Condo sales hit new record

Sales of existing condominiums and cooperatives climbed to a new record in the third quarter of 2001, despite a post-Sept. 11 slowdown, according to the National Association of Realtors.
Existing condo and co-op sales rose 8.3 percent to a seasonally adjusted annual rate of 780,000 units in the third quarter from a 720,000-unit pace in the second quarter. It was also 8.3 percent above the 720,000-unit level of sales activity in the third quarter 2000. The previous record was a 742,000-unit annual rate in the first quarter of this year.
Dr. David Lereah, NAR's chief economist, said condo sales are on track to set a new annual record.

"This has been a truly remarkable condo market fed by both first-time buyers as well as baby boomers seeking a simpler lifestyle, Lereah said.

Strong household formation and historically low interest rates have created the most favorable market in history for condo and co-op sales.

"However, we expect to come off these peak levels in the months ahead due to the slowing economy.
According to Freddie Mac, the average commitment rate on a 30-year conventional fixed-rate mortgage was 6.97 percent in the third quarter, down from 7.13 percent in the second quarter; it was 8.03 percent in the third quarter of 2000.

"Right now, mortgage interest rates have declined even further and are now below 6.5 percent," Lereah said.
NAR president Martin Edwards Jr. said condos are fulfilling an important role in the overall housing market.

"Given the high desire of young people, minorities and immigrants to fulfill the American dream of homeownership, the lower cost of condos is the first step on the ladder of ownership for many first-time home buyers, especially in the more expensive markets," he said. "This is really the beginning of building a family's nest egg, so it's vital to expand programs that assist lower-income buyers for those times in the future when affordability conditions will not be as favorable.
The median existing condo price was $123,500 in the third quarter, which is 9.6 percent higher than the same quarter in 2000. By comparison, the median-priced existing single-family home was $151,200 in the second quarter, up 6 percent from a year ago. The typical single-family home costs 22.4 percent more than the median-priced condominium.
Lereah said the increase in the median condo price is not just a barometer of appreciation. "We have to keep in mind that both inexpensive and luxury condos are selling well, and sales of upper-end units with lots of amenities the kind most often sought by retirees - are helping to skew the median price higher," he said.
In the West, the sales pace of condos and co-ops jumped 12.3 percent from the second quarter to an annual rate of 210,000 units in the third quarter; it was 2.9 percent above the sales rate during the third quarter of 2000. The median price in the West was $141,500, up 4.4 percent from a year earlier.
In the South, condo/co-op resale activity rose 8.8 percent in the third quarter to a 357,000-unit pace; this was 12.3 percent higher than the same quarter in 2000. The median price in the South was $99,200, which was 12.3 percent higher than a year ago.
In the Northeast, condo/co-op resales increased 6 percent between the second and third quarters to a 123,000-unit pace; they were 5.1 percent above the third quarter of 2000. The median price in the Northeast was $124,900, up 10.3 percent from a year ago.
Existing condo and co-op sales in the Midwest rose 1.1 percent from the second quarter to a level of 90,000 units in the third quarter, and were 9.8 percent above the third quarter of 2000. The median resale condo price in the Midwest was $133,300, up 7.9 percent from a year ago.

Rusco Co., a Tennessee general partnership, financed $1.3 million through Enterprise National Bank, securing the loan with 15.5 acres known as the first addition of Pinnacle Point subdivision, according to a trust deed filed in the Shelby County Register's Office Nov. 8. This is a construction and development loan, according to the deed.