Condo markets largely mimicking home prices

Three of the five condo markets followed by the S&P/Case-Shiller home prices indices recorded new cycle lows with the release of March 2011 data.  Boston, Chicago and Los Angeles fell to new lows, with the markets now down 18.1%, 36.3% and 38.5% versus their respective peaks.

Chicago has been the hardest hit in recent months.  This market’s condo index indicates that prices fell by 4.5% in the month of March, after having fallen 3.1% and 5.4% in February and January, respectively.  This puts the market down 12.5% in the first quarter of 2011 alone.  With a March 2011 level of 102.57, condo prices are at their lowest level in 11 years.

S&P/Case-Shiller condo price indices for five major MSAs. Sources: S&P Indices and FiServ

Looking at some summary statistics below, it appears that the New York and San Francisco condo markets might be riding out this crisis a bit better than their single-family home markets.  Both cities saw condo prices rise in March over February – New York up 1.0% and San Francisco up 2.6% – and are posting annual rates of decline that are significantly smaller than their housing counterparts.

S&P/Case-Shller condo price indices, monthly and annual statistics for five major MSAs. Sources: S&P Indices and FiServ.

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  1. David Horner says:

    Hi Maureen,

    A lot of the NYC market is specified as coop as opposed to condo. Are coops included in the stats?

    Ugly employment report today! And policy stimulus is likely to be withdrawn, not added to. Thoughts about the “shock” effect on the housing market??


    • Maureen Maitland says:

      Hi David,

      First, coops are not considered. But for New York we look at a lot more than just Manhattan, so there is a sizable numbers of condos in the count. For the purpose of our indices, “New York” is largely the commuting area surrounding Manhattan. It includes more than two dozen counties in NY, NJ, CT and a bit of PA. All of it is detailed in our methodology at Cooperatives are jointly owned by their tenants (shareholders), which makes it difficult to separate the value of individual units from the value of the entire cooperative. Because of their unique ownership structure, the prices of cooperatives are not directly comparable with the prices of condominiums, which is why they are excluded from the condo indices. Given the fact that the last stimulus did prove to be only temporary, I am not sure too many market participants are expecting anything further. So I am not sure there is anything to be shocked about at this point. Just further disappointment in the pace (or lack of) in the housing recovery. Maureen

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