Demand for condos and townhomes spiked at the start of this year, but why?

Serving Families across San Diego County since 2014 What is driving massive appreciation for condos and townhomes? Average condo and townhome prices increased by 9.3% from January 2023 to January 2024, only 0.7% less than the appreciation of homes in the same time frame. This trend is unusual because homes historically appreciate much more quickly than condos. What's driving change in this historic trend? It's an easy one-word answer: 'affordability.' As interest rates continued to climb over the last 12 months, buyers broadened their search criteria in order to find a home at the right price. For example, on February 1st, mortgage rates dropped to nearly 6.5%. Buyers desiring a $5,000 per month principal and interest payment with 20% down would be looking at a $988,750 home. However, as mortgage rates migrated back up by 0.5% to 7%, these same buyers are now looking at a $940,000 home, nearly $50,000 less. Thus, affordability restrictions force people who previously planned to purchase a home to consider a townhouse or a condo. Additionally, in California, most first-time home buyers purchase a condo or a townhome. Now, even second-time home buyers are looking into the condo/townhome market as a viable option. Given these market drivers, increased condo appreciation makes sense. How does this affect you? 2024 is shaping up to be a great year to make your move. Forecasters expect mortgage rates to ease as the year progresses, and I'm expecting a very competitive market. Let's discuss your strategy. Feel free to reach out anytime for advice or even for lunch! :) See more detailed statistics here Read my Reviews Looking to buy or sell? Let's pinpoint your best strategy and make a move. See all of my listings here Thank you for your time today. I look forward to working with you now or in the future. 3825 32nd St San Diego, CA 92104 Update Profile Sent by zacha@porchlightrealty.ccsend.com powered by Try email marketing for free today!