Home prices have dropped 8.6% year-over-year, while condo prices only decreased 4.4%, according to a new report from Point2.
Point2’s report on current home price corrections found that condo prices decreased in only 65 of the 100 largest cities, while home prices decreased in 88. Also, condo prices kept rising in 33 of the 100 largest cities, whereas single-family home prices only continued their upward trajectory in 10 cities.
Point2 stated that the evolution of single-family home and condo prices in the 100 largest cities shows that increasing demand for condos makes prices in this segment hold up much better than single-family home prices.
Key highlights:
- When it comes to condo prices, the decreases were far less generalized than single-family home price drops, but slightly more consistent, with the top 10 steepest decreases ranging between -15% and -29%.
- In Stockton, California (the city with the biggest drop) condo prices fell from $252,500 in May to $180,000 in October.
- Plus, condo prices contracted more than 20% in four other cities: Raleigh, North Carolina; New Orleans, Louisiana; Omaha, Nebraska; and Glendale, Arizona— which saw condo prices drop -21% to -25%.
- Zooming in on the cities with the most significant single-family home price contractions, some of them displayed dramatic differences: The median single-family home price in Irving, Texas went from $450,000 in May to $353,000 in October following a -22% contraction.
- Further North, Toledo, Ohio experienced a similar contraction— but here, house prices dropped from nearly $125,000 to $100,000. Our analysis also revealed 10 other large cities where house prices fell between 15% and 18%.
- Price increases point to the same trend of growing demand for condos: In Oklahoma City, Oklahoma, condo prices jumped an astounding 79% since May. At the same time, the biggest price increase for single-family homes was a meager 11% in Tulsa, Oklahoma.
- Aside from Oklahoma City, condo prices increased by more than 10% in nine other markets, with Tampa, Florida trailing Oklahoma City with an impressive growth of its own: Condo prices in Tampa went up 40%— from a median of $257,500 in May to $360,000 less than half a year later.
Major takeaway:
“The current trend reversal is a direct result of houses—especially big houses—dominating the mindset of buyers all throughout the nation for two whole years during the pandemic. The need for space was felt so acutely during lockdown that renters and even existing homeowners were extremely determined to find more spacious homes to accommodate their new lifestyle,” said Andra Hopulele, senior real estate writer for Point2 and author of the report. “And, more than just determined, buyers were also willing and able to pay increasingly more for more space. When interest rates were hovering around 3% (although sustained demand pushed prices higher and higher) buyers still had the courage to take the plunge.”
Added Hopulele, “But increasing interest rates were the straw that broke the buyers’ back, forcing them to take into consideration the more affordable alternative. Those who still wanted to make the move to homeownership were now choosing condos over houses.”
For the full report, click here.
