Tuesday, September 18, 2012

Condo median prices up again in August with five months in a row of growth

The median price for condos and townhomes in the metro Denver area increased 17 percent, year over year, in August 2012. According to home price information for condos and townhomes, released by the Colorado Association of Realtors, the median price in the region rose to $148,687 from August 2011's median price of $126,865. Statewide, the median price also rose 17 percent, rising from August 2011's price of $129,329 to August 2012's price of $151,848. In the Pikes Peak region, the median price rose only 0.5 percent to $132,361 during August, rising from August 2011's price of $132,285. (The monthly median prices discussed in this article are 3-month moving averages.)

As can be seen in the first graph, the larger trend is one in which condo prices continue to be down from peak levels reached back in 2006. Unlike single-family prices which quickly fell in 2009 and then immediately rebounded somewhat, condo prices have seen a long slide over the past several years and have only recently begun to move up again. The largest decline is seen in the statewide condo prices, and this is likely due to large dropoffs in prices for condo found in several mountain communities.However, we seen fairly large increases in  statewide the median prices since May 2012. 

As expected, the data shows that prices in condos and townhomes are significantly lower than single-family home prices.  In recent months, the statewide median price had fallen below that found in both metro Denver and in the Pikes Peak region, but surged in March and April and remains above the other regions. 

The second graph shows year over year changes in median home prices for condos and townhomes. August 2012 was the fifth month in a row to experience year-over-year increases in the median condo price. Growth has been weaker in the pikes peak region than in metro Denver or statewide, although all three regions have begun to show the most sustained growth trend experienced since before the 2008 financial crisis. As noted in the article on condo sales closings, low interest rates are having a significant impact on overall demand, and this demand would be impacted by any substantial increase in rates.