From Boston: Median prices of downtown condos jumped up 10.2% over last year, led by two June sales of condos — not houses, mind you — of over $12 million each.
From Miami: Average sales volumes of downtown condos rose 35.2% over the past year, with nearly three-quarters of the transactions being all cash. On the high end, World Property Channel reports that there are now four listings — three on Fisher Island, one on Ocean Drive — being marketed at $3,000 per square foot. And the New York Times noted today that “Miami is gripped by a housing mania as the oversupply of distressed homes dries up and foreigners and investors swoon.”
From Brooklyn: One out of every four homes sold were condos, according to data from Miller Samuel, an appraisal firm. Sales of condos were up 76.4% over a year ago. And real estate trade magazine The Real Deal reports that at one of the fancier developments, One Brooklyn Bridge Park, add-on “cabanas” — small rooftop spaces with BBQing rights — are now selling at $150,000 or more a pop.
Are luxury condos back? The considered answer is, “not quite.”
Nationally, the median price of condos rose 1.8% from last year, clocking in at $182,300 in June, according to the National Association of Realtors. That’s especially good news since last year’s comparisons probably got a boost from the first-time homebuyer tax credit. But like most real estate stats, there are actually two markets.
Folks in D.C. (where condo prices dropped 2.4% year-over-year, on low volume) or Chicago (where prices slipped by 23% in the spring, compared to last year) aren’t necessarily feeling good about their condo markets at the moment.
Now I realize that most people actually own single-family homes, but I think that condo markets can often be a good indicator of the climate in the broader real estate markets.
And the reason for the current dual nature of the market, I think, is financing. Lending is tight, so if you want to buy a condo, you have to make sure that the building meets standards for percentage of units sold, financial reserve funds, and insurance. Those requirements have been in place for years, but it seems lately I’m hearing more complaints about those requirements being tightly enforced.
As a result, we have two pools of condo buyers: those who need mortgage financing (and simply aren’t buying) and those who don’t need mortgage financing (and seem to be jumping into the markets, especially at higher price points.)
Developers seem to be setting their sights (or is that sites?) on the latter pool. (Another case in point: a proposed 60-unit doorman development in previously industrial East Newark, N.J.) It’s an open question, of course, whether the wealth of all-cash sales will trickle back through the broader economy. Brokers, I’d be interested in hearing your comments on your local markets.