Condo Prices Jump To Record High
Demand for single-family homes surged during the pandemic — but it surged so much that condos are now all some homebuyers can afford.
A typical condo sold for a record $319,000 in February, according to a new report from Redfin.
Despite the 14.6% increase in price from a year earlier, condos are still a more affordable option amid skyrocketing home prices, the report found. Single-family home prices hit a record $406,000 in February, up 15.9% year over year and up 34.9% from two years earlier.
“The condo market has bounced back,” said Chance Glover, a Redfin manager in Boston. “People are no longer afraid to live downtown, close to the crowds — and they often prefer it, because they’re close to the office and all the amenities of the city. Rising prices are pushing single-family homes out of reach for a lot of buyers, so condos are affordable in comparison.”
Condo prices have also jumped because of a shortage of inventory, Redfin said.
Condo supply was just shy of a record low in February, down 28% year over year. New condo listings were down 6.1%. Condos are experiencing an even bigger inventory decline than single-family homes, which saw a 14% year-over-year drop and a 2.5% drop in new listings.
The supply shortage held back condo sales, which were down 5.3% year over year, in line with the decline for single-family homes. But condo sales were up 13% from February 2020, while sales of single-family homes were essentially flat over that same period, the report found.
However, condos still aren’t as competitive as single-family homes.
Nearly two-thirds (64.6%) of condo offers written by Redfin agents faced competition in February, up from 49.3% a year earlier. That’s partly due to the lack of supply, with buyers competing for the few condos on the market. By comparison, 72.9% of offers for single-family homes faced bidding wars.
Meanwhile, 41.1% of condos sold above asking price, up from 24.9% a year earlier — another sign of increasing competition. Houses are still a bit more competitive, with 48.4% of single-family homes selling above list price (up from 38.2% a year earlier).