2024 had a mixed bag of data signals, and as we look at the year ahead we may see more of the same inconsistency we saw.
Condos set record median price in December but end the year with more listings available and longer listing times
2024 ends with 56% more condos for sale year-to-date (YTD), a result of increasing insurance costs, capital improvements, and deferred maintenance in many buildings that have persisted over time. This substantial inventory increase reflects ongoing economic pressures that property owners face, including rising costs of materials and labor that have influenced their ability to maintain and enhance their properties. Year-to-date (YTD) condo sales decreased by 2.5% from last year and are down an alarming 30% compared to 2022, which highlights the challenges buyers are facing in this fluctuating market. Despite these conditions, the current months of active inventory for condos sit at 5.2%, indicating a BUYER’s market where potential purchasers may have more negotiating power than in previous years. This shift presents unique opportunities for buyers who may find favorable pricing and a wider selection. Overall, the condo market’s dynamics are changing rapidly, and stakeholders must stay informed to navigate these trends effectively.
Single-family homes fared better than condos, better but are not immune to similar insurance issues
Inventory of single-family homes rose 12% year-over-year in 2024, paired with longer marketing times. In spite of this, many homes still garnered multiple offers as land becomes harder to purchase. All in all, median prices rose 4.8% and and total sales rose by 9.1%.
Pricing matters as buyers define the most important factors
A significant portion of the market’s activity in 2024 was driven by single-family homes priced at $999,999 and below, which accounted for about 40% of total sales, reflecting a strong demand from first-time buyers and families looking for affordable options. This segment’s popularity highlights the importance of pricing strategies and the appeal of suburban living, where larger properties and better amenities are often available. Meanwhile, the higher-end market, with homes priced at $1 million and above, saw a remarkable 19.2% increase in sales, suggesting a resurgence in luxury real estate investments, particularly among affluent buyers seeking more spacious and luxurious properties amidst changing lifestyle preferences. Condo sales also saw significant growth in the $500,000 and above range, surpassing sales at lower price points, indicating that many buyers are now prioritizing amenities and location over purely price-driven considerations, thus reshaping the narrative of urban real estate where lifestyle and convenience are becoming major selling points.
Many factors should keep markets consistent again in 2025
The outlook for the year ahead is simply “same, same.” The condo market will continue to struggle with increased inventory, which has been a persistent challenge over the past few years, leading to heightened competition among sellers. This situation is exacerbated by a notable demographic shift, as more buyers are seeking larger living spaces due to changing lifestyle preferences. Meanwhile, the limited supply of homes is expected to keep values up in a competitive market, creating a paradox where condos may become increasingly harder to sell, yet retain their value due to overall market demand. As we approach 2025, it will be vital for investors and homebuyers to closely monitor these trends and adapt their strategies accordingly, ensuring that they can navigate through the complexities of the market effectively.
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