Sales of existing condominiums and cooperatives set a sixth consecutive annual record in 2001, although sales eased in the fourth quarter from an all-time high in the third quarter, according to the National Association of Realtors.

Condo and co-op resales totaled 738,000 in 2001, up 3.8 percent from the previous record of 711,000 sales recorded in 2000.

The seasonally adjusted annual rate* for existing condo and co-op sales was 717,000 units in the fourth quarter of 2001, down 8.0 percent from a record 779,000-unit rate in third quarter. Sales activity in the fourth quarter was 0.6 percent below the 721,000-unit sales level during the same period 2000; even so, it was the sixth highest on record.

NAR President Martin Edwards Jr. said the condo market has been exceptionally strong over the last few years. "Favorable affordability conditions for both first-time buyers and retirees have driven demand that has been nothing short of remarkable," he said. "In addition, the elimination of the capital gains tax penalty for most homeowners in 1997 means existing owners have been free to make housing choices based on their needs and desires rather than an artificial tax consequence. Lifestyle choices are playing a larger role now in the condo market as some homeowners trade down to easier-to-maintain but high-quality condos."

David Lereah, NAR's chief economist, said a dip was expected in condo sales for the fourth quarter. "There was an unprecedented surge of condo and co-op sales in the third quarter that would have been very difficult to sustain, but fourth-quarter sales activity was still among the highest on record," he said. "With the favorable affordability conditions expected to continue in an improving economy, we're looking for very strong condo sales again this year, although we may be down somewhat from last year's record."

The median existing condo price for 2001 was $122,600, up 9.7 percent from $111,800 in 2000. During the fourth quarter, the typical condo price was $125,000, which is 9.8 percent higher than the same quarter in 2000. The median is the midpoint, which is a typical market price where half of the units sold for more and half sold for less. By comparison, the median-priced existing single-family home was $148,000 in the fourth quarter, which is 18.4 percent higher than the typical condo price.

Regionally, existing condo and co-op sales in the Midwest were at a record 88,000 units last year, up 7.3 percent from 2000. The seasonally-adjusted sales pace slipped 3.4 percent from the third quarter to a level of 86,000 units in the fourth quarter, but were 8.9 percent above the same period in 2000. The fourth quarter median resale condo price in the Midwest was $136,400, up 7.6 percent from a year ago.

In the Northeast, condo/co-op resales rose 5.3 percent to a record 120,000 units in 2001. Sales activity declined 4.1 percent to a 118,000-unit pace between the third and fourth quarters but was 2.6 percent above the fourth quarter of 2000. The median price in the Northeast was $125,600 in the fourth quarter, up 11.2 percent from a year ago.

In the South, existing condos and co-op sales set a record of 335,000 units last year, up 6.4 percent from 2000. The sales pace fell 7.3 percent in the fourth quarter to a 331,000-unit pace; this was 0.9 percent higher than the same quarter in 2000. The fourth-quarter median price in the South was $99,600, which was 14.5 percent higher than a year ago.

In the West, condo/co-op resales slipped 2.5 percent to 195,000 units in 2001, second only to a record 200,000 units in 2000. Sales activity dropped 13.3 percent from the third quarter to an annual rate of 182,000 units in the fourth quarter but was 8.5 percent lower than the sales rate during the fourth quarter of 2000. The median price in the West during the fourth quarter was $146,000, up 6.2 percent from a year earlier.

Published: February 4, 2002

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