Almost everyone these days seems to be looking for a larger house, a first home, a vacation property—or maybe simply a new location in a more affordable section of the nation. At the very least, people are fantasizing about these things. However, with so many keen buyers and a scarcity of available housing, many people are presented with some tough real estate options.
Due to record-high prices for move-in-ready single-family homes—and record-low inventory—many buyers are turning to their less expensive, sometimes neglected cousins: condos and townhouses. Over the last year, sales of these apartments have soared as individuals who can work from anywhere relocated across the nation or purchased a second house to enjoy during holidays near the beach or ski slopes. According to a Realtor.com® review of home sales data, there were twice as many condominiums sold nationwide in May 2021 than there were in May 2020.
However, where are they at their most sizzling? The Realtor.com analytics team set out to determine which regions in the United States are seeing the fastest growth in condo and townhouse prices.
Condos seem to be becoming an increasingly popular Plan B to purchasers’ original, possibly more ambitious, house designs.
“There is just a national housing shortage,” says Brad O’Connor, chief economist for Florida Realtors®. “People are unable to get their desired single-family house with a white picket fence.”
These less costly housing options enable purchasers on a limited budget to acquire property and create equity that may ultimately be utilized to purchase a single-family house. And, of course, some people prefer them over free-standing houses because to their conveniences—such as the ability to delegate outside upkeep responsibilities. (No more leaf raking and winter shoveling!) Additionally, they enable purchasers to purchase property in more expensive, normally exclusive resort communities near the slopes or the seaside.
As a result of the COVID-19 outbreak, condos were originally struck badly. Urban dwellers want greater space, especially distance from their neighbors. So they scoured the suburbs and even the exurbs for single-family houses. Condos and townhouses were less popular.
While sales of condominiums, single-family houses, and almost all residential real estate declined during the first few of months of the epidemic, condos fared far worse. Condo sales fell 46% in May 2020 compared to the same month a year before. (Single-family house sales fell 32%.)
After that, the story changed.
For all forms of property, there was a resurgence in early 2021, with condo sales soaring as a result. Sales of condos had increased by more than twice as much as those of single-family homes by the end of May.
As a result of this dramatic shift, we decided to take a closer look at the condo market. A total of 250 condo, co-op, and townhouse listings were analyzed in order to arrive at the results that we have. Using this information, we were able to determine which ones had the biggest median list price rise from August 2020 to August 2021.
Which condo markets have seen the greatest increases in prices? Here are some of the most notable developments.
People in the colder, higher-taxed parts of the United States discovered there was nothing keeping them from relocating south when most of the nation closed down in spring 2020. In the end, a sunny state with no income tax, reduced house costs, and a lot of space to socialize on the beach seems better than a frigid winter in the North.. Right?
The price of condos and townhouses in six coastal Florida communities topped our top 10 list of the fastest-growing cities. Destin, Panama City, Naples, Panama City Beach, Florida, North Miami Beach, and Delray Beach were the top five fastest-growing cities in the United States during the last decade (17 percent ).
Since so many Southerners live nearby, the northern panhandle of Florida is home to three of these popular tourist destinations.
New Yorkers are saying, ‘If I have to be quarantined, I’d rather be in Florida than New York,'” Brad Hunter, the CEO of Hunter Housing Economics and a market strategist, tells the New York Times.
And a large number of people are making long-term moves. Real estate expert Jack McCabe, CEO of Jack McCabe Expert Services, claims that hundreds of individuals a day are coming to Florida, particularly from the Northeast.
The fact that a number of businesses have relocated to Florida is also helpful. A growing space and drone business near the Kennedy Space Center on Merritt Island has prompted Goldman Sachs to create an office in West Palm Beach.
Jobs from the Northeast and new, high-tech roles that pay well are being brought to Florida from the Northeast, according to McCabe. At least for the next ten years, I believe Florida will be the fastest-growing state in the country.
Buyers are increasingly wary buying condominiums in older buildings after the catastrophic collapse of the almost 40-year-old Champlain Towers condominium complex near Miami in May, according to McCabe. But newer condominiums in buildings that meet the most up-to-date safety standards have grown in value as a result.
Those who elected to remain in Panama City after Hurricane Michael may have placed pressure on condo prices since they needed somewhere to stay while their houses were being renovated.
Condos and townhouses aren’t cheap in Destin, the city’s most affluent neighborhood. According to Realtor.com statistics, they had a median list price of $694,050 in August. But that’s a fraction of the price of a single-family house in the city, which may cost up to $1.5 million.
Panama City, Naples, Panama Beach, and North Miami Beach all had median condo/townhouse list prices of $395,570, $425,050, and $515,000, respectively.)
Because of a lack of inventory, “we won’t be able to develop as quickly as before,” says Spears.
Condo sales in Spears’s neighborhood are expected to continue to rise in the next year, but they may be hindered by a dramatic decline in the number of properties for sale. Destin’s condo inventory dropped from 306 in the first half of 2020 to just 160 units during the same period in 2021.
During the three-month closure of Destin’s beach in 2020, “it was like the floodgates opened,” a real estate agent with the Spears Group in Destin tells the New York Times.