Condo/co-op sales shatter quarterly record

Existing condominium and cooperative sales set a record in the second quarter with buyers continuing to respond to historically low mortgage interest rates, according to the National Association of Realtors.

The seasonally adjusted annual rate for existing condo and co-op sales was 861,000 units in the second quarter, up 4 percent from the first-quarter rate of 828,000 the third highest on record. Sales activity in the second quarter was 4.7 percent above the 822,000-unit sales level during the same period in 2002. The previous record was an 829,000-unit rate in the fourth quarter of 2002.

David Lereah, NAR's chief economist, said in an Aug. 5 release that the market is on track for another record year.

"The pace of condo sales during the first half of this year is unprecedented and we should easily set an annual record for 2003," he said. "In fact, this will be the eighth consecutive year in which condo and co-op sales set a record, with low interest rates stimulating all sectors of the market. Even with mortgage interest rates rising over the last few weeks, they remain very attractive and coincide with a strong underlying demand for housing."

NAR President Cathy Whatley, owner of Buck & Buck Inc. in Jacksonville, Fla., said condo prices are continuing to experience strong appreciation and are rising at double the rate of single-family homes. "For the last few years condo prices have been rising faster than single-family homes," she said.

"While some of the rise results from a higher number of more luxurious units in the sale mix, demand alone is accounting for much of the price increase."

The median existing condo price during the second quarter was $163,500, which is 15.1 percent higher than in the same quarter in 2002. The median is a typical market price where half of the units sold for more and half sold for less. By comparison, the median price of an existing single-family home was $168,900 in the second quarter, up 7.4 percent from a year earlier.

In the West, condo/co-op resale activity surged 16 percent from the first quarter to a record annual rate of 232,000 units in the second quarter, and was 4.5 percent above the sales rate during the second quarter of 2002. The median condo price in the West was $211,300 in the second quarter, up 22.8 percent from a year earlier.

In the South, the existing condo and co-op sales pace rose 3.2 percent in the second quarter to a 386,000-unit pace; this was 4 percent higher than the same quarter in 2002. The second-quarter median price in the South was $131,500, which was 17.2 percent higher than a year ago.

Existing condo and co-op sales in the Midwest were at a seasonally adjusted annual pace of 101,000 units in the second quarter, down 3.8 percent from a record in the first quarter, but were 7.4 percent above the same period last year. The median resale condo price in the Midwest was $158,900, up 6.3 percent from the second quarter of 2002.

In the Northeast, condo/co-op resale activity dropped 4.1 percent from a record in the first quarter to a 142,000-unit pace in the second quarter, but was 5.2 percent above the second quarter of 2002. The median price in the Northeast was $177,600 in the second quarter, up 21.6 percent from a year ago.

The National Association of Realtors began tracking the condo/co-op market in 1981.