House or Condo?

Physician's Money Digest, May 15 2004, Volume 11, Issue 9

For the first time in history, themedian value of a condo nationwidenow outstrips that of a single-familyhome. The National Association ofRealtors reports that the median priceof a condo is now $174,700; for a single-family home it is $171,600. Thevalue of condos has skyrocketed by33% since 2001, while single homesincreased by only 15%. Experts citemany reasons for this extraordinaryboom, including a growing demographicof empty nesters who are selling largerhomes and downsizing, as well asyoung people fueled by favorable interestrates who are buying condos ratherthan renting apartments.

Traditionally, the expectation wasthat single-family homes had a betterlong-term value, but prosperity in thecurrent condo market could alter thatlong-held belief. But don't get carriedaway and decide to sell your home.Some say that the condo price growthspike is unbalanced, being led by steepincreases in limited markets in areassuch as New York, Boston, Chicago,Los Angeles, and Phoenix. After acondo-building glut in the 1980s, realestate followers admit that it's thenewer condos on the market that havehelped boost prices.