Condominiums are still a popular choice for Connecticut’s homebuyers. Some of the first condo units at the yet-to-be-completed Shaw’s Landing in New London, shown above in a rendering, have sold for nearly $500,000.
In Connecticut’s single-family home market, double-digit price increases have more or less gone by the wayside, and sales are down across the state. But that does not hold true across the entire housing market.
Condominium prices continue to rise, and in some counties, they are rising at a fast clip. Like single-family homes, condo sales have decreased, but at a slower rate.
The median price of condos across the state rose 6 percent from the first half of 2005 to the first half of this year, while the median price of single-family homes rose less than 4 percent, according to The Warren Group, parent company of The Commercial Record. Condo sales fell during that time period, but at a lower rate than single-family homes. Sales of condominiums dropped less than 10 percent, while the sales of single-family homes dropped more than 13 percent.
And according to some, the condo market likely will stay strong for the foreseeable future, while most experts say they expect single-family home sales to level off.
Condos have been popular for some time in Connecticut, and the reason for that is easy to sum up.
“It’s price, No. 1,” said Barry Rosa, new-homes and land director for Prudential Connecticut Realty.
The median price for a condo in Connecticut at the end of the first half of the year was $189,900, or $85,100 less than the median price of a single-family home, which was $275,000. In some places, the discrepancy is even larger. The median price of a condo in Fairfield County, for example, was $290,975, while the median price for a single-family home there was $547,500.
There is often a “heck of a good spread” between single-family median prices and condo median prices, Rosa said. In some communities, the difference can be hundreds of thousands of dollars. So if a buyer cannot afford a single-family home, they can still live in a certain community if they buy a condo instead.
“The condo is the obvious choice,” Rosa said.
‘Really Good Arguments’
In New London County, condos were hugely popular in the first half of this year. Sales were up from 414 during the first six months of 2005 to 445 at midyear 2006, an increase of 7.5 percent. Median prices rose even more dramatically, from $155,000 last year to $190,000 this year, an increase of almost 23 percent – the highest median-price increase in the state.
The reason for the increase there is also price, according to John Bolduc, executive director of the Eastern Connecticut Association of Realtors. Condos are more affordable, he said, and in eastern Connecticut, median sales prices are way up compared to average incomes.
New condos are always being built, as well. The first phase of Shaw’s Landing, a New London development on the Thames River, came on line late last year. Some of the luxury condos there were selling for nearly $500,000.
“There are always new ones coming on line,” Bolduc said. “It’s amazing.”
Bolduc added that he believes New London’s condo and single-family markets will stay stable for the rest of this year, and that price increases will moderate.
While only one Connecticut county – New Haven – saw double-digit price increases of single-family homes, three of the state’s counties saw the median price of condos increase by more than 10 percent, including New London.
In Hartford County, the median price increased by more than 12 percent, from $150,000 last year to $169,700 this year. Sales there were down, but by less than 2 percent.
Middlesex County also saw a double-digit increase in median prices. The median price of a condo was $148,000 last year and $163,200 at the end of the first half of this year, an increase of more than 10 percent. Sales there were down significantly, however, by more than 16 percent.
Connecticut’s demographics also play a part in the popularity of condominiums, Rosa said. About 30 percent of the population is older than 50, and condos often are popular with that age group because of their lack of outside maintenance.
There are also new formats for condominiums that have proven popular. Connecticut has a number of condo communities where the condos stand alone, like single-family homes, but where a condo association takes care of outside maintenance. Some of those are also large – from 2,300 square feet to 2,500 square feet.
Those types of condos often appeal to families with older children who are close to graduating high school, Rosa said.
And since most families in Connecticut are made up of couples who both work, it makes sense to live somewhere where responsibilities like cutting the grass and cleaning the gutters are not concerns.
“There are really good arguments to be made for why the condo market will stay strong,” Rosa said.
