Millennials Could Prompt Condo Resurgence
Millennials Could Prompt Condo Resurgence
The average sale price of condominiums in 2019 was 16% lower than the average sale price of single-family residences, according to data from CoreLogic based on 25 of the largest housing markets. Those lower condo prices could make them a growing draw for millennials and first-time home buyers, CoreLogic reports.
Millennails could be driven “toward buying condos because they tend to be more affordable than single-family homes and because condos typically come with a lower maintenance burden and are mostly located in urban cores,” CoreLogic notes in its report.
About 40% of all condo purchase mortgage applications last year were from first-time home buyers, compared to 33% of all non-condo purchase mortgage applications by this same buyer segment, CoreLogic reports. Further, 47% of all condo purchase mortgage applications were from millennials in 2019, up 2% from 2018.
Downsizing baby boomers are also showing an increasing draw to condos, the report notes.
The following five states saw the highest condo share of sales in 2019:
- Hawaii: 46%
- Washington, D.C.: 42%
- Massachusetts: 20%
- Florida: 18%
- Illinois: 17%
By metro level, Austin, Texas, had the largest annual increase in condo sales in 2019 with a 12% increase.
“Given worsening affordability challenges in many markets, condos could be a viable option for many,” CoreLogic reports. “In the coming years, younger millennials (age 30 or below) are likely to drive much of the condo demand as they are a very large group. Still, there will be more condo demand than supply as young millennials approach peak household formation and home buying age.”
However, condo supply remains tight. The inventory for condos plunged to four months in December 2019, which was the lowest level since 2006.
Source:
©National Association of REALTORS®
Reprinted with permission
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