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A Tale of 2 Markets: Amid Price Drops, Condos Hold Up Better Than Single Family Homes

Condo prices are much more resistant to price contractions than single family home prices, showing that homebuyers are moving away from increasingly unaffordable houses and opting for the more budget-friendly alternative — condos.

by Andra Hopulele
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  • Compared to their spring price peak, condo prices only contracted by 4.4%. However, single family home prices decreased by 8.6% nationally.
  • Condo prices decreased in 65 of the 100 largest U.S. cities, while single family home prices fell in 88 markets.
  • If price contraction patterns point to stronger demand in the condo market, then so do the price increases: Condo prices grew in 33 large cities, whereas single family home prices continued their upward trend in only 10 markets.
  • Condo prices in Oklahoma City, OK jumped 79% since May, but the biggest increase in single family home prices was a much weaker 11% in Tulsa, OK.

When the pandemic forced everyone to cram their entire life inside their homes, spacious, single family homes (preferably with a backyard) became a must. Consequently, homebuyers went into a real house hunting frenzy, jumpstarting a period of bitter bidding wars and rapidly escalating asking prices.

But, what goes up must come down: Now, single family home prices that shot into the stratosphere are currently undergoing a dramatic price correction. But the same is not true for condos. After demand for space drove house prices to historic highs, making them totally unattainable, homebuyers started shifting their attention toward the more affordable option — condos.

As a result, the trend that is becoming increasingly evident is that house prices are falling almost twice as fast as condo prices. In fact, the evolution of single family home and condo prices in the 100 largest U.S. cities shows that increasing demand for condos makes prices in this segment hold up much better than single family home prices.

 

 

House Prices Drop 8.6% Y-o-Y, While Condo Prices Only Decrease 4.4%

Currently, the average house spends 15 more days on the market this year than last year. The average condo only added nine more days than last year.

House prices decreased in 88 of the 100 largest U.S. cities, with Irving, TX leading the way with a -22% decline in just a few months. Toledo, OH followed suit, with a similar drop. Likewise, in 10 other cities, house prices contracted between -15% and -20% compared to their spring peaks.

Condo prices, on the other hand, only decreased in 65 of the 100 largest U.S. cities. And, while the markets where prices kept growing were fewer, the price increases were much more spectacular: The most significant condo price increase was recorded in Oklahoma City, OK, at 79%. For comparison, the largest house price increase was a much more subdued 11% in Tulsa, OK.

The current trend reversal is a direct result of houses — especially big houses — dominating the mindset of buyers all throughout the nation for two whole years during the pandemic. The need for space was felt so acutely during lockdown that renters and even existing homeowners were extremely determined to find more spacious homes to accommodate their new lifestyle.

And, more than just determined, buyers were also willing and able to pay increasingly more for more space. When interest rates were hovering around 3% (although sustained demand pushed prices higher and higher) buyers still had the courage to take the plunge.

But increasing interest rates were the straw that broke the buyers' back, forcing them to take into consideration the more affordable alternative. Those who still wanted to make the move to homeownership were now choosing condos over houses.

 

Since Spring Peak, Condo Prices Declined in Only 65 Cities, but Single Family Home Prices Fell in 88 Large Cities

The largest condo price drop was Stockton's -29%, while the biggest single family home price drop was Irving's -22%.

After their spring peak, prices started decreasing, revealing the new market conditions: While the pandemic may have dictated the race for space that fueled the buying frenzy of 2020 and 2021, new mortgage rates are dictating a shift in preferences.

When it comes to condo prices, the decreases were far less generalized than single family home price drops, but slightly more consistent, with the top 10 steepest decreases ranging between -15% and -29%. For instance, in Stockton, CA (the city with the biggest drop) condo prices fell from $252,500 in May to $180,000 in October. Plus, condo prices contracted more than 20% in four other cities: Raleigh, NC; New Orleans, LA; Omaha, NE; and Glendale, AZ —  which saw condo price drop -21% to -25%.

 

 

Zooming in on the cities with the most significant single family home price contractions, some of them displayed dramatic differences: The median single family home price in Irving, TX went from $450,000 in May to $353,000 in October following a -22% contraction. Further North, Toledo, OH experienced a similar contraction — but here, house prices dropped from nearly $125,000 to $100,000. Our analysis also revealed 10 other large cities where house prices fell between 15% and 18%.

