Condos are struggling, and they’re really having a moment in today’s housing market. Let’s talk about what’s going on with volume, supply, and prices. Be sure to read my closing thoughts about housing doom and hot pockets too.
UPCOMING SPEAKING GIGS:
12/5/24 Made 4 More Team (Exporting Data from MLS)
12/11/24 Gateway: Think Like an Appraiser (private)
12/18/24 Coldwell Banker Sierra Oaks
1/15/25 Mike & Joel Event (details TBA)
1/16/25 Sac Real Producers event (details TBA)
1/22/25 Windermere El Dorado Hills / Folsom (private I think)
1/24/25 PCAR Market Update (details TBA)
1/31/25 Prime Real Estate (private)
2/6/25 She Invests event (TBA)
2/11/25 MLS Meeting TBA
2/18/25 Travis Credit Union TBA
3/6/25 Yolo Association YPN Event
3/12/25 Windemere Sierra Oaks
4/8/25 Culbertson and Gray (private I think)
11/4/25 SAR Main Meeting
1) CONDO VOLUME IS THE LOWEST EVER
Condo volume this year has been the lowest on record over the past few decades in Sacramento County. Detached sales are stronger compared to last year, but that’s not the vibe at all with condos. What’s going on? Well, condos have had issues with rising association insurance costs, increasing HOA fees, trouble obtaining financing from lenders, and maybe even some issues with California’s new balcony law. Look, not every condo subdivision is experiencing all of these issues, but there is no mistaking many condos have legitimate headwinds.
2) CONDO HOUSING SUPPLY HAS SPIKED
Condo supply has seen a sharper spike than the rest of the market, and that’s making a difference with housing temperature in some condo neighborhoods.
And here’s a much wider view from Trendgraphix. Do you see the difference between condos and detached units?
3) PRICES ARE STARTING TO DROP
I’ve been noticing downward price pressure in some condo neighborhoods. This doesn’t mean every location is declining, but it’s been pretty clear in some recent appraisals. Check out the visuals below. What do you see? Keep in mind the decline has not been like a 2007 free fall. My advice? If you’re selling, don’t get stuck on the highest prices from 2022 and 2023. Consider properties that are actually getting into contract. Remember, sales are like historic artifacts since they tell us what the market used to be like when these units got into contract. In contrast, actives and pendings tell us what the market is like right now.
CLOSING THOUGHTS: HOT POCKETS & DOOM
I like to say the housing market is like a hot pocket taken out of the microwave too early. The temperature might not be the same everywhere. Some spots are blazing hot, others are lukewarm, and some are frozen. Well, the condo market has been frigid lately, and it’s something we need to keep watching. With that said, I think the temptation for some is to say condos are the leading indicator of doom for the entire market. I get it, but don’t ignore unique issues going on with condos that are not happening with the detached market (trouble obtaining financing and rising insurance costs for the association). I’m not sugarcoating here. I’m just saying we want to be careful about imposing condo vibes on everything else unless that’s what the stats are showing. For reference, condos have been about 6% of all sales this year in Sacramento County.
I hope this was interesting or helpful.
Questions: What have you been seeing happen with condos? What’s happening with prices? Any insight or stories to share? Did I miss anything?
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