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The condo market is back with a vengeance, and new data from Zillow has determined that this once-ailing sector is now outpacing single-family homes in appreciation.
Zillow reports that condos are now appreciating 5.1 percent annually. In comparison, single-family homes are appreciating 3.7 percent annually. This is a major twist of fate: The typical condo lost 33.2 percent of its value during the housing crash and subsequent recession, whereas the median single-family home only lost 20 percent of its value.
And condo values are appreciating with greater velocity in the nation’s hottest housing markets, including Dallas-Fort Worth (20.1 percent), Denver (19.7 percent), Houston (13.6 percent), San Francisco (13.5 percent) and San Jose (13 percent).
But not every market is experiencing this uplift: Los Angeles saw its average condo appreciation level fall 0.2 percent, while Baltimore weathered a 2.3 percent depreciation.
“The housing bust hit condo values hard, and over the past few years, buying a condo wasn’t always considered a good investment compared to a single family home,” said Zillow Chief Economist Svenja Gudell. “But that’s changing, and condos increasingly represent a strong-performing, often affordable choice, particularly for first-time buyers interested both in homeownership and in keeping a lower-maintenance, city lifestyle. However, as younger buyers compete for homes in urban neighborhoods, it’s important to consider some of the additional costs of condo life, especially homeowner association fees, when weighing options.”