The condo sector has experienced lackluster growth in sales and development the last few years, but it may finally be seeing a turnaround in markets across the country.
Condo sales are showing signs of strengthening as demand picks up from Baby Boomers and young professionals. Sales of condo and co-op units were up 23 percent in July from a year ago, according to preliminary data from the National Association of REALTORS®. All regions were recording at least a 20 percent year-over-year growth. The Midwest and South have seen some of the largest gains. The median sales price for condos and co-ops was $209,600 in July—a 15.5 percent increase from a year earlier.
High-rise condo building may be poised for a lift nationwide. New development is moving forward in urban residential centers and popping up in smaller cities as well, Investors Business Daily reports. For example, a wave of Latin American cash is financing a new condo boom in the Miami area.
The National Association of Home Builders reports that condo developer optimism skyrocketed in the second quarter, reaching its brightest outlook in eight years, according to an index the measures builder sentiment for the sector. A growing interest in high-rise condo construction coincides with a slowly recovering market for new homes, experts note.
Still, financing condo construction remains an obstacle for many developers. Developers may need to show that their projects also work as rentals when they are seeking approval for a loan, says Mark Humphreys, CEO of Humphreys & Partners Architects, based in Dallas.
Source: “Condo Towers May Go Up With U.S. Housing Recovery,” Investors Business Daily (Sept. 5, 2013)