Millennials Could Prompt Condo Resurgence
The average sale price of condominiums in 2019 was 16% lower than the average sale price of single-family residences, according to data from CoreLogic based on 25 of the largest housing markets. Those lower condo prices could make them a growing draw for millennials and first-time home buyers, CoreLogic reports.
Millennails could be driven “toward buying condos because they tend to be more affordable than single-family homes and because condos typically come with a lower maintenance burden and are mostly located in urban cores,” CoreLogic notes in its report.
About 40% of all condo purchase mortgage applications last year were from first-time home buyers, compared to 33% of all non-condo purchase mortgage applications by this same buyer segment, CoreLogic reports. Further, 47% of all condo purchase mortgage applications were from millennials in 2019, up 2% from 2018.
Downsizing baby boomers are also showing an increasing draw to condos, the report notes.
The following five states saw the highest condo share of sales in 2019:
- Hawaii: 46%
- Washington, D.C.: 42%
- Massachusetts: 20%
- Florida: 18%
- Illinois: 17%
By the metro level, Austin, Texas, had the largest annual increase in condo sales in 2019 with a 12% increase.
“Given worsening affordability challenges in many markets, condos could be a viable option for many,” CoreLogic reports. “In the coming years, younger millennials (age 30 or below) are likely to drive much of the condo demand as they are a very large group. Still, there will be more condo demand than supply as young millennials approach peak household formation and home-buying age.”
However, the condo supply remains tight. The inventory for condos plunged to four months in December 2019, which was the lowest level since 2006.