After a drop in condo sales at the beginning of the epidemic, sales are again soaring. However, it is a new hurdle for first-time purchasers who may have looked at condos as a more reasonable alternative.
Between January and August of 2021, sales were up by 71 percent (approximately). As a result of the COVID-19 epidemic in 2020, many prospective homeowners began looking for larger, detached properties.
Many buyers are turning to more affordable options. However, condos and townhouses are often neglected, as move-in-ready single-family homes reach record-high prices and record-low availability.
People who could work from anywhere have been moving across the country or buying a second house to enjoy holidays near the beach or ski slopes. As a result, sales of condos have soared in the last year. Since last year (2020-2021), the number of condos sold nationwide has doubled.
What Is A Condo?
In real estate, a condo is a housing or residential complex comprising distinct units, each of which belongs to a different person. An individual who leases a condo does so directly from the owner.
Owners of condos are in charge of everything that happens in their apartments, including repairs and upkeep. In addition, they have to pay a monthly condo association fee. These charges go towards the upkeep and the building’s common facilities and amenities.
Condos are Back
Condos, defined as a structure or housing complex where residents may purchase an individual unit or townhouse, were originally heavily struck by the COVID-19 epidemic. Residents of large cities want more space, including a greater separation from their neighbors. As a result, they began looking for single-family residences in the suburbs and even the exurbs. Unfortunately, condo and townhouse demand just was not as high.
While sales of condos, single-family houses, and almost all residential real estate declined during the first few months of the epidemic, condos fared far worse. Condo sales fell 46% in May 2020 compared to the same month a year before. Likewise, single-family house sales fell 32%.
Both forms of the property had a comeback, with condo sales surging in early 2021. By May, condo sales had doubled, considerably outperforming single-family house sales, which increased by 70% during the same period.
Intrigued by this dramatic reversal, we decided to analyze in-depth to see where the condo market is taking off. First, we examined cities with at least 250 condo, co-op, and townhouse listings to arrive at our conclusions. We then determined which ones witnessed the fastest gain in median list price between August 2020 and August 2021.
According to realtor.com, the top 10 places where condo prices are rising are:
- Myrtle Beach, SC
- Destin, FL
- Naples, FL
- Panama City, FL
- Panama City Beach, FL
- North Miami Beach, FL
- Delray Beach, FL
- Las Vegas, NV
- Park City, UT
- Aspen, CO
Myrtle Beach, SC
According to the Coastal Carolinas Association of realtors’ May 2021 real estate market report, single-family house closing sales jumped by 52.3% over May of the previous year.
Although the average selling price of a single-family house has increased by 17%, housing availability has decreased by 67% since last year. However, sales of oceanfront condos in Myrtle Beach are up 151%.
The Grand Strand is increasingly seeing residents flocking there. Uncertain buyers are already making offers on houses. Some people, on the other hand, would rather live in the city than on the shoreline.
Realtors do not anticipate a slowdown shortly. Instead, we expect more sellers to join the market as the weather warms and the economy is recovering.
Because single-family homes are becoming more out of reach for many consumers, they are now looking for a more inexpensive option in the form of condos and townhouses. As a result, sales of homes, whether for primary or secondary use, have risen dramatically in the last year.
There were twice as many condo sales in May as there had been a year earlier. However, in May 2020, condo sales were down 46% from the same month a year earlier. During the first several months of the epidemic, demand for condos dropped precipitously. Instead, single-family houses in suburbia and exurbs grew popular as residents sought more privacy and separation from their neighbors.
It was determined that from August 2020 to August 2021, the cities with the highest median list price rise were those having at least 250 condo, cooperative, and townhouse listings. Also, six Florida coastal communities topped the top 10 list of price rises for condos and townhouses on realtor.com.
Las Vegas, NV
In September, the median price of condos and townhouses sold in the area was $230,000. This is also a record and represents an increase of 17.6 percent from $195,000 in September 2020.
Nationwide, the housing market is beginning to stabilize. The LVR figures indicate that we may be doing the same thing here in Southern Nevada. Prices continue to rise, albeit at a slower pace than in prior months.
As a consequence, we may be returning to the seasonal patterns that existed before the epidemic. Local property prices and sales often peak in the summer, decline somewhat in the autumn and winter, and then resume their upward trend in the spring. Last year’s outbreak shattered this trend.
Local property prices have been increasing at a far higher rate than salaries. This prompted some purchasers to explore more inexpensive alternatives, such as condos, townhomes, and even renting. This is reflected in the revised September median price for condos and townhouses of $230,000.
Pros of Buying A Condo
Property ownership with more facilities, less care, and affordability are all advantages of buying a condo over renting or owning a single-family house. Condos are an excellent option for older citizens who want a low-maintenance property and first-time homebuyers seeking an affordable starting home in the city.
Let us discuss these advantages in detail.
You may be able to use facilities like a swimming pool, dog park, or parking garages if you live on a certain property. Homeowner’s associations (HOAs) often look after these facilities, so you do not have to worry about them.
Those who desire the independence of owning their own house but do not want the maintenance of a single-family property, choose condos. If you want your own house but do not want to deal with mowing the grass, shoveling snow, or fixing the roof, a condo may be a good option for you.
Condos are often less expensive than conventional houses, making them an excellent choice for first-time homebuyers on a tight budget. While condo association expenses must be considered, a condo may be cheaper than a standalone property. If the high cost of entry has kept you from considering homeownership in the past, a condo may be a better option.
Is it Still Worth Investing in Condos in 2021?
Are condos a wise investment amid this pandemic? You must take into account several variables. Additionally, you must study recent condo market movements that COVID-19 impacted.
Consistent Cash Flow and Lower Investment Risk
Because the opportunities for applying this business are boundless, the top condo investments provide consistent cash flow. You may rent them out for household or commercial usage or sell them after a few years to profit from them. All investments include some level of risk. However, condos provide a lower level of risk than other types of investments.
Can be Leveraged
Leverage is a strategy you may use to obtain a prospect. It increases the possible return on investment by leveraging borrowed cash. This is advantageous for you, particularly when real estate prices increase.
Increase of Equity
Condos are often acquired using a loan rather than with cash. The more equity you create in your property, the faster your loan will be paid off. This is a win for the owner both immediately and over time, as the value of the property increases.
As with any long-term investment, such as education or relationships, real estate is an excellent choice for retirement preparations. Unfortunately, this is one of the most ignored but critical stages of the condo purchase process.
Lower Tax Rate
A condo is taxed differently than a home. Additionally, condo developers provide substantial discounts, especially during the pre-selling period. Therefore, scouting at this time is good as a condo investment strategy.
Is it worthwhile now that you are considering purchasing a condo? Definitely, and there are outstanding real estate investment options located around the nation. It would be highly advantageous for you to prepare for the next stage of your life and bolster your security and stability via long-term investments.
Many buyers priced out of the single-family home market have resorted to condos. Earlier in the pandemic, many purchasers avoided tiny condos in favor of spacious detached houses equipped with office space and room for homeschooling.
More space is no longer necessary with most Americans vaccinated and some returning to work, making shared facilities like a gym or a pool more appealing. So maybe the most significant advantage of a condo is its lower cost.