Monday, September 9, 2013
Condos Take The Spotlight In Housing Recovery
Even with the housing Recovery in consideration, over the last few years the condo sector has been far from impressive in both growth in sales as well as growth in development. The blame for this, however, is not to be put solely on the housing crash, but the lack of physical buyers that would be interested in this particular form of housing. Condos are most popular among two groups; people looking to downsize and live in a low-maintenance community (Currently this group is the Baby Boomers), and young professionals who are just entering the housing market.
Although almost everyone was affected by the economic collapse, these groups of young professionals and Baby Boomers are most relevant in regards to condo growth and development. Over the past few years, following the housing crash, many young professionals were held back financially, whether that meant trouble finding a job, trouble gaining job security, loss in investments, etc. On the same note the Baby Boomers, who were expecting to retire, also had their future affected by job security, loss of investments, etc. Recently, we are seeing indications that these issues are steadily diminishing.
Condo sales are moving up quickly, especially within the last year, due to the increased demand by none other than....That's right, you guessed it...the Baby Boomers & Young Professionals. According to preliminary data issued by the National Association of REALTORS®, condo and co-op sales in July 2013 were up 23% from July 2012. Although some regions posted larger gains than others, there was at least a 20% gain recorded in every region year over year. In the nation, the average price for condos and co-ops was $209,600 in July, which marks an approximate 15-16% increase year over year.
As with anything, when sales & value go up it sparks demand for an increase in production. The National Association of Home Builders refers to an index that measures builder confidence for the sector and the recent reports show a boom in builder optimism during the second quarter of 2013. The focus for builders seems to be high-rise condo complexes. The growing interest in high-rise construction goes hand-in-hand with a slowly recovering housing market for new residential home construction.