Sacramento Real Estate Blog

Conventional wisdom has it that condos are the first to depreciate and the last to appreciate. It was tough to see this at play in the thick of the appreciation that we witnessed in 2003 and 2004, since at the time it looked like the ugliest condos in the most crime ridden neighborhoods had defied whatever natural laws might otherwise govern them, and they were rising in value at an incredible clip.

I thought it would be worthwhile however to break the Sacramento County down somewhat to see how condos have fared over the last year compared to single family homes. Sure enough, conventional wisdom seems to apply, with the condo market having slowed more than the market for single family homes.

In the first place, condos are taking longer to sell on average than their detached counterparts. In March of 2005 they were selling somewhat more quickly (24 days on average versus 26 days for single family homes), but the average days on market have risen for condos to 58, while the average for single family homes has only risen to 49.

Similarly, unit volume has been hit harder for condos than for single family homes. From March to March, single family home unit volume decreased 33.5%, from 1999 units last year to 1329 this year. During the same period, condo unit volume decreased 51.6%, from 188 last year to 91 this year. Moreover, inventory is currently higher for condos (7.4 months) than for single family homes (4.6 months).

Likewise, appreciation for condos has been lower than it has been for single family homes for this period. The median sale price for condos increased 4.9%, as opposed to 7.4% for single family homs. On a cost per square foot basis, single family homes increased 6.1% from last year, while condos only increased 2.8%.