The Real Deal
Sales of condos strong in quarter
Sales of existing condominiums and cooperatives climbed to a new record in the third quarter of 2001, despite a slowdown after Sept. 11, according to the National Association of Realtors.
Existing condo and co-op sales rose 8.3 percent in the third quarter from the second quarter and were also 8.3 percent above sales activity in the third quarter of 2000.
Dr. David Lereah, the association's chief economist, said condo sales are on track to set a new annual record. "This has been a truly remarkable condo market fed by both first-time buyers as well as baby boomers seeking a simpler lifestyle. Strong household formation and historically low interest rates have created the most favorable market in history for condo and co-op sales," he said. "However, we expect to come off these peak levels in the months ahead due to the slowing economy," he added.
Nationally, the median existing condo price was $123,500 in the third quarter, which is 9.6 percent higher than the same quarter in 2000. The median is the midpoint, which is a typical market price where half of the units sold for more and half sold for less. By comparison, the median-priced existing single-family home was $151,200 in the second quarter, up 6 percent from a year ago. The typical single-family home costs 22.4 percent more than the median-priced condominium.
Overall in Santa Clara County, condo prices were down 3.7 percent with a median price of $320,000, more than double the national median price at $123,500. In certain cities in the county, condo sales tripled from September to October, with Cupertino seeing a 28.8 percent rise in sales with a median price of $470,000. Los Gatos was up 6.05 percent from September with the condo median price at $465,000, and Saratoga also showed an increase of 3.47 percent in October with a median price of $590,000.
In contrast, single family median prices were at $785,000 in Cupertino, $752,500 in Los Gatos and $1,150,000 in Saratoga.
Lereah said the increase in the median condo price is not just a barometer of appreciation. "We have to keep in mind that both inexpensive and luxury condos are selling well, and sales of upper-end units with lots of amenities--the kind most often sought by retirees--are helping to skew the median price higher," he said.
NAR President Martin Edward Jr. said condos are fulfilling a very important role in the overall housing market. "Given the high desire of young people, minorities and immigrants to fulfill the American dream of home ownership, the lower cost of condos is the first step on the ladder of ownership for many first-time home buyers, especially in the more expensive markets," he said. "This is really the beginning of building a family's nest egg, so it's vital to expand programs that assist lower-income buyers for those times in the future when affordability conditions will not be as favorable," he explained.
Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.siliconvalley-realtors.org. Send questions on any topic to jnewton@jnpr.com.
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Saratoga, California Since 1955
