Buying an apartment in the US

Whenever buying vs renting is discussed it sometimes seems to be an assumption that you buy a house or rent an apartment. Is this usually the case? How often do people buy apartments?

It seems to skew the rent vs buy discussion a bit, because a house is likely to cost a lot more in upkeep.

The term for an apartment you buy is a condo in the states.

They tend to be cheaper obviously, but also have home owners associations (which are the worst thing in the entire world IMO :slight_smile: ) they tend to charge a ton (a significant portion of the monthly mortgage rate in many cases, more than actually it would cost to upkeep a house you owned) and have a ton of dumb rules (including restricting whether you can rent out your condo in may cases, making the value of your condo significantly less).

Also, many people rent houses.

You could also buy a co-op apartment.

Although people generally call it a co-op vs. calling it an apartment.

Sounds like just another name for a specific type of condo.

Which is short for “condominium.”

A co-op in the US is different from a condo in many ways . In a condo, you own your unit. In a coop, you don’t - you buy shares in a cooperation and as a result of your ownership of a specific number of shares, you are entitled to live in a particular apartment. Condos are considered real property - coops are not. Coops really only exist in certain areas of the country - there are plenty in in the NYC area but unknown in other areas.

We have co ops in Norway. In practice it is about the same as actually owning an apartment. You buy/sell for market price and get a mortgage the same way.

It is also interesting how home owners accociations are viewed so negatively. Of course, we have negative stories here too, but mostly it is viewed as a positive. The way I see it, if people are going to be living so close together, you need some common rules, and you need to pay for some common maintenance.

So how common is buying a condo in the US? Is it more common to rent and apartment, then buy a house, or do people just as Well buy a condo/co op?

In my experience its a big city thing. Friends in SF, DC and Atlanta have brought condos, outside those areas most people buy “single family homes”.

Agreed – condos are mostly a thing in big cities (and in the urban areas, less so in suburbs). Other areas which often have condos are retirement communities, and resort/vacation communities, like areas of Florida (and in many of those cases, it’s a second/part-time home for the owners).

I had also heard that outside the English-speaking world home buying is not such a big deal. In the UK and US its almost a right of passage, that everyone who aspires to be middle class or above should be aiming towards, but that is less so in the rest of Europe. Though I’ve never seen any evidence for that. Does it match your experience?

Home ownership is very low in Germany. Source: Wikipedia.

Germans don’t like debt, so they don’t like mortgages. (Germany also likes cash.) The rate is still (barely) over 50%, however.

The rate is higher in France.

Home ownership rates in the UK are only marginally higher, at 65%, but this is the same rate as in the United States. The Australian rate is 67%, and the Canadian rate is 67.8%. The Dutch rate is 67 to 69%.

In Norway home ownership is at 82%, because of politics that strongly encourages it. Mainly is low or no taxes on your primary residence, and no taxes in sale.

This has many positive benefits, but does lead to renting an apartment being a poverty trap.

Also, in the big cities home prices have risen a lot, partly because it is so economically advantageous to own vs renting. People are buying really small condos just so they do not have to rent.

So yes, in Norway it is a right of passage, like in the US. But it is often condos instead of houses.

As people have already mentioned, this is not true for other European countries.

Average home price in Oslo is about $700k

I’ve heard that the apartment renting concept is different between the US and Europe. In the US, apartment renting is typically something short-term. A US person may live in an apartment for just a few years and won’t really make any changes to it other than maybe painting it. But I heard that apartment renting in Europe may be done for decades and the tenant may make major changes, such as putting in their own lighting and kitchen cabinets. That kind of European model is more similar to how someone in the US would treat a condo that they bought, but in the US the condo resident is making mortgage payments to the bank while the European resident is paying a landlord.

Maybe not so much any more. There is tons of new housing in San Jose and Santa Clara, mostly condos because of their relative affordability. Lots of new housing in my town which is suburban is condos. But not so much outside of Indianapolis where my daughter lives.

My son-in-law, who is German, is intensely excited about buying a house in the near future since none of his family has ever owned one. One of the things he likes best about America.

I ran into an Englishman once who’d emigrated to Canada and he couldn’t get over being able to buy land.

I’m not sure why, as you can buy land in England too. It’s probably just a price thing - small island + densely populated = land and housing is expensive.

We do have a thing called leasehold in the UK, where you can buy a house or apartment, but not actually own the land it is built on (this is most common with apartments). It normally involves paying a nominal rent to whoever the land owner is, and sometimes you need to pay a lump sum to ‘extend the lease’, which can be costly. Leaseholders also have the right to buy the lease - ie the land, from the land owner. In the case of apartments, this would involve the apartment owners getting together to each buy a share of the freehold.

The majority of houses, however, are freehold - in that you buy the house and the land it’s built on.

That’s what he said “you can buy land”. I’m guessing he meant affordable for the middle class, and probably 100 acres or so.

The last place I lived in Houston fit the condo model but was known as a townhouse. Similar layout to a terraced house in the UK. At the time I moved here, a mid-terrace in Southeast England cost about 4 times what I sold the Houston house for.