Redfin Reports Condo Prices Jump to Record High as Buyers Seek Relative Affordability

Rhea-AI Summary

The typical U.S. condo sold for a record $319,000 in February, marking a 14.6% increase year-over-year and 22.7% from two years ago. This surge is driven by a shortage of single-family homes, with prices reaching $406,000, up 15.9% year-over-year. Condo supply is down 28%, contributing to higher prices and competition. Condos sold significantly faster, with over 55% going off the market within two weeks. However, competition remains lower compared to single-family homes, which still see a higher percentage of bidding wars.

Positive

• Record condo price of $319,000, up 14.6% YoY.
• Condo prices driven by inventory shortage, down 28% YoY.
• Condos sold 13% more than in February 2020.
• Condo sales are faster, with 55.1% selling in two weeks.

Negative

• Condo sales down 5.3% YoY, reflecting a supply issue.
• Only 64.6% of condo offers faced competition, lower than single-family homes.

Demand for single-family homes surged during the pandemic, but it surged so much that condos are now all some homebuyers can afford

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — The typical U.S. condo sold for a record $319,000 in February, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage. That’s up 14.6% from a year earlier and 22.7% from two years earlier, just before the pandemic began.

Condos are in demand partly because they’re a comparatively affordable option amid skyrocketing home prices and rising mortgage rates. Single-family home prices hit a record $406,000 in February, up 15.9% year over year and up 34.9% from two years earlier.

The fact that condos are nearly as hot as single-family homes marks a big shift from the beginning of the pandemic, when remote work and nerves about crowded spaces caused condo sales to plummet a record 48% and prices to drop the most since 2012. Now, with coronavirus cases declining and some Americans returning to the office, condos are an attractive option once again.

“The condo market has bounced back,” said Chance Glover, a Redfin manager in Boston. “People are no longer afraid to live downtown, close to the crowds—and they often prefer it, because they’re close to the office and all the amenities of the city. Rising prices are pushing single-family homes out of reach for a lot of buyers, so condos are affordable in comparison.”

Condo supply is down, pushing up prices

Condo prices have jumped up partly because of the severe inventory shortage and ensuing competition. Condo supply was just shy of a record low in February, down 28% year over year. New condo listings were down 6.1%. Condos are experiencing an even bigger inventory decline than single-family homes, which saw a 14% year-over-year drop and a 2.5% drop in new listings.

The supply shortage held back condo sales, which were down 5.3% year over year, in line with the decline for single-family homes. But condo sales were up 13% from February 2020, while sales of single-family homes were essentially flat over that same period.

Condos are selling two weeks faster than they were a year ago

A record 55.1% of condos went off the market within two weeks in February, up from 47.9% a year earlier. The typical condo that sold in February went under contract in 30 days, 13 days faster than a year earlier. By comparison, 62.1% of single-family homes sold within two weeks (versus 58.2% a year earlier), and the typical single-family home sold in 24 days (seven days faster than a year earlier).

Condos still aren’t as competitive as single-family homes

Nearly two-thirds (64.6%) of condo offers written by Redfin agents faced competition in February, up from 49.3% a year earlier. That’s partly due to the lack of supply, with buyers competing for the few condos on the market. By comparison, 72.9% of offers for single-family homes faced bidding wars.

Meanwhile, 41.1% of condos sold above asking price, up from 24.9% a year earlier—another sign of increasing competition. Houses are still a bit more competitive, with 48.4% of single-family homes selling above list price (up from 38.2% a year earlier).

The typical condo sold for 0.6% above its asking price, near the record 0.7% premium set in June 2021. Last May marked the first time on record the typical condo sold for more than its asking price. The typical single-family home sold for 1.4% above asking price.

To read the full report, including charts and metro-level condo market data, please visit: https://www.redfin.com/news/condo-prices-record-high-february-2022/

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220328005163/en/

Redfin Journalist Services:

Erin Osgood, 206-588-6863

press@redfin.com

Source: Redfin

FAQ

What is the current price of a typical condo in the U.S. as of February?

The typical condo sold for a record $319,000 in February.

How much have condo prices increased in the past year?

Condo prices increased by 14.6% year-over-year.

What factors are driving the demand for condos?

The demand for condos is driven by rising single-family home prices and inventory shortages.

How quickly are condos selling compared to last year?

Condos are selling 13 days faster than last year, with over 55% selling within two weeks.

How does the competition for condos compare to single-family homes?

64.6% of condo offers faced competition, compared to 72.9% for single-family homes.