Historically speaking, single-family homes have always appreciated in value faster than condominiums. Houses come with land, which is obviously much more desirable for most homeowners. A lot of single-family homes aren’t subject to HOA fees, rules and restrictions either. Meanwhile, condos typically have smaller square footage and do not include the land.
Seems pretty straightforward, right? Well, maybe not.
A unique trend has emerged in recent years. The online real estate company, Trulia, has been conducting research that shows this is not always the case. Especially when it comes to major metropolitan areas, the prices of condos have been going up at higher rates than single-family homes.
Trulia has studied data from millions of properties in the 100 largest metro areas including San Diego condo values. They looked at numbers from February of 2012 through February of 2017. Over the course of these past five years, the median values of condos have gone up faster than those of traditional single-family detached houses. In fact, median condo prices in the markets researched went up by 38.4% over that time frame, while single-family detached homes only appreciated by 27.9%. That’s quite a significant difference.
San Diego Impact
San Diego was one of the major metropolitan areas studied and this area is clearly one of the markets where this trend has occurred prominently. New York and Detroit show the most extreme jumps in condo values, while other markets such as San Francisco, Atlanta, Seattle, Dallas, Boston and Denver have also shown faster increases in condo values compared to single-family homes.
This trend is primarily just in metropolitan areas where increases in condo development and more desirable property locations make condos more appealing to younger professionals. San Diego is a great example of why this is happening. In smaller metro markets and more rural areas, single-family homes continue to outpace condominiums in median home value growth.
Understanding These Market Trends
You’ll want to take these numbers with a grain of salt. Some housing economists have taken issue with Trulia’s information-gathering approach. Trulia uses an automated home valuation model that provides a price estimate of all homes (those for sale and those not). These numbers do not always line up with true value of homes that actually get sold.
Still, it is an interesting trend to study and follow. San Diego County has so many great condo communities, so we like to stay informed of these kinds of housing trends in this area. At Transparent Mortgage, we always like to keep our finger on the pulse of our local real estate market because it enables us to help our clients make the right mortgage loan and refinancing decisions.
For more information about the San Diego market or to get started on your home loan pre-approval process, contact Transparent Mortgage today at (619) 929-0199.