Condo vs. Townhome Investments: Why We Disagree with the “Close Race” Narrative

A recent analysis suggests that condos and townhomes have performed remarkably similarly as investments over the past decade, with townhomes appreciating 86.5% compared to condos at 82.7% nationally. While these numbers paint a picture of neck-and-neck competition, we believe this national average tells a misleading story—and frankly, we’re surprised the gap isn’t much wider.

The Problem with National Averages

National real estate statistics can be deceiving. They blend high-performing urban condo markets with struggling suburban ones, luxury townhome communities with modest developments, and markets with vastly different supply-demand dynamics. When you dig deeper into the fundamentals, the case for townhomes as superior long-term investments becomes much clearer.

Why Townhomes Are the Clear Winner for Most Investors

Land Ownership Makes All the Difference

Unlike condos, when you buy a townhome, you own both the structure and the land beneath it. This isn’t just about control—it’s about long-term wealth building. Land appreciates more reliably than airspace, and townhomes track closely with single-family home performance because they share this fundamental characteristic.

As real estate investor Eric Hughes notes in the original analysis: “The price growth of townhomes will track extremely closely with the price growth of single-family homes in general.” That connection to the broader housing market provides stability that condos simply can’t match.

Lower Fees, Better Control

One of the most compelling arguments for townhomes is their typically lower HOA fees and dues structure. While condo owners face monthly fees that can range from $300-500 (or even $2,000+ in luxury buildings), townhome fees are generally more modest and transparent.

More importantly, townhome owners have greater control over how their fees are spent. They’re not subject to surprise special assessments for building-wide repairs they didn’t vote for, or amenities they don’t use. As one Miami example cited in the research showed, condo residents were hit with a $1 million special assessment just to bring their building up to safety standards—that’s money that never contributed to property value.

No Competition with the Apartment Complex Boom

Here’s a factor that the national statistics miss: townhomes don’t directly compete with the ultra-modern, amenity-packed apartment complexes that have dominated new construction over the past 20 years. These luxury rental buildings offer concierge services, rooftop pools, fitness centers, and other high-end amenities that make older condos look dated by comparison.

Townhomes, on the other hand, appeal to buyers seeking that “house-like” experience—private outdoor space, multiple levels, and the feeling of homeownership that no apartment complex can replicate, regardless of its amenities.

Regional Performance: The Devil’s in the Details

The original research reveals telling regional differences:

Notice that condos only outperformed in the most affordable regions (Midwest and South), while townhomes dominated in higher-cost markets where serious wealth is typically built. This suggests that as markets mature and prices rise, townhomes become the preferred investment vehicle.

Why We’re Skeptical of Future Condo Performance

Several trends work against condos as long-term investments:

Meanwhile, townhomes benefit from their scarcity in many markets and their appeal as the closest alternative to single-family homes for buyers priced out of detached housing.

The Bottom Line: Look Beyond the Headlines

While the national numbers suggest a close race between condos and townhomes, we believe this seriously understates townhomes’ advantages. The combination of land ownership, lower ongoing costs, freedom from special assessments, and positioning in the “missing middle” of housing types makes townhomes the clear winner for most long-term investors.

Yes, there are markets where luxury condos in prime urban locations will continue to perform well. But for the average investor looking at the next decade, townhomes offer a more reliable path to building wealth through real estate.

The national averages may show a close race, but when you factor in total cost of ownership, control, and market positioning, townhomes aren’t just ahead—they’re in a different league entirely.

To read more about this topic, visit Condo vs. Townhouse: Where Buyers Can Gain the Most Equity.