Downtown Condo Costs

Friends of Laska, 

On average in the United States 34% percent of all family expenditures are spent on housing related costs. Rent/mortgage, utility and general upkeep costs make up the greatest percent of our expenditures. Whether we opt to spend this much or have little choice in the matter, this is a significant percent of our expenditures. (Transportation costs are a distant second at 17.6%.)

When my wife and I were deciding whether to live in her downtown condo or at my house in south Minneapolis we knew it would cost more to live downtown.  We just didn't know how much more so we first looked at our direct housing related costs.  I've attached a spreadsheet showing the exact comparison we used except the PITI (Principal, Interest, Taxes and Insurance) represents an "average" home or condo.  (The median condo price in downtown Minneapolis (zip code 55401) is roughly $275,000 and the median home price in south Minneapolis (zip code 55406) is roughly $140,000.  If we assume a Fix30 mortgage at 4.75% interest and a $20,000 down payment with about $5,000 in closing costs, the PITI for a condo in downtown Minneapolis would be about $1,880 per month and a house in south Minneapolis would be about $980 per month.) 

From this spreadsheet you can see that it costs about $870 more per month to live in a downtown condo than in a south Minneapolis home. You cannot deny that this is a VERY substantial difference.  Had we opted to stay in our south Minneapolis home we arguably could have saved over $10,400 per year towards our dream house or our child's education. 

However, as you will find out in my next blog, there are very good arguments for paying more to live in downtown Minneapolis and even whether the difference truly is $870 per month.