Have you noticed all of the new condo projects that have and continue to spring up all over the city? You are not the only one, I have been studying this trend for the last few years. For the month of August 2016 it has been discovered that the condo market has come down. Condo values have come down 2.74% year to date for 2016. In 2015 condo values have come down nearly 12%, that brings us to a total of nearly 15%. Should you be concerned? In short, yes.
This time last year, residential detached houses in the range of $250,000 to $299,999 accounted for 26% of the market, today that number has dropped to 24%. So what does that have to do with condos? I believe that the saturation of condos, especially the new ones, has impacted the first time house buyers market share in a good way. More buyers have and continue to buy outside that range of $250-$300k. I have noticed that the slightly higher price ranges have increased due to the saturation of real estate over-all. In the previous two years, many first time buyers were pushed into buying a condo instead of a house. Condos were cheaper and the demand for them was less. No bidding on condos to be found and many buyers went that route instead of a house. That opened up opportunities for first time house buyers this year. Today because of the over supply of condos on the market, there is some uncertainty and less urgency of buyers to buy. Those buyers are sitting on the sidelines and creating opportunity for house buyers to capitalize on the opportunity. Keep in mind that 11% of the entire residential market is made up of condo transactions; it’s not a big market share in comparison to the house market shares.
Last year and the year before that, the people who couldn’t afford to even compete in bidding in the $250-$300k range were forced to focus on lesser houses. Now those similar buyers can afford to buy in the higher price ranges of $300-$350k because those houses are siting on the market longer and being fetched up for less than their respective original list prices. Houses in the $400-750k ranges have very small single digit market shares. When you see that that gives you an idea of where the action is. Because these houses are not selling fast or even well for that matter, it can give a negative impression to the the buyers in the larger market shares. In summary, thank you to the saturation of the condo market, the average house buyer can afford more house.
We are approaching the ideal house buying season of winter. Do you want to beat the odds, buy more house than the average buyer? Connect with myself at 204-228-0588 firstname.lastname@example.org. I will give you the advice and the insight that others cannot afford to give.