Condos Dipped in Popularity During the Pandemic — Here’s Why They’re Having a Major Comeback
In the early days of the coronavirus pandemic, condos fell out of favor. Buyers wanted space — and lots of it. Privacy, too. Unsure of if and when they’d be returning to the office, they scoured the sizzling hot market looking for detached, single-family homes with enough square footage to accommodate their new hunkered-down-at-home lifestyles.
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Now, as more people are vaccinated and offices reopen, Redfin’s chief economist, Daryl Fairweather, says all the extra space that came at a premium in 2020 is no longer as necessary. The benefits of shared amenities like a gym or a pool are more attractive to some buyers. Plus, Fairweather adds, many buyers have been priced out of the market for single-family homes and are now turning to more affordable condos.
It’s official: The condo has staged a comeback.
The average condo in the U.S. sold above its asking price in June for just the second time since at least 2012, according to a Redfin study. The first time was in May, hinting at renewed homebuyer competition for condos after a pandemic-fueled slump. Across the country, the typical condo in June sold for $304,000, and about 0.7 percent above its asking price. Condos are also selling after just 22 days on the market, which is down from 43 days a year earlier, according to Redfin.
“The shortage of homes on the market during the pandemic has really given a boost to condominiums,” says Jason Gelios, a Michigan-based real estate agent and author of “Think Like a Realtor.”
For context, a condo is similar to an apartment in that an owner occupies a unit attached to others, Gelios says. A townhome is more of a cross between a single-family home and a condo, with many having multiple floors.
During the homebuying frenzy of 2020, condos lagged. The median sale price of single-family homes surged 15.5 percent year over year in October 2020, outpacing the condo market’s 9.9 percent growth, according to Redfin. But some real estate agents say the appeal of condos never seemed to fade in their markets — and that they’ve appealed to a range of buyers, from first-time homebuyers to retirees.
“The majority of my clients looking for a condo tend to be those who want to have a carefree lifestyle,” says Ashley Melton, an agent based in Charleston, South Carolina. “They don’t want to be strapped down with a lot of lawn care and exterior maintenance. They want to be able to travel without the worry of finding someone to take care of things while they are away.”
Plus, Melton says, condos often come with amenities like the ones you’d find in apartment buildings, including swimming pools and tennis courts. Some even have community gardens and dog parks.
One of the downsides of condo ownership, though, is the possibility of a special assessment popping up. This fee comes on top of homeowner’s association dues, and funds projects when there’s not enough money in the association’s reserve account.
“A client looking to purchase a condo needs to look at the rules and regulations as well as the budget to see if the reserves are healthy,” Melton says.
If you’re hopping on the condo comeback train, it’s also good to know which projects have been completed in recent years — and if any are scheduled for the near future, Melton says. This way, you can get a good gauge of what special assessment fees might be around the corner.