New Home Sales: Condo Prices Drop

The new home sales data from April showed condo sales vault back to life but at the expense of their prices. Meanwhile, single family home sales continued to improve over last year’s poor results, with even prices improving month to month for the first time since November, though they remain down from last year.

new condo sales aprilSource: BILD – Altus, Six Housing Sense

As the graph shows, condo sales had a great month by any standard for April. After months of historically low sales, the condo market bounced back to life closing in on the sales total of 2017. This marks only the second month in the last year and a half where condos achieved a year-over-year improvement. If these April results can continue through the rest of the spring and into the second half of the year, 2019 has the chance to offer a true bounce back in terms of sales.

new single family sales maySource: BILD – Altus, Six Housing Sense

Single-family homes did not have the same success that condos experienced. Sales were up over 2018 levels, though they continued to fall well short of the ten-year average. Compared to 2018, new single-family home sales have doubled year-over-year; however, in comparison to any year from 2014 to 2017 sales remain down by roughly half, if not more.

new home prices maySource: BILD – Altus, Six Housing Sense

The real numbers to follow from April’s new home sales report are the prices. Single-family homes can breathe a small sigh of relief as prices did improve marginally over March, growing from $1,116,640 to $1,119,772. That month over month gain ended a four-month trend of decreasing monthly prices; however, it still represents a 3% price drop from April 2018, and a drop of nearly $200,000 from peak prices in 2017.

Although condo sales were strong in April, prices were not. Condo prices saw their largest ever month to month price drop, falling from $780,839 down to $758,585. Year-over-year new condo prices remain up 2.5%; however, prices have decreased almost $50,000 from their peak price in January. If new condo prices do not gain in May, prices will slip into the negative next month. This price drop, coupled with resale condos’ continued price growth, did close the price gap between the new and resale markets. In March new condos were selling for 50% more than the resale market. That number has now fallen to 43% with April’s price drop.

The new homes market experienced a sales revival in April, which was positive news for the industry, though it did appear to come at the expense of condo prices. A month to month price drop of 3% is significant and positions the industry to have both single-family and condo prices down year-over-year next month. As sales remain below their 10-year average and with prices decreasing, the new homes industry seems to still be struggling.

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