Condos are holding their value in markets across the US
Since peaking in the spring, condominium prices have fallen 4.4% nationally, while single-family prices fell 8.6%.
- According to a new report, Oklahoma City had the biggest jump in condo prices between May and October.
- New higher-end units, affordable prices and local amenities may explain the growth in Oklahoma City.
- Sun Belt cities in Florida and Texas also saw rising condo prices.
As the residential real estate market continues to settle, a new study finds that condominium prices are dropping less quickly than single-family prices.
Since peaking in the spring, condo prices have fallen 4.4% nationally while single-family home prices have dropped at nearly twice that rate according to research done by Point2. The company looked at prices in the 100 largest U.S. cities, analyzing data from Redfin, Zillow and local MLSs and brokerages. Prices dropped in a majority of cities, but fewer cities experienced a decline in condo prices (65 out of 100) compared to single-family prices, which fell in 88 of the cities.
At the metro level, several U.S. cities posted significant increases in condominium prices between May and October, shrugging off rising mortgage rates. Oklahoma City topped the list, with the median price for condos jumping from $110,000 in May to $196,750 in October — a 79% increase. During that same period, single-family prices fell by 6% in the city.
Tampa (up 40%) and San Antonio (up 29%) were next on the list of areas with the biggest jump in condo prices between May and October, while single-family prices dropped by 3% and 7%, respectively. Sun Belt cities, and Florida metros in particular, have seen an influx of buyers over the past couple of years, driving up prices.
Cities with declines in condo prices spanned the country, with Stockton (down 29%) experiencing the biggest drop, followed by Raleigh (down 25%) and New Orleans (down 23%).
Not just oil and cows — OKC has gone cosmopolitan
While surprised by how much condominium prices in her city had jumped, RE/MAX Preferred agent Heather Davis said several factors contributed to condos' rising popularity.
Oklahoma City previously had a shortage of condominium units, but development has picked up recently. Many were built in the downtown core — which is trending more toward a mixed-use area — and have been listed at higher price points, Davis said.
The city also didn't see the rapid rise in home prices that some other areas of the country experienced during the pandemic, so home prices are more affordable. Davis said that's led to a nice demographic mix, from boomers looking for a second home with less maintenance, to millennials who can work remotely and are finding a growing restaurant and art scene to go along with prices they can afford.
Another trend she's noticed is people moving to the area to be closer to family.
"It's all coming together," Davis said. "What we're hearing is that Oklahoma City is just catching up and they don't feel like [prices are] going back down that much."
According to Redfin, Oklahoma City is currently a competitive real estate market, with many homes getting multiple offers. Based on search data from September through November, prospective buyers from Dallas, Los Angeles, San Francisco and San Diego were most interested in relocating to Oklahoma City.
Davis, who has lived in Oklahoma most of her life, said the city is going through changes that have given a boost to the housing market.
"We were for so long… known as a city that lived and died by the oil market," Davis said. When there were layoffs in the oil industry several years ago, it didn't impact the real estate market as much as past downturns. "That's when we knew we were really diversified enough that we are going to be OK."
With a wider variety of job options, more people are taking a fresh look at the area and finding desirable amenities like museums, art and restaurants that popular metros like Austin and Atlanta are known for.
"They can come here and get the fullness of that on a smaller scale," Davis said.