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.