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Condo sales nearly doubled from last December, jumping 96% year-over-year. The increase resulted in sales hovering 22% above the ten year average as local buyers snatch up anything that resembles affordability.
Again, what we are seeing is a market that has become increasingly more local focused, and the reality is this condos are mostly all anyone can afford. As a result of the uptick in sales, we are seeing inventory levels fall again. As of today, there is just 2.8 months of condo inventory for sale. This is a really low number, one which suggests upwards price pressure, not downwards price pressure.
Given there is just 2.8 months of supply for sale, and a sales to actives ratio moving upwards to 35%, there are increasing probabilities that prices could begin rising again. As of right now, it appears prices have basically flatlined after falling by more than double digits. Here we can see the annual change in the MLS benchmark price is accelerating upwards, although still officially 2.7% lower than it was this time last year.
However, our belief is that the recent surge in activity could stabilize, particularly if mortgage rates continue to move higher as they have been in recent months. Further, as we continue to highlight in nearly every report, new condo supply is coming. Today there is a record 38,000 apartment units under construction, supply cometh.
Today, apartment completions are near record highs, although we should see that number move even higher over the coming year or two.
In summary, the condo market looks pretty strong today, and should continue to perform quite well because of affordability issues. However, because there is a lot of supply coming we feel the upside for condos is quite limited, and there remains a strong probability for prices to move lower when more new supply finally leaks onto the market.