Condominium sales rebounded in June after taking a massive hit at the start of the coronavirus outbreak in the U.S., reaching a new year-over-year low point in May.
That drop followed a late 2019 surge in condo sales, when the sector was growing at an even faster rate than that of single-family detached homes, CoreLogic reported last week.
“While the pandemic has impacted our views on the desirability of density, it is clear that home buyers have not given up on condominiums,” CoreLogic reported.
Condo sales have rebounded strongly since May, CoreLogic said.
“Interestingly, while condominium sales took a larger dip during the peak of shelter-in-place orders, pending contracts have healthily rebounded to the same rate of annual growth for single-family homes, with both averaging about 17% year-over-year increases in the first two weeks of July,” the report stated.
Meanwhile, new inventory of condos outpaced that of single-family homes in June, the most recent month data is available for. However, active condo inventories leveled off in the same month at about a 13% decrease year-over-year since May, compared to a 30% decrease in active inventory for single-family homes.
CoreLogic said this stabilization of condo inventory reflects the increase in newly available units.
“After dipping to a 50% year-over-year fall during the height of the shutdown, we have seen a rapid growth in new inventory and recorded an 8% increase by mid-July,” CoreLogic said.
The biggest increase in new condo inventory was for luxury units priced at 200% or greater than the median price, up 16% compared to a year ago. Newly listed inventory of condos priced lower than 100% of the median price was up 5%, and new inventory of between 100% and 200% of the median price rose 2% in June.
One reason for the strong sales is that buyers may be getting a better deal with condos than with single-family homes, CoreLogic said. The share of condos that sold below asking price is higher than the rate of single-family detached homes, the report found. Nevertheless, the discount on condos is at the lowest rate it has been in at least the last 2.5 years, showing that condos remain desirable even in the pandemic, CoreLogic said.