What do you get when you combine low interest rates with eager first-time homebuyers faced with ever-increasing home prices and retirees looking for convenient and affordable homes? A surge in condominium sales.
The National Association of Realtors recently reported that sales in 2002 rose 10.5 percent above what had been the record in 2001 when there were 824,000 sales of existing condos and co-ops.
What's more, condos are appreciating faster than single-family homes, making condos a good option for first-time buyers who would like to build equity and then buy a single-family home in the next several years.
"The condo market is very strong and somewhat affordable. Appreciation in this sector is rapid and as a buyer this is a good place to look," said San Diego real estate agent Jason Lopez. "You can expect to gain valuable equity over the next two years ..."
For all of 2002, the median existing condo price was $137,100, up 11.3 percent from a median of $123,200 in 2001. At the same time, the typical single-family resale price rose 7.1 percent to $158,300.
By definition, when you buy a condominium, you're buying all the space contained within the walls. The condo unit may be in the form of a townhouse, apartment flat, or even a detached structure. The exterior of the building, the landscaping, surrounding roads and driveways, and common areas are all owned by an association - a group made up of all the unit owners.
Condo sales are growing stronger and faster than single-family homes, according to the NAR.
NAR President Cathy Whatley said there is a common denominator behind the increase in the number of sales.
"The rising tide that is floating all boats in the housing market is the historically affordable level of mortgage interest rates," she said. "In addition, the condo market is flourishing because both ends of the housing market - first-time buyers and retirees - are drawn by a combination of lifestyle and affordability considerations."
Lereah said there are several factors in the median condo price rising faster than historic norms.
"First, the record demand has been placing pressure on condo prices. In addition, there is a short supply of available units, notably in the West and South," he said. "We've also seen a growing popularity of upper-end units that appeal to retiring baby-boomers, and more luxury units have been built in recent years. The higher mix of more expensive units being sold accounts for some of the rise in the median condo price."
But it's not just the West and South that are experiencing a rise in sales.
The Rhode Island Association of Realtors reports that condo sales there increased by almost 21 percent in 2002.
Some of the things you should think about if you're considering a condo include: