commuting longer than about 15 minutes for the last 10+ years (in four different places now), but I don't want to go back to the 30 minute commute I used to have in Atlanta. We also have sensitivity in the fact that my daughter is Chinese, and the county to the north of us is known as a hotbed of racism (Cecil County, MD -- formerly [?] home to the eastern US leader of the KKK in Rising Sun). So, moving north to the "country" is off the table as we don't want to subject our little girl to anything like that especially with school looming in a couple years.

I am thinking that our long term plan is to get one of these townhomes, most likely the Ryland in a better lot location within the community (end unit, closer to woods), and purchase options that are desirable for a buyer (upgraded kitchen and bath, larger bedrooms). We'll take good care of the property unlike the owners of our current rental townhouse and look to sell in about five years or so, taking the equity in the house and using that to "trade-up" to a single family home.

I am inclined to wait a little longer on the purchase of this townhome because of the state of the market. Case in point, the K.H. model we're considering (the Guilford, on their website) was originally starting at "low 300's" last year and is now going for $259,990. The model is 2500 sq ft, and our upgrades would likely put it around $270k by my estimate without any incentives from the builder, assuming they decide to open any more lots.

For what it's worth on the HOA at this new place, I would expect (but will confirm) that it will be similar to the one we are currently under since it is also a Ryland community that was actually sold by the very same agent we're dealing with now. Lawn maintenance and snow removal are taken care of, but there are essentially prohibitions on changing the outside exterior appearance of the townhomes. No fences, no playgrounds, allegedly no MX on cars (which is ignored by several people), but I have little problem with all of that. People have made landscaping changes, especially on the end units, though they have to obviously maintain them. We have no issues with the HOA where we live now, which makes us more comfortable moving to somewhere similar.