- The Washington Times - Monday, March 7, 2005

Condominiums have become the fastest-growing form of home sales in the Washington area as buyers try to find a low-cost option for homeownership in one of the nation’s most expensive markets.

Local condominium sales have increased at an average rate of 10.4 percent per year in the past five years. Single-family home sales increased at an average 5.3 percent per year and town houses at 8.6 percent.

“Before five years ago, prices were more or less static for condos,” said David Mayhood, president of the Mayhood Cos., a McLean real estate marketing and sales company.

Since then, Washington’s job market has grown rapidly and city administrators have pursued policies for revitalizing downtown, he said. Other cities have followed a similar course.

“There is an urban renaissance that is occurring in a lot of our cities in the U.S., which is a reaction to suburban sprawl,” said William Rich, a researcher for Delta Associates, a real estate research firm.

With high real estate prices, developers try to maximize their return on investment by building multifamily housing, such as condominiums, he said.

“Several of these projects may start out as rental, but developers have been opportunistic and converted their projects to condo,” Mr. Rich said.

Examples include Parkside at Alexandria in Alexandria and Parc Reston in Reston.

Nationally, condominium sales set a record in 2004 for the ninth consecutive year, according to the National Association of Realtors.

Last year, there were 970,000 sales of existing condo and co-op units, beating the record 898,000 sales in 2003 by 8 percent, the trade group said.

Price remains the greatest incentive for choosing condominiums.

The median home price in the Washington area jumped 27 percent to $371,000 in 2004, according to the National Association of Home Builders. The figure includes new and existing single-family detached homes and town houses.

“I chose to buy a condo because the prices were much more in my price range than a single-family house,” said Karina Halvorsen, 33, a grant writer for a nonprofit organization who lives in Alexandria. “I also liked the idea that I would not have to do any outside work, like yardwork or painting.”

Nationally, the median price for an existing condo was $203,200 in the fourth quarter of 2004, up nearly 17 percent from a year earlier.

Prices of condominiums are slightly higher in the Washington area, typically selling for about $250,000, according to real estate agents.

Condominiums offer convenience in urban locations that might not be available in the suburbs, said Conrad Egan, president of the National Housing Conference, a housing advocacy organization.

Condominiums are best “if you’re looking for an in-town experience, near convention centers and access to good transportation networks,” Mr. Egan said.

However, the conversions of apartment complexes to condominiums represents a threat to apartment dwellers, he said.

“It drives rents up and in some cases displaces lower-income and elderly persons who may have difficulty finding another place to live,” Mr. Egan said.

Apartment managers say rents in the Washington area have been rising at about the same rate as house prices.

Single-family houses remain the preferred kind of home in the Washington area, but condominiums are gaining.

Last year, 51,879 single-family homes were sold in the Washington area, according to Delta Associates. Town houses were second with 38,026 sales, and condominiums were third with 22,292 sales.

However, condominium sales have increased from about 22 percent of home sales five years ago to about 25 percent last year.

“What you most of the time find is that the demand for condominium housing comes following an increase in home prices,” said Rob Swanson, chief executive officer of Signil Wealth Network, a national real estate investment company.

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