We are only helping our kids indirectly by paying their student loans. They both have funds from grandparents to cover downpayment.
When they were born their grandmother bought a stock for them that was re-invested. For D1, that covered downpayment. For D2, her stock didn’t do as well by when my MIL died we used our inheritance to make her even with her sister.
@jmnva06 - that indirect approach is in part how I look at helping kids with their future large purchases, etc. Helping D graduate college debt free will give her more options - including (if she chooses) perhaps being able to buy a home earlier than she would if strapped with huge loan repayments for years/decades.
Son’s education costed much less so was thinking of helping him out with a downpayment/house purchase - but after he could afford (and wanted to pay for!) the monthly payments, upkeep, taxes, unexpected expenses, etc…
So true! I feel that by paying for college for our kids, which helped them graduate debt free, is helping them for their financial future. Having your parents pay for college and graduating debt free is a privilege, as is getting help for a down payment.
DD graduated in 2020, stayed with us rent free for a year working remotely and has been renting in SF with roommate for the last year and a half. Her portion of the rent is about $1600 including utilities in a very nice neighborhood but really old building. She is in long term relationship but doesn’t want to move in with her boyfriend yet and thinking about buying her first house on her own. We advised her against buying condo which is the only thing she can afford now even though she makes good money working in tech. We were looking at houses together and even old, small 2-3 bedroom house will be over 1.7 mil and not in the areas she wants. Realistically there’s no way she will be able to buy house like that on her own. We will definitely need to give her at least half for down payment so she will have reasonable monthly payments. One of her friends just moved to his first house which parents put down half and now is trying to rent out two rooms.
My I ask why you advised her against buying a condo, if that’s what she can afford?
I wonder if we’ll renting become not such a big deal in coming years…
I wondered that too. Our kid could not afford a house, but he could afford a townhouse. And he really likes it (except when a repair needs to be made and he can’t just call a landlord).
Our first house was a condo, we bought it because it’s what we could afford. And we did it with no help…and we could just barely afford it too…
One thing we liked about the condo was that we didn’t have to worry about outdoor maintenance, at least in the front yard. Plus, it was a condo complex that was part of a larger subdivision that was (and still is) considered very desirable. It had a nice pool, pretty landscaping, good elementary school nearby. We made a lot of money when we sold it.
Mine just moved back from the Bay area, now I don’t have to worry about affordability. But she may move again soon, but not to the Bay Area. She doesn’t like living there, neither did I. But when she first graduated in 2017, I told her to move up there. She’s a lot happier in SoCal. She likes living closer to beaches.
Years ago, before I bought my starter home, my mom also advised against condo, so I didn’t buy one.
Interesting about the condos. Is it a resale issue?
We’ve told our D to consider a condo as a first home when it’s time. Less maintenance and a bit more security as she’ll be traveling a lot.
The reason we advised against buying condo is because one loses independence while owning a condo. You very much dependent on you board. You might be having random assessments for something you don’t need and have no saying in it. The more units in the building the bigger problem is. That is coming from years of owning townhouse with only 3 neighbors, but I see how struggle my relatives in large building. Plus they don’t appreciate at the same rate as houses. That’s just our experience so it might not be the same for everyone and not for all locations.
In our kid’s case, it also stabilized monthly lodging payments. Rent was increasing every year by a lot. This purchase somewhat fixed that issue.
Our condo was great and everyone we know who owns a condo loves it. But, I guess it depends on where you live. And it depends on the HOA. Our current neighborhood which is single family home has a much stricter HOA, then the condo/townhouse we lived in before. Just the other day, we got a note saying we’d left our Halloween pumpkins out for too long. We do live in an expensive area with very good schools, so that might help make condos more desirable in our area and help the resale value a bit…
Covid and the tech bubble bursting somewhat have affected the condo market more than the single family homes in SF. So while it may be riskier in terms of what one might hope for in terms of appreciation, it’s t might be a good time to buy a condo as one might be able to get a relatively “good” deal (in Sf that means not selling your first born, LOL) SF House & Condo/TIC/Coop Market Metrics, May 2022 ‣ San Francisco Real Estate
My son and his wife just bought a row house from the 1930’s in DC. There are lots of them in DC -Georegetown , Dupont Circle, Logan Circle, Glover Park, Columbia Heights, Kalorama, Capitol Hill, etc. Many are no cheaper than single family homes. They did not ask for help with a down payment and we did not offer. We did give them a little money after they closed a few days ago to get something for their new home and they were appreciative. We’ve seen it online but I am excited to see their home in person next month!
We did just give them a few thousand earlier this year(which they did not ask for, we offered) for their wedding , so i don’t think they were expecting more substantial money for us for a home.
That’s true as rate of appreciation, same with older house, newer houses appreciate much faster. This comes from my SIL who’s in the real estate business in SoCal, not anywhere else, each region might be different.
Future SIL owns a very small condo in a popular Seattle neighborhood. Purchased about 5-6 years ago, for fear Seattle was going the same direction as San Fran regarding housing costs, and tech. It has not appreciated at all during that time. I think several factors played a role. His generation is starting to have children, so wanted more space. Covid, and the lack of a small courtyard or even balcony, and desire for home office space definitely hurt. Older building with character, but starting to have more problems (can say the same about myself 
) , HOA’s increasing. Potential tech lay-offs.
Unfortunately housing costs by comparison have skyrocketed in the same time period. If his condo would have increased enough to help with a larger down payment on a home, it may have been fine. But that’s not the case.
In my area (Northeast urban), free standing homes appreciate faster- but you can dump a condo MUCH faster in a down market, with a smaller percentage drop. Just something to consider- it’s not just about appreciation, it’s how liquid the property is if you need to sell quickly for a relocation, change in circumstances, etc.
My son and his wife recently purchased a townhome near DC. They considered a condo, but the HOA fee was close to $500, on a small condo. They got an end unit townhome with more space and much lower HOA type fees.
I loaned them money for down payment, at under the rate they could get a mortgage (possibly 0 interest, but we have an understanding at the max it will be). It saved them thousands of dollars in mortgage insurance payments and the mortgage over time.
We briefly loaned DS a sort of bridge loan (so he didn’t have to take one out)when he closed on his new home in early fall and when the old one went on the market. Fortunately it sold quickly and at Thanksgiving he pulled out his checkbook and repaid us. We were happy to help.
A similar story. We bought a condo where kid and her now husband live. Nice area of Seattle, well managed building. Zero appreciation in 5 years. We gift the rental fee to the kids and will gift the condo to them in due course. Even though the condo has not appreciated at all, it was a good deal. Kid was shaken out of two rentals because LL wanted to sell. It was a PITA to look for a new place. Her current LLs are in no hurry to sell. 
And we don’t mind the HOA… reasonable folks run that show.