Condo Sales On Rise

April 2, 2008

Sales of condominiums and townhomes are picking up. These units are just too popular with a large segment of buyers to be held down long by a general sales slump. "We are definitely emerging from a difficult time and seeing some light in the condo market," said Bill Donges, CEO of Lane Company, a major condominium development firm. "The condo lifestyle, especially in urban areas, is very attractive and with mortgage interest rates low and selection good, we are seeing buyers come back into the market."

The steady and growing sale of condo units in certain markets is also helping the rental apartment market, it was noted by Steve Patterson, an officer with the National Association of Home Builders. "We’ve had fairly strong rental demand for quite some time, but the unsold condos and single-family homes coming back into the market as rentals were hampering the rental apartment sector. With many of those units now selling, the so-called `shadow market’ is starting to dissipate and the multifamily market overall is getting healthier," Patterson said.

At the height of the housing boom, condo construction starts accounted for an unprecedented 45 percent of all multifamily starts annually. When the market rebounds, NAHB expects that percentage to hover between 20 to 30 percent of all annual multifamily starts. "The real difference we’re seeing now is that all our buyers want to live in the condos," said developer Donges. "The speculators are gone, which is a good thing. We’re optimistic that, except for the most overbuilt markets, the worst is behind us."

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