First-timers fuel condo sales
November 6, 2002
Third quarter pace eases but still 5.4% higher than last year
Inman News Features
Sales of existing condominiums and cooperatives slipped in the third quarter but remain on track for a new annual record, according to the National Association of Realtors.
Existing condo and co-op sales eased 1.3 percent to a seasonally adjusted annual rate of 815,000 units in the third quarter from an 826,000-unit pace in the second quarter, reported NAR. Sales remained 5.4 percent above the 773,000-unit level of sales activity for the same period a year ago.
The three strongest quarters on record for condo sales are all in 2002, according to NAR's Chief Economist David Lereah. "So far this year, the annual pace of condo sales has averaged an 826,000-unit pace," he said. "This is far above our previous annual record of 746,000 units set in 2001, so we'll easily set a new record this year."
NAR President Martin Edwards Jr. said condos remain an important market segment for first-time home buyers because in high-cost markets they are often the only option. "Although there has been a trend over the last few years for higher sales of luxury condominiums, the majority of condo units are less costly than single-family homes," he said.
The median existing condo price was $143,000 in the third quarter, a 14.9 percent increase over the same quarter last year, according to NAR. By comparison, the median-priced existing single-family home was $161,800 in the second quarter, up 7.2 percent from a year ago.
The typical single-family home costs 13.1 percent more than the median-priced condominium, according to NAR. However, Edwards noted that the median price of condos continues to rise at double the rate of single-family homes, driven by increasing sales of higher-end units.
In the South, condo/co-op resale activity rose 2.7 percent in the third quarter to a 383,000-unit pace; this was 9.1 percent higher than the same quarter a year ago, according to NAR. The median price in the South was $117,500, which was 19.4 percent higher than a year ago.
Existing condo and co-op sales in the Midwest rose 2.1 percent from the second quarter to a level of 96,000 units in the third quarter, and were 7.9 percent above the third quarter last year, reported NAR. The median resale condo price in the Midwest was $150,400, up 9.1 percent from a year ago.
In the West, the sales pace of condos and co-ops fell 4.9 percent from the second quarter to an annual rate of 214,000 units in the third quarter, but was up 2.4 percent from the sales rate during the third quarter last year. The median price in the West was $167,100, up 15.6 percent from a year earlier.
In the Northeast, condo/co-op resales dropped 8.2 percent between the second and third quarters to a 123,000-unit pace, and were .1 percent below the third quarter a year earlier. However, the region experienced the sharpest price increase in the country, with the median price rising 19.7 percent from a year ago to $146,400.
Copyright: Inman News Service