Pioneer Press: The Condo Conundrum

by Alex Stenback on December 12, 2005

We knew there’d been a lot of new condos & townhomes built over the past few years, but the following stats from this weekend’s Pioneer Press really put into context just how much building has been going on:

37,000:  New townhomes built in the 11 County Metro since 2000.
3700:     New condos built in the 11 County Metro since 2000.
1300:     New condos, Downtown Minneapolis, since 1995.
11,000:  New condos to be built over the next few years.

That, dear readers, is a tremendous amount of inventory for the market to absorb serious glut.  Now, over the long haul, market forces will right this imbalance (condos do about as well as single family homes, long term) but meantime we’ll be hearing more stories like this one:

The Apple Valley town home sold quickly, but it wasn’t necessarily good news… Two years ago, he purchased a similar three-bedroom unit in the same development for $20,000 more than the price [at which the home sold].

ยท Condominium Conundrum [PioneerPress]

{ 4 comments… read them below or add one }

Steve December 12, 2005 at 3:45 pm

“…condos do about as well as single family homes…”

What does this phrase mean, exactly?

Thanks.

Great Blog.

Editor December 12, 2005 at 6:02 pm

Percentage wise, over the long term, a condo, townhome, and single family home will appreciate atthe same rate.

Thanks Steve.

Scott McGerik December 13, 2005 at 2:22 pm

My take:

11,000 units is a lot but those have yet to be built. Anyone can propose to build a 1000-unit condo tower but until construction begins, I don’t give it much credence.

Do you have numbers on actual units under construction? Do those seem in line with what the market can absorb?

Editor December 13, 2005 at 2:42 pm

Nope, don’t have those, and you make a good point – proposed can mean a lot of things, and as we know, the city council(s) can kill these projects, as can a developer who pulls or delays a project if the market/demand softens.

Leave a Comment

 

Previous post:

Next post: