Condos are Back - and Outpacing Single-Family Homes in Appreciation

Increasing rents, limited inventory of low-value homes, and the popularity of urban life have prompted runaway condo-value appreciation in many housing markets

- Condo values were hit harder than single-family homes during the recession, and lagged in the recovery, but now they are appreciating more quickly than houses.

- Condos are appreciating at 5.1 percent annually, outpacing the 3.7 percent rate of single-family homes in the U.S.

- Condo values in Denver, San Jose and other hot tech markets where home values have been rising rapidly are appreciating exceptionally fast.

News provided by

Zillow

Oct 27, 2015, 12:42 ET

SEATTLE, Oct. 27, 2015 /PRNewswire/ -- Condos are appreciating faster than single-family homes in markets across the U.S., especially where job markets are thriving or urban renewal is underway, according to the third quarter Zillow® September Real Estate Market Reportⁱ. Condos in the U.S. are appreciating at a rate of 5.1 percent, compared to the 3.7 percent appreciation among single-family homes.

Condo values crashed hard during the housing bust that kicked off the Great Recession. From the pre-recession peak to the lowest value, the median U.S. single-family home lost 20 percent of its value; from peak to bottom, the typical U.S. condo lost 33.2 percent of its value.

The housing market has since bounced back, and condos have finally caught up to other homes. In September, according to Zillow's data, they are appreciating faster than single-family homes in nearly two-thirds of the top 35 most populated housing markets.

Condo values outpaced house values the most in the New York City metro area, in Dallas and Houston, and in Boston and Denver.

In Denver – one of the country's fastest-growing housing markets – condo values are growing in value at an annual rate of just under 20 percent, while single-family home values are rising at 15.9 percent.

"The housing bust hit condo values hard, and over the past few years, buying a condo wasn't always considered a good investment compared to a single family home," said Zillow Chief Economist Dr. Svenja Gudell. "But that's changing, and condos increasingly represent a strong-performing, often affordable choice, particularly for first-time buyers interested both in homeownership and in keeping a lower-maintenance, city lifestyle. However, as younger buyers compete for homes in urban neighborhoods, it's important to consider some of the additional costs of condo life, especially homeowner association fees, when weighing options."

In Philadelphia, a market where many renters say they want to buy, single-family homes dropped slightly in value year-over-year, but condos are growing at 2.3 percent.

But in Miami, where luxury condos have spread across the skyline and condos make up 63 percent of the housing stock, condo values are not rising quite as fast as single-family homes.

Metro Area	Condo ZHVIⁱⁱ	YoY change in condo ZHVI	Single-family home ZHVI	YoY change in single-family home ZHVI	ZRIⁱⁱⁱ	ZRI YoY change
United States	$191,300	5.1%	$181,500	3.7%	$1,386	3.7%
New York-Northern New Jersey	$505,900	8.3%	$371,100	1.1%	$2,405	4.1%
Los Angeles, CA	$439,800	-0.2%	$579,100	5.6%	$2,529	4.1%
Chicago, IL	$160,500	2.8%	$201,700	1.2%	$1,645	0.5%
Dallas-Fort Worth, TX	$137,300	20.1%	$174,200	14.9%	$1,502	5.1%
Philadelphia, PA	$118,200	2.3%	$226,800	-0.4%	$1,585	2.0%
Houston, TX	$108,900	13.6%	$170,000	9.0%	$1,570	5.8%
Washington, DC	$295,200	0.2%	$394,100	-0.9%	$2,113	1.8%
Miami-Fort Lauderdale, FL	$150,700	8.5%	$279,500	8.8%	$1,810	2.5%
Atlanta, GA	$143,600	8.7%	$166,000	5.4%	$1,302	5.7%
Boston, MA	$304,400	8.8%	$398,000	4.9%	$2,271	6.8%
San Francisco, CA	$575,200	13.5%	$805,300	12.0%	$3,348	13.3%
Detroit, MI	$150,200	6.9%	$114,700	6.2%	$1,124	5.8%
Riverside, CA	$227,700	3.0%	$300,200	5.7%	$1,699	3.3%
Phoenix, AZ	$136,500	6.8%	$222,300	6.9%	$1,277	5.3%
Seattle, WA	$275,800	10.5%	$376,400	8.0%	$1,936	7.7%
Minneapolis-St Paul, MN	$153,300	4.8%	$224,100	3.2%	$1,529	1.7%
San Diego, CA	$357,200	6.4%	$523,300	5.5%	$2,347	3.8%
St. Louis, MO	$122,400	6.3%	$140,600	6.8%	$1,159	5.0%
Tampa, FL	$101,000	8.8%	$168,200	7.5%	$1,311	4.5%
Baltimore, MD	$187,500	-2.3%	$246,200	-1.7%	$1,728	2.2%
Denver, CO	$200,700	19.7%	$338,600	15.9%	$1,964	11.5%
Pittsburgh, PA	$130,000	3.3%	$124,900	1.4%	$1,103	-3.8%
Charlotte, NC	$139,800	3.6%	$159,300	4.0%	$1,226	5.1%
Sacramento, CA	$205,800	7.5%	$343,700	6.1%	$1,676	6.6%
San Antonio, TX	$111,400	7.8%	$161,200	6.4%	$1,356	4.0%
Orlando, FL	$98,600	7.5%	$190,400	6.2%	$1,351	3.5%
Cincinnati, OH	$98,000	1.3%	$142,900	2.6%	$1,257	5.1%
Cleveland, OH	$91,400	5.9%	$127,500	2.8%	$1,166	1.1%
Las Vegas, NV	$112,700	9.3%	$214,000	7.4%	$1,226	3.5%
Columbus, OH	$104,200	4.0%	$159,400	5.3%	$1,290	3.4%
Indianapolis, IN	$108,800	2.0%	$130,000	3.7%	$1,189	1.7%
San Jose, CA	$637,000	13.0%	$984,800	12.9%	$3,422	9.1%
Austin, TX	$211,100	8.2%	$246,300	9.9%	$1,720	5.2%

Zillow
Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG), and headquartered in Seattle.

Zillow and Zestimate are registered trademarks of Zillow, Inc.

ⁱ The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow's Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder's office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/local-info/ and www.zillow.com/research/data.

ⁱⁱ The Zillow Home Value Index (ZHVI) is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted.

ⁱⁱⁱ The Zillow Rent Index (ZRI) is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow's database, regardless of whether they are currently listed for rent. It is expressed in dollars.

SOURCE Zillow