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April 06, 2006
Follow the condos
When Doug Duncan, chief economist of the Mortgage Bankers Association, wants to get a forward peek at housing prices he looks at condos. “A higher share of them are discretionary purchases,” Duncan notes. “They’re second homes and investor properties.” That means owners don’t need to buy them or need to keep them like they do primary residences. Duncan says he started noticing a slowdown in condo price appreciation last summer. The market really turned in October and November. Condo sales fell 1.5% to 850,000 units in February. The median price was $214,300, up 3.5% from February 2005. Single-family home sales, by comparison, were off just 0.2% from their 6 million-unit pace of February 2005. The median home price was $208,500, up a still-strong 11.6% from a year ago. Duncan isn’t forecasting any kind of market collapse, just a “return to normalcy” which he says means price appreciation averaging 6% a year for homes. That appreciation might be less though for units in the Los Angeles building in the picture. A two-bedroom, two-bath condo there is selling for $890,000.
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Follow the condos for a peek at where the rest of the housing market is going? from AI Podcasts
Follow the condos
According to this article, if you follow the money trail of condos you may be able to predict where the overall housing market is going. Interesting read…may have to ... [Read More]
Tracked on April 7, 2006 08:52 PM
I have always liked to do opposite of what "the herd" is doing. We bought our Scottsdale condo 4 years ago when Scottsdale was cheap.
Now that many second home condo areas are overbuilt and the herd has left, I believe that in the next year or so we will see LOTS of opportunity to buy nice stuff in nice places.
I am keeping my eye on Hawaii which was WAAAAAY over run!
Just watch....when the units that speculators bought are completed...they will be running for the doors. I will be there with a smile and my check book.
Posted by: David Porter at April 7, 2006 03:36 PM
It's also easier to compare prices of condos because, as SocketSite's Adam Koval likes to point out, two units in the same building selling at different prices are the most precise reflection there is of what's happening in a market.
Posted by: Glenn Kelman at January 11, 2007 06:23 PM