luxury townhouse vs single family house

Asked by David, bay area, ca Thu Oct 2, 2008

I'm looking to buy in the campbell/cambrian area. The question is given a 10-15 year old, modern townhouse that has all the upscale items, and has more square footage than most homes VS a 40-50 year old SFH with a larger lot size, but less sq. footage and an older(dated) design... which would you go with.

Looking at a beautiful townhouse in the Vizcaya complex (this townhouse is a former model, and has 2650 sq feet of living space, attache two car garage and is an end unit.. it acutally feels very much like a sfh) vs some other SFH is the same area.

The townhouse is close to 900K and in this price range.. there are plenty of single family homes to be had.

Is there such a thing as a townhouse premium? I am on the verge of thinking about paying more for a townhouse vs a SFH.. and I can't imgaine that I'm the only one that thinks this way.

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Travis Jacks…, Agent, Campbell, CA
Sun Sep 18, 2011
When deciding on a townhome or SFR consider the costs and benefits of being in a townhome. Townhomes have a home owners association also known as a HOA. The fee is around $300 a month and they take care of landscaping and maintenance of pool/recreation facilities. For some people this is perfect because it provides a living environment with less maintenance compared to a single family residence. But what people often overlook is that the extra $300 a month will never be put towards the equity of your home. Even more importantly; if that extra money was used to increase your mortgage amount by $300 a month, you could afford a SFR which is $60,000 more (30 year mortgage) . This extra amount could put you in a much more desirable single family residence.
1 vote
Ruth and Per…, Agent, Los Gatos, CA
Sat Nov 20, 2010
Hi David:

It is a life style and needs issue. Vizcaya is a great complex associated with great schools.

Critical not to be in Vizacaya very close to Camden Ave; further away the better.

Also, David you need to consider the ability to buy something that is move in condition and to be able
to enjoy life from day 1. However, depending on what stage you are in your life, whether 2 story home works for you or a one story becomes critical. Also, the cost of HOA deters many buyers of today as well as
in the future.

However, in the long run it is found that a single family home say 2300 sf. with a lot and no HOA
compared to a 2650 sf home that is bought as a fixer or updated will generate a better ROI.

Best Regards
Perry & Ruth
0 votes
Hilio, , 94040
Wed Feb 25, 2009
This is an interesting question, let's examine it some more.

Townhomes are primarily a first step in home ownership. Ownership ins townhomes are usually condo or pud type ownership. puds are better, as you'll actually own the land as well.

There are also two types of townhomes in this area. One aimed at the entry level market and there are townhomes aim at attracting buyers that can afford a single family home, but choose not to.

Erica has a point, when she says that a townhouse, if not beautifully updated will not be worth as much, as a nice home on a nice lot. Erica also fails to point out that the same is true for a single family home of the same age.

Bottomline, if a SFH is not "beautifully update" it will not be worth as much also. The townhouse, if the HOA is worth anything, will make sure that the exterior of the townhouse is in excellent condition. The same can not be said for a SFH.

Take this test, drive down a random street in the 95008 zipcode, or the nearby Cambrian Park area. You'll see tons of 30-50 year old SFH, that are not the most maintained properties. Drive down a nice community controlled by a HOA. Vizcaya (the community mentioned), or somewhere similar. You'll notice that all the units - from the outside - look excellent. The landscaping is well maintained, etc...

This is the one benefit to a HOA controlled community (this could mean townhouse, condo, or SFH.. an increasing number of newer developments are under the control of a HOA... it's a trend... :-) )

The 2650sqft townhouse in vizcaya, with the 5000sqft lot sounds like a winner. It rivals a SFH in everryway, besides the type of ownership. It is an end unit, and the lot size is comparable to most SFH in the area. (The unit seems to have been sold... I did a quick check on mls, and the only "former model home" in vizcaya closed in dec).

Botttomline, I think SFH are the great value, and you can certainly will have the flexiblity to make improvements on the lot within city guidlines. But don't overlook a luxurary townhome. Luxuary townhomes were build for potential SFH shoppers, and manytimes these ttype of townhomes actually command a premium.

Don't stay away from a townhouse just because it is a townhouse. Home renovation (espically the kind of renovation and remodeling needed to bring a 1950s - post WWII house - to "luxuary" standards is not for the faint of heart......) is not for everyone.
0 votes
Erica Glessi…, Agent, San Jose, CA
Wed Dec 10, 2008
Land and lot size will typically win when you look at investments over time. In 30 years, the townhouse, if not beautifully updated, will not be worth as much as a home on a nice lot where the buyer can do anything they want to upgrade the home.

