WASHINGTON -- Excellent affordability conditions boosted the sales pace of existing condominiums and co-operatives during the first quarter of 1991, according to the National Association of Realtors.
The association recorded a national seasonally adjusted annual sales rate of 306,000 previously owned apartment condominiums and co-operatives in this year's first quarter. The resale pace rose 5.9 percent from the fourth quarter of 1990, but fell 11.8 percent from the first quarter of 1990. The national median price for existing condos was $79,900 during the first quarter, down 3.6 percent from one year ago.
During the first three months of 1991, interest rates in the 9 percent range and relatively low prices brought more consumers into the condo/co-op market, which often has more affordable alternatives, said NAR President Harley E. Rouda.
`The excellent buying conditions during the first quarter lured many singles and young couples into the housing market for the first time who felt their day had come. In terms of affordability, the condo/co-op market, with its prevalence of lower prices, is perfectly suited for those individuals who are trying to buy for the first time,` Rouda said.
NAR Chief Economist John A. Tuccillo sees the national increase in condo activity as a forerunner to improvement in the overall housing market. `Given the Federal Reserve's recent prime rate cut, we expect mortgage interest rates to decline, which will then sustain increased condo sales activity, as well as demand for detached single-family housing,` he said.
Condominium sales by region during the first quarter showed a positive picture. In the Northeast, the region with the largest supply of condominiums, the sales rate of 109,000 units dropped a scant 0.9 percent from the fourth quarter, and 16.8 percent from last year's first quarter. The median price for condos in the Northeast was $103,800, 5 percent below that for the first quarter of 1990.
The resale pace of condominiums and co-ops in the Midwest was 70,000 units, increasing 29.6 percent from the fourth quarter but falling 1.4 percent from the rate for the first quarter of 1990. The median condo price there for the first quarter was $65,800 or 2.7 percent below that for one year earlier.
In the South, condos and co-ops sold at a rate of 90,000 units during the first quarter, rising 2.3 percent from the fourth quarter and falling 3.2 percent from one year earlier. The median condo price in the South during the first quarter was $65,600, 3 percent below the first quarter of 1990. In the West, the condo resale pace was 36,000 units, falling 2.7 percent from the previous quarter, and 30.8 percent from the first quarter of 1990. The median price for condos in the West was $99,100, 1.7 percent above that for the first quarter of 1990.
Tuccillo said the victory in the Persian Gulf gave an initial and much needed jump start to housing in February. `Now, the combination of the Fed's rate cut and affordable prices should put more steam in the housing market,` he said.
The National Association of Realtors, the nation's largest trade association, is the voice for real estate, representing nearly 800,000 members involved in all aspects of the real estate industry.
The annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative resale pace for that quarter were maintained. for four consecutive quarters.
Seasonally adjusted annual rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, condo/co-op sales are normally higher in the summer and relatively light in the winter, primarily because of differences in the weather.