Condominium Sales Update

The condominium market continues to be strong in New Haven County. The first three quarters of 2004 have seen 2,204 units sell at an average price of $153,683, a 10% increase over the average sale price for all of 2003 ($139,520). 2,638 units sold in all of 2003.

Nationally, sales of existing condominiums and cooperatives held at the second highest pace on record during the third quarter of 2004, according to the National Association of Realtors (NAR). Existing condo and co-op sales slipped 2.0% to a seasonally adjusted annual rate of 990,000 units in the third quarter from an upwardly revised record pace of 1.01 million units in the second quarter. Sales were 5.2% above the 941,000-unit level of sales activity in the third quarter of 2003.

David Lereah, NAR’s chief economist, said condo sales will easily set a record this year. “We’ve seen an incredible pace of existing condo and co-op sales over the last six months, but we’re also seeing some exceptional price appreciation,” he said. “In fact, the median condo price has been rising at more than double the rate of single-family home prices. Although inventories are tight, the reason goes beyond supply and demand with a greater mix of upper-end units working their way into the market.”

Nationally, the median existing condo price was $197,000 in the third quarter, which is 18.0% higher than the same quarter in 2003. The median is a typical market price where half of the units sold for more and half sold for less. By comparison, the median-priced existing single-family home was $188,500 in the third quarter, up 7.7% from a year ago. Because there is a higher concentration of condos in more expensive housing markets, the national median condo price is higher than the national single-family home price. Within a given area, condos typically cost less than houses.

NAR President Walt McDonald said the condo sector has come into its own. “This will be the ninth consecutive record year for condo sales,” he said. “Even when a recession slowed the single-family home market in 2000, the condo market continued to boom. In terms of sales, the existing condo and co-op market is essentially as large now as the new single-family home market. Low mortgage interest rates are enabling first-time buyers to enter the housing market, and in high-cost areas that often means a lower-end condo unit. At the same time, empty-nesters are using the equity from a larger single-family home and are driving sales at the upper end of the condo market.”