Posted on: Friday, February 20, 2004
Condos hit single-family price parity
By Thomas A. Fogarty
USA Today
Condominiums, the long-suffering stepchild of the U.S. housing market, have come of age.
In big cities and across the Sun Belt, condo sales are booming, and prices are up smartly. For many, condos conjure an image of cramped living, high-priced parking and mettlesome building associations.
But they're hot because they're still affordable, and they meet the demands of baby boomers and Generation X buyers for low maintenance and convenient, hip, urban locations. They've moved in the past few years from laggard to leader in a national housing market that took off a decade ago and has been kept strong by high demand and low mortgage rates.
For the first time, the price midpoint for condos in the final quarter of 2003 topped that of detached single-family homes — $174,700 vs. $171,600, the National Association of Realtors has reported. Sales volume is growing faster than that of single-family homes and is closing in on 1 million units per year, NAR says.
Dawn Keer is among recent buyers fueling the condo boom in Philadelphia's Center City district. Age 32 and single, she sold her suburban townhouse last year and moved into a $262,000 downtown condo with about half the living space. The attraction: the neighborhood's night life, cultural amenities and walkability.
"For me, it's where I had been spending my time anyway," says Keer, who works in radio sales and marketing.
Genevieve Hanson, also 32, expresses similar motivation for her recent purchase of a $300,000, two-level loft in Logan Circle, a revitalized neighborhood in Washington, D.C. The neighborhood's diversity and proximity to cafes and culture attracted her. "I definitely like the feel of living in the city," says Hanson, who drives 30 minutes to her job as a management consultant in suburban Virginia.
Condos are the housing of choice for many single women, says research by the National Association of Realtors. About one-third of condo buyers are single women, vs. about one-fifth of single-family homebuyers, says NAR.
NAR research shows condos also are popular with first-time buyers seeking a foothold in the fast-appreciating residential real estate market.
"I tell all my first-time borrowers they need to get on the (real estate) merry-go-round," says zipRealty agent Helen Ross, who sells in the suburbs of Washington. As often as not, she says, that means a condo. Even then, condos aren't cheap — just cheaper. In suburban Reston, Va., Ross says, condos can be found in the low $200,000 range, about half the entry price for a detached home.
Ted and Naomi Bardacke are first-time home buyers who opted for a condo when they moved from New York to Southern California. Their 1,000-square-foot condo in Santa Monica cost $425,000, but Ted Bardacke says it's worth it. He can walk 10 minutes to his job as an urban planner for a nonprofit environmental group. The beach and shopping are within walking distance, too, allowing them to get along with one vehicle in the USA's most auto-centric region.
As former renters, the couple is comfortable with apartment-style living, he says. And, he says, they are likely to do fine if and when they sell. "I don't know what's happening to the market for condos, but I do know they're not making any more beach," he says.
Likewise, Creed Pettit, 27, says his new $550,000 condo in nearby Marina del Rey is a bargain compared to single-family homes in the neighborhood. "You'd be looking at $1 million-plus," says Pettit, sales director at a technology company.
Condos are popular with empty-nesters and retirees seeking a reprieve from the upkeep of a single-family home, says NAR research.
Ross, the Northern Virginia agent, says she frequently sells condos to baby boomers who are replacing big family homes with two residences. "They've already bought their beach house, and now they want a condo close to the city," she says.