Record-low mortgage rates, remote work and the need for more space fueled the pandemic's housing boom. But now, record-high rates and inflation — coupled with historic-high prices and market volatility — are all forcing a real cool down in America's largest housing markets.

 

Price Increases Point to Same Trend of Growing Demand for Condos

In Oklahoma City, OK, condo prices jumped an astounding 79% since May. At the same time, the biggest price increase for single family homes was a meager 11% in Tulsa, OK.

The price correction that started to ripple through the market in the spring engulfed most large cities. Even so, both condo prices and single family home prices kept rising in some markets. And if the generalized price contractions make sense given the current economic conditions, the cities and markets where prices adamantly continue to grow are quite the outliers.

That said, even price increases follow the same two-speed market pattern: Condo prices are growing faster, thereby supporting the idea that demand for condos is outstripping demand for single family homes.

 

 

Condo prices kept rising in 33 of the 100 largest cities, whereas single family home prices only continued their upward trajectory in 10 cities. Additionally, while single family home prices barely went up more than 10% in just one large city, condos recorded price jumps of up to 80%.

And the state that stands out in this category was Oklahoma. In particular, Tulsa experienced the biggest price increases for single family homes of all of the cities in the analysis, and Oklahoma City recorded the sharpest spike in  condo prices. Plus, these numbers were all the more spectacular because home prices are generally on a descending slope.

These numbers also align with what real estate agents in the area have to say about Tulsa's housing market:

"A lot of people from California are selling their homes and they've got that in equity and they're coming here and paying cash for these homes and not having any debt. There's so much growth coming into Texas, that it's actually pushing them out of Texas and they're looking at properties to move to Oklahoma because they can't stand what's happening to their state. The price of everything they have is all going up, so those people are being flushed out of those cities and they're coming to Tulsa because they're looking at the opportunities we have here."

Aside from Oklahoma City, condo prices increased by more than 10% in nine other markets, with Tampa, FL trailing Oklahoma City with an impressive growth of its own: Condo prices in Tampa went up 40% — from a median of $257,500 in May to $360,000 less than half a year later.

Looking at single family home prices, the increases were more modest. Aside from Tulsa, only nine other cities recorded price growth.

Both the price increases and especially the price contractions swiping the housing market show that buyers aren't giving up on their homeownership dreams, but merely adjusting them to fit the new, harsher market conditions. Although the need for more space is still buyers' main driver, affordability concerns are starting to take precedence. Because of the rising mortgage rates, single family homes are becoming increasingly unaffordable for homebuyers across the nation, making condos the next best thing.

Below is all of the data used in the study. Use the filters to rank the 100 largest U.S cities based on the variable that interests you.

Evolution of Single Family Home and Condo Prices [May-October 2022]

