Interesting post by Scott.
Condos party like it’s 1989
Condos haven’t sizzled like this since the crazy condo boom of the 1980s.
OK, I took a little liberty with the headline. After all, by 1989 the great 80s condo boom had already started to go bust, but you get the point.
Condo prices are on a tear, rising 18.4 percent during the first two months of 2014 compared to last year, reports The Warren Group, publisher of Banker & Tradesman.
Even stranger still, condo prices have almost caught up with home values, which they traditionally lag by a considerable margin.
The median sale price for a condo in Massachusetts this February topped $281,000, just $4,000 below the median home price of $285,500, Warren Group numbers show.
So what’s going on here?
Well, for starters, the relentless decline in listings of homes for sale is doing more than just driving up Boston-area prices.
It also appears to be pushing some buyers into the condo market in search of affordable alternatives.
Of course, as more buyers switch to condos, that’s now having the unfortunate effect of driving up condo prices as well,
But we are also likely seeing the impact of empty-nesters moving into the condo market as well.
Remember all those Baby Boomers who wanted to downsize a few years ago, but couldn’t sell their homes? Well now they are finally making their move.
However, instead of buying another home, they are going condo
And, of course, let’s not forget all those luxury condos that are selling like hotcakes in downtown Boston – and skewing the median price upward.
“The 18.4 percent increase in condo median prices so far this year is an indicator that condominiums are increasingly popular and we have a strong mix of luxury condos in the sales totals,” said Tim Warren, chief executive of The Warren Group, in a statement.
“Empty-nesters are ready for a change in lifestyle and have the net worth to take the plunge,” he said.