- March 21, 2023
If you are a condominium owner, there’s a bright side to all the doom and gloom over the state of the housing market. So say the researchers behind a study that found condominium prices have been falling at a slower rate than the prices for single-family homes.
The study, from the real estate search portal Point2, found that condo prices nationally fell by 4.4% since May while single-family homes prices fell 8.6%.
Like with much economic news, Florida was a bit of an outlier. Pricing in the state followed the national trend but the dip wasn’t as dramatic. And, in fact, condo prices rose rather than fell in two of the state’s biggest cities.
Point2 reports that single-family home prices dropped in four of Florida’s largest cities, with the biggest drop coming in Jacksonville where prices fell 5%. Tampa, Orlando and St. Petersburg all saw a 3% drop.
In the condo market, prices fell in three of Florida’s five largest cities, with units in Miami taking the biggest hit with a 13% drop. In Orlando, prices fell 5% and in Jacksonville 1%.
But the study found that condo prices actually went up in Tampa, jumping 40% from an average of $257,500 to $360,000. That was the second biggest increase in the nation behind Oklahoma City's whopping 79% increase — $110,000 to $196,750.
Prices for condominiums in St. Petersburg rose 9% from $240,000 to $262,500.
Overall, condo prices dropped in 65 of the country’s 100 largest cities while single family home prices fell in 88 cities.
The reason for this, the report’s authors write, is that the pandemic led to a spike in single-family home pricing as people looked for more space and switched to remote work creating greater demand for inventory.
“But, what goes up must come down,” the authors write, saying single-family home prices that “shot into the stratosphere” because of the high demand are now undergoing a dramatic price correction. The slowdown in demand is the direct effect of rising interest rates to slow down inflation which have helped crater pending home and existing home sales.
The Point2 study says the same factors didn’t affect the condominium market as much. “After demand for space drove house prices to historic highs, making them totally unattainable, homebuyers started shifting their attention toward the more affordable option — condos.”