Sales of existing condominiums and cooperatives held at the second highest pace on record during the third quarter, according to the National Association of Realtors.
Existing condo and co-op sales slipped 2 percent 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 percent above the 941,000-unit level of sales activity in the third quarter of 2003. The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative resale pace for that quarter were maintained for four consecutive quarters.
David Lereah, chief economist for the association, 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.”
The median existing condo price was $197,000 in the third quarter, which is 18 percent 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 percent 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.
Walt McDonald, association president and broker-owner of Walt McDonald Real Estate in Riverside, Calif., 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.”
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