Condos appreciating faster than single-family homes

Last month, the National Association of Realtors ("NAR") reported that condominiums are appreciating faster than single-family homes. NAR President Al Mansell, said the reputation of condos as an investment has changed dramatically. "In much of the 1980s and early 90s, condos earned a reputation for slow price growth, in many cases because there was an oversupply on the market," he said. "With the maturation of this market segment, condos have been appreciating faster than single-family homes for the last four years. In the past, affordability was a bigger factor in condo sales – now, lifestyle choices have emerged as a driving force in their growing popularity."

"Lifestyle choices" are what condominium associations are all about. Some people purchase a condominium unit because they chose a lifestyle where someone else maintains and repairs their home. Other people purchase a condominium unit because they chose a lifestyle where amenities are available to residents that would not be available to them if they lived outside a community association. Still other people purchase a condominium unit because they chose a lifestyle where they can rely on residents to abide by a shared set of rules and aesthetic appearance.

NAR's pricing information is consistent with polling data. A 1999 Gallup poll showed that community association members were happy with their associations. The poll showed that 75% of association members were either extremely satisfied or very satisfied with their association. Another 20% were somewhat satisfied with their association. Not surprisingly, almost the same percentages thought their association was extremely, very and somewhat responsive. The poll also showed that 42% of community association members would not consider selling their home under any circumstances. Another 36% would consider selling at 15% above market value. While a condominium lifestyle choice is not for everyone, it is clear that they are translating into the bottom line for condominium owners.