Yesterday’s post about Alaska Air’s condo-booster “article” reminded me of this 2007 piece in the Seattle Times: Condos a bright spot in housing market
The condo market is healthier than the detached-house market, and prices are holding their own. Those are the key findings from an analysis released Friday of the Seattle-area condominium market by Glenn Crellin, director of Washington State University’s Center for Real Estate Research.
…
“Crystal balls in real estate are typically very cloudy and imprecise, but it appears the condominium markets, both resale and new development, should outperform their single-family competition in Greater Seattle, with the possible exception of the high-end market.”
Since peaking at $299,900 in September 2007, King County’s median condo sale price has dropped 35% to $195,000 as of the latest NWMLS data. The single-family median is down 27% from its peak.
Cloudy crystal ball, indeed. You can see my 2007 comments about this piece here.
This part of the article really stuck out to me:
The MLS’ numbers demonstrate condominiums’ importance in providing a solution to the housing-affordability problem.
The median price of condos sold in King County this year is $286,000. That’s 37 percent less than the median for single-family houses, $459,500.
Buyers who purchased at those median prices, making a 10 percent down payment and paying the current 6.63 percent interest rate, would have a $1,649 monthly condo mortgage payment compared with a $2,649 house payment.
The mortgage payment does not include monthly dues for condo owners of several hundred dollars.
The total payment (mortgage + tax + insurance) on my single-family house is $1,250. In what world was $1,649 + $150 (or more) in HOA dues ever considered “a solution to the housing-affordability problem”?
As it turns out, the best (and only real) solution to “the housing-affordability problem” is lower prices. Go figure.