City, StateMedian Price SF Home MayMedian Price SF Home October% Change SF PriceMedian Price Condo MayMedian Price Condo October% Change Condo Price
Tulsa, OK $235,000 $260,500 11% $102,000 $108,000 6%
Lubbock, TX $235,000 $244,000 4% $122,450 $122,000 0%
Albuquerque, NM $310,000 $320,000 3% $220,000 $227,000 3%
Miami, FL $560,500 $577,500 3% $510,000 $445,000 -13%
Lexington-Fayette, KY $310,000 $317,500 2% $197,500 $182,500 -8%
Fort Wayne, IN $186,002 $190,000 2% $219,950 $222,450 1%
Laredo, TX $192,000 $196,000 2% $144,000 $146,000 1%
Detroit, MI $76,000 $77,500 2% $288,000 $272,500 -5%
Corpus Christi, TX $213,000 2160001% $219,000 $229,000 5%
St. Louis, MO $215,000 $218,000 1% $190,000 $174,500 -8%
Milwaukee, WI $190,000 $190,000 0% $208,800 $236,500 13%
New York, NY $720,000 $720,000 0% $788,000 $710,000 -10%
Newark, NJ $337,500 $335,000 -1% $322,500 $297,000 -8%
Arlington, VA $1,185,000 $1,171,000 -1% $410,000 $396,000 -3%
Bakersfield, CA $405,500 $400,000 -1% $190,000 $212,000 12%
Colorado Springs, CO $494,000 $484,000 -2% $303,000 $302,000 0%
Wichita, KS $225,000 $220,000 -2% $155,250 $145,000 -7%
Norfolk, VA $285,000 $277,700 -3% $255,500 $223,500 -13%
Omaha, NE $262,500 $255,000 -3% $248,000 $195,900 -21%
Buffalo, NY $232,000 $225,000 -3% $186,000 $208,000 12%
Baltimore, MD $315,000 $305,000 -3% $223,250 $225,000 1%
St. Petersburg, FL $412,750 $399,000 -3% $240,000 $262,500 9%
Orlando, FL $410,000 $396,250 -3% $215,000 $205,000 -5%
Winston-Salem, NC $272,900 $263,500 -3% $136,000 $146,000 7%
Atlanta, GA $575,000 $555,000 -3% $315,000 $318,000 1%
Tampa, FL $430,000 $415,000 -3% $257,500 $360,000 40%
Fresno, CA $400,000 $385,000 -4% $189,000 $160,500 -15%
Charlotte, NC $428,750 $412,408 -4% $273,000 $285,000 4%
Lincoln, NE $280,900 $270,000 -4% $266,000 $248,990 -6%
Richmond, VA $365,000 $350,000 -4% $310,000 $262,500 -15%
El Paso, TX $240,000 $230,000 -4% $143,750 $145,000 1%
Virginia Beach, VA $417,900 $399,500 -4% $283,500 $275,000 -3%
Madison, WI $400,000 $381,700 -5% $235,000 $230,000 -2%
Washington, DC, DC $1,299,000 $1,239,000 -5% $477,000 $469,000 -2%
Tucson, AZ $355,000 $338,000 -5% $195,000 $175,000 -10%
Arlington, TX $357,650 $340,000 -5% $185,500 $179,638 -3%
Henderson, NV $545,000 $517,000 -5% $272,495 $280,000 3%
Jacksonville, FL $345,000 $326,950 -5% $215,000 $213,500 -1%
Greensboro, NC $272,500 $256,500 -6% $147,000 $155,000 5%
Stockton, CA $455,000 $428,000 -6% $252,500 $180,000 -29%
Fort Worth, TX $371,000 $348,900 -6% $206,000 $221,000 7%
Raleigh, NC $480,000 $451,000 -6% $318,750 $238,750 -25%
Philadelphia, PA $400,000 $375,000 -6% $365,000 $325,000 -11%
Oklahoma City, OK $266,990 $250,000 -6% $110,000 $196,750 79%
Glendale, AZ $460,000 $430,000 -7% $221,000 $175,000 -21%
Santa Ana, CA $895,000 $835,000 -7% $437,000 $451,250 3%
Indianapolis, IN $252,000 $235,000 -7% $195,000 $199,000 2%
Jersey City, NJ $547,000 $510,000 -7% $600,000 $635,000 6%
Denver, CO $700,000 $649,950 -7% $400,000 $338,500 -15%
San Antonio, TX $305,375 $283,370 -7% $150,000 $193,900 29%
Chicago, IL $329,500 $305,000 -7% $352,500 $320,250 -9%
Scottsdale, AZ $1,080,000 $998,300 -8% $425,000 $409,500 -4%
Irvine, CA $1,805,000 $1,665,400 -8% $1,150,000 $1,000,000 -13%
Riverside, CA $645,000 $592,500 -8% $403,500 $375,000 -7%
Cincinnati, OH $255,000 $234,000 -8% $220,000 $181,500 -18%
Mesa, AZ $520,000 $477,000 -8% $307,500 $260,000 -15%
Aurora, CO $555,500 $508,500 -8% $320,000 $304,200 -5%
Nashville-Davidson, TN $500,000 $457,500 -9% $503,750 $574,770 14%
