Your condo experience may vary
1) Up
2) Down
3) Flat
Answer: Yes.
CondoAuthority.com analyzed condo sales on Metropolitan Regional Information Systems' multiple-listing service and found prices moving every which way, depending on location and type of condo.
The site, looking at sales of all condo types through July of this year vs. sales in all of 2007, says prices were up in Harford County, essentially flat in Baltimore City and down in Anne Arundel, Baltimore and Howard counties. Anne Arundel's drop was the largest, at almost 7 percent, while Harford's sales price rose 4 percent. (Carroll was not included because its condo market is so tiny.)
CondoAuthority says its numbers account for the effect of seller concessions such as closing-cost help to buyers.
Smaller condos -- two bedrooms or fewer -- showed price drops across the region, as it happens. Sales prices rose for larger ones in Baltimore City, Baltimore County and Harford County. In its analysis, CondoAuthority says: "We expected lower priced units to hold up in price better than larger and more expensive units due to the general affordability factor, but this has not been the case. One explanation may be that buyers of larger condos/coops may be less affected by tightening lending standards than the buyers of smaller and less expensive units."
I chatted with Jamie Test, managing partner of CondoAuthority, who said he expected to see bigger price drops. "It just didn't seem like that much," he says. "If this is as bad as it's going to get -- prices are down a few percentage points after going up 100 percent -- that's not that bad."
The site compiles information for buyers about new condos in the Baltimore and Washington regions, though of course this analysis of MRIS numbers is predominantly catching resales.
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Comments
The condo market in the Baltimore Metropolitan area is small, and therefore, the influence of new product (most of which is not reported in MRIS) on the numbers and trends has to be considered. The Baltimore City numbers don't reflect 414 Water Street and will soon only reflect some of the Ritz closings. Silo Point will skew the trend too.
The closing cost help is a first time buyer's dream come true. They typically buy the lower priced condos which have about the same inventory as last year but with just over half as many buyers. So taking net numbers reflecting this incentive makes sense but the incentives were not always reported in the past.
I am not sure where The Condo Authority draws the line between small/less expensive units and larger/more expensive units but those seeking nonconforming mortgages since the meltdown in April '07 had to pay considerable more for the same amount of money. Buyers buy the monthly cost of ownership, therefore they were adversely affected. A better explanation would be that at least in Baltimore City MRIS activity there is not a critical mass. We have averaged only a little over one condo sale a month over $700,000 this year.
Posted by: Ross | August 7, 2008 2:02 PM