Is the Condominium Market Headed for a Tumble?
November 2, 2020
In September 2020, home sales across Virginia were up dramatically and the statewide median home sales price increased at a double-digit rate compared to a year ago. Despite the strength of the market, the recovery is beginning to play out differently in the single-family and condominium markets.
While home sales data suggest that the single-family market is on fire, there may be early signs of a slowdown in the condominium market. New housing market data show that sales of both single-family homes and condominiums were up strongly in September. Statewide, there was a total of 11,509 single-family home sales in September, up 29% compared to a year ago. There were 1,837 condominium sales, a 31% increase over September 2019.
Pending sales of both single-family homes and condominiums were up in September compared to a year ago; however, new pendings fell slightly between August and September.
The key difference in the single-family and condominium markets is on the inventory side. At the end of September, the number of single-family active listings was down 42.3% compared to a year ago and down 1.4% compared to the end of August. By contrast, condominium inventory was down just 4.9% compared to a year ago. The inventory of condominiums statewide increased between August and September.
Sellers have slowly been returning to the market over the summer. However, there has been a rush of new condominium listings. The number of new single-family listings in September was up 9.8% in September, while new condo listings were up 36.2%. In September, there was just 2.0 months of supply of both single-family homes and condominiums. The months of supply of single-family homes has fallen much more dramatically than has the months of supply of condominiums.
Prices of both single-family homes and condominiums rose at double-digit rates compared to a year ago. According to forecasts from the National Association of REALTORS, the 2020 median home price nationally will be up between one and three percent compared to 2019. Year-to-date, single-family home prices in Virginia are up 5.5%, and condominium prices are up 5.8%. However, as condominium inventories rise this fall, it is possible that condominium price growth will slow during the remainder of the year.
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