I sold a home in Campbell a few years ago where the home was surprisingly updated. All the homes around were selling for $600,000 and this home sold for $800,000. It was on a big lot with lots of wonderful upgrades.

I understand your attraction to the 2650 SF -- that is rare in a single family home in our area -- and only you can know what you want. But if you are purely looking at 'what will my money buy me down the line' than I suggest you move over to single family and stay away from townhouses.

That's my two cents! Good luck!

Erica M Nelson
0 votes
Xyz, Home Buyer, Sunnyvale, CA
Wed Dec 10, 2008
Anyone have any other communities they can recommend?

robson homes - very close to santa clara university. Not an established neighbourhood, but looks like it will develop soon. I liked their design/style - its single fly homes.

Personally, I would go for a single fly home. Looked at various townhomes, but finally decided on single fly.
0 votes
David, Home Buyer, bay area, ca
Sun Nov 2, 2008
Thanks Everyone,

I think I agree that this is a lifestyle decision. The Vizcaya complex is very unique in that while techinally it is a PUD townhouse community, it offers the type of modern styling, and architecture you would expect of a nice SFH. I've seen some SFH, in the same price range.. and I don't think any have been as nice. Larger lots, maybe, but we're talking about ~4500 sqft lots, and 2600+sqft living space @ vizcaya -- this is larger than some SFH around the same price.

Still looking, but vizcaya has left a good impression in my mind.

Have also been looking at wild orchid in mountain view (an example of new construction) - smaller living sq footage, and smaller lot, but with new construction and an awesome location right off of castro street.

Anyone have any other communities they can recommend?
0 votes
Dorene Slavi…, Agent, Torrance, CA
Sun Nov 2, 2008
As far as return for your investment, the SFR is the better place to put your money. Townhouses and Condo's appeal to many people because of the amenities( pool, spa, health club etc) the community living and the security. They are a common first step in home ownership.
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0 votes
Jason Sampat, , San Jose, CA
Sun Nov 2, 2008
I think getting SFH is much better than Town House. Your maintainece fee is low in SFH and property appreciates and sells faster too. In Town Home you have higher probablity of getting nasty neighbors compared to SFH. Paying $900k for Town Home you described seems to be little steep. Wait for one more year!... things are gonna get worse with the economy! Bottom is at least one year away.

0 votes
Ali Moein, Agent, Saratoga, CA
Fri Oct 3, 2008
Hello David,

As mentioned below, SFH will appreciate at a higher rate than a TH. The point I'd like to make is that you can find a newer single family home with all the modern amenities you're looking for in the $900K price range. So I don't believe you'd have to settle for a TH where you can everything you'd want in SFH in your price range.

Ali Moein
0 votes
Bill Mccord, Agent, San Jose, CA
Fri Oct 3, 2008
This is primarilly a life style decision. If you would like to spend most of you weekends and evenings on social activities outside the home i.e. sking, boating, etc the Vizcaya homes would be a good choice. They are very well constructed and will always be low maintenance. The home owner dues take care of most of the maintenance that you will have to do yourself (or pay someone to do) in a traditional detached house.
If you like the contemperary styling found in most newer homes then again Vizcaya looks good against the low ceilings and darker rooms in a typical 40-50 year old detached house.
In my experience the Vizcaya buyer is typically younger, without children, and spend most of their free time with friends outside the home community. If they start a family they are likely to think about moving to an older, more family oriented neighbourhood with more convenient access to schools and parks and where you expect both yourself and your children to make friends for the longer term.
When it come to value of your investment I see no difference between the two. When you come to sell Vizcaya the buyer will be someone similar to yourself at this time and the price differential will still be similar.
Hope this point of view is helpful.
Good luck,
0 votes
Arn Cenedella, Agent, Greenville, SC
Fri Oct 3, 2008

In terms of appreciation, I would say you will always be better buying a single family home if you can afford one.

A very high percentage of new construction in the Bay Area is of townhouses and condominiums which I believe will help keep the prices down.

NO more land is being created :-) which leads to greater appreciation for single family homes on normal lots.
You are correct that at $900,000 in Campbell/Cambrian; you have many single family options.

Paying $900,000 for a townhouse in Campbell is buying near the top of the market which sometimes can be a dnagerous thing.

That being said, the property you describe sounds wonderful - you if it makes you happy and you want to live there, BUY it but just relaize you are probably giving up some appreciation in the future for the pleasure of living in a new larger place. It is your call. There is no one right answer.

0 votes
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