Sales of existing condominiums and co-ops flirted with the 1 million mark in the second quarter of this year, setting a new record, the National Association of Realtors reported today.
Preliminary seasonally adjusted sales statistics show 996,000 condos and co-ops were sold from April through June across the nation, which compares to the revised seasonally adjusted rate of 934,000 for the first quarter of the year – a gain of 6.6 percent. And second-quarter sales activity was 15.4 percent above the 863,000-unit sales level during the second quarter of 2003.
In 1993, condo and co-op sales accounted for 9.6 percent of the total of all existing-home sales. Last year, condos commanded a 12.8 percent market share – a 33.3 percent rise in the portion of sales over the last decade, the association reported.
David Lereah, chief economist for the association, said, “First-time buyers and baby boomers, the ‘bookends’ of the housing market, are driving condo sales. While affordability is a factor for entry-level buyers, changing lifestyles are a major reason that condos are a bigger market share today than in years past.”
Walt McDonald, association president and broker-owner of Walt McDonald Real Estate in Riverside, Calif., said that rising interest rates may have motivated some buyers. “Even if there was some fence-jumping, mortgage interest rates and the costs of servicing a loan are so low in historic terms that the rate increase may not be as big of a factor as in years past,” he said. “The demand for housing from growing and aging population segments, and improvements in the economy, are bigger factors in record condo sales. The rise in market share also shows condos are a good investment.”
According to Freddie Mac, the national average commitment rate for a 30-year conventional fixed-rate mortgage was 6.13 percent in the second quarter, up from 5.6 percent in the first quarter; the rate was 5.51 percent in the second quarter of 2003 – the lowest quarterly average since the series began in 1971.
The median existing-condo/co-op price during the second quarter was $189,400, which is 12.1 percent higher than the same quarter in 2003 and 7.1 percent higher than the first quarter of 2004. The median is a typical market price where half of the units sold for more and half sold for less. By comparison, the median price of an existing single-family home was $183,800 in the second quarter, up 9.1 percent from a year earlier, the association reported.
In the South, the median price of existing condos and co-ops leapt from $142,900 in the first quarter to $163,300 in the second quarter, a gain of 14.3 percent. The median price of condos and co-ops in the south has increased 24.6 percent since the second quarter of 2003. Existing condo and co-op sales in the south rose 4.4 percent in the second quarter to a record 454,000-unit pace, which was 16.1 percent higher than the same quarter in 2003.
Existing-condo and co-op sales in the Northeast jumped 13.8 percent in the second quarter to a record 173,000-unit pace and were 21.8 percent above the second quarter of 2003. The median price in the Northeast was $211,100, up 10.1 from the same period a year earlier. In the West, existing-condo and co-op sales rose 6.8 percent to a record annual rate of 253,000 units in the second quarter and were 10.5 percent above the sales rate during the same quarter in 2003. The median condo price in the West was $226,200 in the second quarter, up 8.6 percent from a year ago, the association reported.
Condo and co-op resale activity in the Midwest increased 5.5 percent to a record seasonally adjusted annual pace of 116,000 units in the second quarter, or 13.7 percent above the same period last year. The median condo price in the Midwest was $178,300, up 6.4 percent from the second quarter of 2003, the association reported.
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