Mixed Report for National Condo Prices

A fourth quarter 2007 report from the National Association of Realtors has some bright spots for multi-family developers, as well as some news that is not so good.The NAR report looked at 59 metro areas in its survey of condo and cooperative prices. The good news is that 33 metro areas showed annual increases in prices, including four locations that had double-digit increases. The bad news is that 26 areas had price declines, including four places that saw double-digit price drops. The national median existing condominium price was $221,000 in the fourth quarter of 2007, nearly the same as $221,200 at the end of 2006. Bismarck, N.D., saw the biggest fourth quarter increase, with the median price rising 20.8 percent to $125,000 at the end of 2007. The New Orleans area, which also includes Metairie and Kenner, La., also saw price jumps. That’s good news for the region hit so hard nearly three years ago by Hurricane Katrina. The NAR reports that the median price of a condo in the New Orleans metro area rose 17.8 percent to $173,300 from the end of 2006 to the end of 2007. Knoxville, Tenn., also saw double-digit growth. The report noted that median condo prices in Knoxville were up 10.6 percent to $160,800 compared to Q4 2006. “The healthiest housing markets today generally are moderately priced and are experiencing job growth and often population growth, which in turn is supporting strong price growth,” Lawrence Yun, chief economist for the NAR, stated in a news release. “Most of the weakest markets have either experienced both job and population losses, or they are experiencing corrections following a prolonged period of rapid price growth.” Three areas that saw double-digit drops in overheated markets were Tucson, Ariz., where the fourth quarter 2007 price decrease was 19.8 percent; Cape Coral/Fort Myers, Fla., where the price decrease was 26 percent; and Las Vegas/Paradise, Nev., where the median condo prices at the end of 2007 had dropped 10.3 percent from year-end 2006, according to the NAR numbers. Austin, Texas, is an area that saw steady growth from year to year. The NAR reported the median condo price in the fourth quarter of 2007 was $173,200, up 7.6 percent from $160,900 at the end of 2006. That’s no surprise to Paul Perez, operations manager for the Live Well Team, part of Prudential Texas Realty in Austin. Perez said Austin benefits from being the state capital of Texas, and the location of the University of Texas’ Austin campus. “We’re not as affected as other markets (by the economy),” Perez said today, noting that prices for condos in Austin rose steadily rather than skyrocketing as they did in some metro markets across the United States in recent years. “Texans aren’t’ going to pay an exorbitant amount and density isn’t a problem here as it in New York or California.” Perez said there are condos for every price point in Austin, noting his firm just sold a one-bedroom condo in Downtown Austin last week for $145,000 but also has listings for luxury developments. One property his firm is marketing is Star Riverside, a lakefront development where prices start in the $600,000 range.