Not Enough Condos to Satisfy Demand?
NEW YORK – In 2019, the average sale price of condominiums was 16% lower than the average sale price of single-family residences, according to data based on 25 of the largest housing markets.
Those lower condo prices could make them a growing draw for millennials and first-time home buyers, according to CoreLogic, driven “toward buying condos because they tend to be more affordable than single-family homes and because condos typically come with a lower maintenance burden and are mostly located in urban cores.”
About 40% of all condo-purchase mortgage applications last year were from first-time home buyers, compared to 33% of all non-condo purchase mortgage applications by the same segment. In 2018, 47% of all condo purchase mortgage applications were from millennials in, up 2% from 2018.
Downsizing baby boomers are also showing an increasing draw to condos, the report notes.
Five states with the highest share of condo sales in 2019
- Hawaii: 46%
- Washington, D.C.: 42%
- Massachusetts: 20%
- Florida: 18%
- Illinois: 17%
By metro level, Austin, Texas, had the largest annual increase in condo sales in 2019 at 12%.
“Given worsening affordability challenges in many markets, condos could be a viable option for many,” CoreLogic says in the report. “In the coming years, younger millennials (age 30 or below) are likely to drive much of the condo demand as they are a very large group. Still, there will be more condo demand than supply as young millennials approach peak household formation and home buying age.”
While the inventory of for-sale condos is greater than single-family homes, however, condo supply still remains tight. The national inventory for condos plunged to four months in December 2019 – the lowest level since 2006.
Source: “Millennials Are Driving the Demand for Condos as Sales Increase in Certain Markets – 2019 Data Reveals,” CoreLogic (Aug. 17, 2020)
© Copyright 2020 INFORMATION INC., Bethesda, MD (301) 215-4688