Anchorage, AK $440,500 $400,000 -9% $242,500 $244,950 1%
Minneapolis, MN $370,000 $335,000 -9% $230,000 $250,000 9%
Garland, TX $342,250 $309,000 -10% $177,000 $180,000 2%
Las Vegas, NV $475,000 $428,500 -10% $250,000 $231,000 -8%
Phoenix, AZ $505,000 $455,000 -10% $331,000 $305,000 -8%
North Las Vegas, NV $450,000 $405,000 -10% $260,000 $227,000 -13%
Long Beach, CA $940,000 $845,000 -10% $495,000 $479,000 -3%
Kansas City, MO $295,000 $265,000 -10% $217,500 $213,500 -2%
Sacramento, CA $530,000 $475,000 -10% $364,000 $307,000 -16%
Houston, TX $363,763 $325,000 -11% $175,250 $158,000 -10%
Anaheim, CA $932,500 $830,000 -11% $700,000 $625,000 -11%
Enterprise, NV $528,500 $470,000 -11% $275,000 $265,000 -4%
Durham, NC $450,000 $400,000 -11% $270,500 $225,500 -17%
Oakland, CA $1,165,000 $1,035,000 -11% $647,500 $525,000 -19%
Pittsburgh, PA $253,900 $225,000 -11% $236,000 $218,500 -7%
Portland, OR $639,000 $565,000 -12% $388,500 $358,000 -8%
Spokane, WA $421,563 $372,450 -12% $299,000 $289,000 -3%
Columbus, OH $301,500 $265,000 -12% $235,000 $226,000 -4%
Gilbert, AZ $630,000 $553,250 -12% $382,500 $371,000 -3%
Reno, NV $625,000 $547,999 -12% $255,000 $250,000 -2%
New Orleans, LA $370,950 $325,000 -12% $350,000 $270,000 -23%
Chandler, AZ $605,000 $530,000 -12% $355,000 $315,000 -11%
Memphis, TN $197,500 $173,000 -12% $210,000 $200,000 -5%
St. Paul, MN $300,500 $262,500 -13% $225,000 $212,450 -6%
Seattle, WA $1,105,365 $965,000 -13% $540,000 $482,500 -11%
Urban Honolulu, HI $1,400,000 $1,220,000 -13% $470,000 $480,000 2%
Boston, MA $845,000 $735,000 -13% $735,000 $699,450 -5%
Cleveland, OH $126,500 $110,000 -13% $171,101 $192,300 12%
Chula Vista, CA $897,500 $780,000 -13% $610,000 $557,500 -9%
Chesapeake, VA $450,000 $390,000 -13% $250,000 $277,950 11%
Boise, ID $585,000 $499,900 -15% $449,950 $430,000 -4%
San Diego, CA $1,216,000 $1,037,500 -15% $660,500 $588,000 -11%
Plano, TX $585,000 $497,500 -15% $262,500 $237,450 -10%
Louisville, KY $290,000 $245,000 -16% $144,000 $164,750 14%
San Jose, CA $1,695,500 $1,430,000 -16% $732,500 $682,500 -7%
Dallas, TX $560,000 $471,000 -16% $280,000 $275,000 -2%
Austin, TX $720,000 $600,000 -17% $497,350 $417,500 -16%
Fremont, CA $1,734,500 $1,437,500 -17% $680,000 $717,500 6%
San Francisco, CA $1,953,000 $1,605,000 -18% $1,200,000 $1,182,500 -1%
Los Angeles, CA $1,300,000 $1,065,500 -18% $708,000 $650,000 -8%
Toledo, OH $124,700 $100,000 -20% $107,500 $113,000 5%
Irving, TX $450,000 $353,000 -22% $265,000 $241,250 -9%

 

 

Methodology

  • For this study, we analyzed condo prices and single family home prices in the 100 largest U.S. cities.
  • We looked at condo and single family home prices from May (the last month of price increases before prices started contracting) and condo and single family home prices from October (the most recent available pricing data).
  • We then analyzed the price evolution for condos and single family homes in the 100 largest U.S. cities to discover the differences in price contractions and price increases.
  • Price data was sourced from Redfin.com, Zillow and other local MLSs and brokerages.

Fair Use

We encourage and freely grant you permission to reuse, host, or repost the story in this article. When doing so, we only ask that you kindly attribute the authors by linking to Point2Homes.com or this page so that your readers can learn more about this project, the research behind it and its methodology.

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