Don’t get too excited yet – or too far ahead of the data – but some industry analysts are beginning to report evidence of a condominium revival. “While nobody’s ready to condo like it’s 2005, in markets across the country, for-sale multifamily has a new appeal,” a recent article in Multifamily Executive News, an industry trade publication, observed. The article includes Boston – along with Philadelphia, Washington, D.C., Atlanta and Chicago ―on a list of markets that are beginning to see “a reawakening of condo sales and starts.”
Statistics compiled by the National Association of Realtors (NAR) provide some support for that optimism. The inventory of condominiums available for sale has been averaging 5.2 months for the past two quarters, the NAR reports. That compares with an average of 9.7 months in 2011, when the market was starting to recover. Separately, the National Association of Home Builders reports that the multi-family production component of its new construction index hit 50 in the third quarter of last year. That’s up from a low point of 9 in the third quarter of 2008.
“Condos are back, at least in selected markets,” Jordan Ray, managing director of the debt and equity financing group at Mission Capital Advisors, told the trade publication. “You’re seeing it in markets with strong job growth and increasing home prices, so I wouldn’t be surprised if you started seeing condominiums in Los Angeles or similar markets.” But the revival is not universal, Ray emphasized, noting, “We’re not jumping at the opportunity to raise capital for ground-up condo deals in Dubuque, Iowa.”