Buyers showing renewed interest in condos

For the second consecutive month, condos sold for, on average, above their asking price — signaling renewed homebuyer competition for condos after a pandemic-fueled slump, according to a recent study by Redfin.

The typical condo sold for 0.7% above its asking price in June, following a premium of 0.4% in May. In dollar terms, the typical condo sold for $304,000 in June. The national median sale price for condos rose a record 20.3% year over year in June to an all-time high of $304,000. Prices for single-family homes increased even more, up 26.8% to a record $405,000. 

Nearly 42% of condos sold above asking price in June — more than double the 18.6% share in June 2020 and the 20.2% share in June 2019.

If a condo sold for 0.7% above its asking price, that means it was listed for $301,872, said Daryl Fairweather, Redfin’s chief economist. That’s quite the contrast from back in 2012, when Redfin reported that condos were selling for more than 4% below asking price.

“Many buyers who have been priced out of the market for single-family homes have turned to condos,” Fairweather said. “Earlier in the pandemic, many buyers shunned small condos in favor of large detached homes with space for offices and homeschooling. But now that many Americans are vaccinated and some are returning to the workplace, extra space isn’t as necessary and the benefits of shared amenities like a gym or a pool are more attractive. And the biggest benefit of condo living is the more affordable price.”

Condos sold at their fastest pace on record in June, with the typical condo that sold during the month going under contract in 22 days. That’s down from 43 days a year earlier and 36 days in June 2019, the latter of which is a better comparison because it was before the pandemic impacted the condo market.

Seasonally adjusted condo sales were up significantly in June, rising 59.7% year over year, and pending sales were up 38.2% year over year. At the same time, the number of condos for sale dropped 18% from a year earlier, while new listings were up 7.6%

“The fact that new listings are up while overall supply is down indicates that demand is high, and condos are selling quickly,” Fairweather said.

Looking regionally, the average condo in Austin, Texas sold for 5.6% above asking price, the highest premium of any of the largest 85 U.S. metros tracked by Redfin. Austin was followed by Rochester, New York (4.9% above asking price) and San Francisco (4.8% above asking price).

Condo prices increased most in Oklahoma City, Oklahoma (+78.5% year over year to $116,000), Bakersfield, California (47.1% to $177,000) and New Orleans (44.8% to $239,000). Prices also increased in all but two of the 85 largest metros: St. Louis, where the median condo sale price dropped 2.5% year over year to $161,000, and Philadelphia (-4.8% to $315,000). 

Indianapolis was the fastest sales market, with half of all condos going under contract in four days. Indianapolis was followed by Denver (5 days) and Elgin, Illinois (5 days). 

Condos sold for equal to or above their asking prices in 52 of the 85 metros, Redfin reported.

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