23 Nov The Condo Market Returns
The recession was hard on all real estate, but condos were hit harder than single family homes. They also were slower to catch up on the recovery, but that is finally changing. According to Zillow, condos are appreciating at 5.1 percent annually, outpacing the 3.7 percent rate of single-family homes in the U.S. In fact, for 32 straight months, annual growth in median condo values has exceeded growth in single family home values.
Why is the condo market returning steadily? For one, condos tend to be both more “intown” and more affordable for millennials, who might not be ready to jump right into home ownership with both feet.
Another reason is continued rising rents. Rent grew 3.7 percent as of the end of Q3, according o Zillow. Annual growth in rents has outpaced or equaled annual growth in home values since February 2015.
As far as inventory goes, Zillow also reports that of the nation’s largest 35 metro markets, Atlanta, Austin and Washington, D.C., experienced the biggest increases in inventory over the past year.
The pace of home value growth is predicted to level off a bit in 2016. Condos can represent a strong-performing, often affordable choice, for both first-time homebuyers and empty nesters looking to downsize. The appeal of keeping a low-maintenance urban lifestyle is an important factor in the return of the condo.
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