The following is from a recent article that Mark Allen, our CEO, wrote for the CIC Midwest Quarterly newsletter publication on the current state of the townhouse-condo market in the Twin Cities. All the data comes from our Housing Supply Outlook. Take it away, Mark:
The Twin Cities condo and townhouse segments are still very much buyer’s markets. As of June, townhomes have 9.1 months of supply available for sale, while condos have 12.5 months of supply. By comparison, the supply of detached homes has fallen to 6.9 months. A 4–6 month supply indicates a balanced market. Current months supply in blue, a year ago in red:
Over the past 12 months, the number of unit sales has increased very slightly by 3.7 percent for townhomes but decreased by 11.3 percent for condos. During this same period, detached home sales have improved 16.4 percent. Home sales from the last twelve months in blue, the prior twelve months in red:
New construction remains the hardest hit segment; sales are down 33.4 percent year-over-year for townhomes and 44.6 percent for condos. Upper bracket home sales are also particularly challenged, with condo and townhouse sales falling at the same rate as detached homes in this price segment.
Surprising to many, lender-mediated (bank-owned, in-foreclosure and short-sale) activity in the condo market is comparatively light. Only 13 percent of condos for sale are lender-mediated as opposed to 29 percent or more in the detached and townhome segments. It is important to note that the historical norm for lender-mediated activity in all three property types is 1–2 percent.
Average price per square foot has fallen across all property types, with detached down 20.4 percent, townhomes down 17.1 percent and condos down 15.6 percent over the past year. The condo category has suffered less due to the lower percentage of lender-mediated activity.