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52 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Home Prices Falling Nearly Twice as Fast as Condo Prices A study revealed condo prices are much more resistant to price declines than single-family home prices, with homebuyers opting for more budget-friendly alternatives. A ccording to a Point2 study, when the pandemic forced many Americans to settle into remote work, single-family homes—preferably with a backyard—became a fast-growing trend for homebuy- ers. Consequently, homebuyers went into a real house-hunting frenzy, jumpstarting a period of bitter bidding wars and rapidly escalating asking prices. Now, single-family home prices that shot into the stratosphere are currently undergoing a dramatic price correction, but the same is not true for condos. After demand for space drove house prices to historic highs, making them unattainable, homebuyers started shifting their attention toward the more affordable op- tion—condos. As a result, the trend that is becoming increasingly evident is that house prices are falling almost twice as fast as condo prices. The evolution of single-family home and condo prices in the 100 largest U.S. cities shows that increasing demand for condos makes prices in this segment hold up much bet- ter than single-family home prices. House Prices Dropped 8.6% YoY, While Condo Prices Only Decreased 4.4% Currently, the average house spends 15 more days on the mar- ket this year than last year. The average condo only added nine more days than last year. House prices decreased in 88 of the 100 largest U.S. cities, with Irving, Texas leading the way with a -22% decline in just a few months. Toledo, Ohio followed suit, with a similar drop. Likewise, in 10 other cities, house prices contracted between -15% and -20% compared to their spring peaks. Condo prices, on the other hand, only decreased in 65 of the 100 largest U.S. cities. And, while the markets where prices kept growing were fewer, the price increases were much more spectacular: The most significant condo price increase was recorded in Oklahoma City, Oklahoma, at 79%. For comparison, the larg- est house price increase was a much more subdued 11% in Tulsa, Oklahoma. The current trend reversal is a direct result of houses—espe- cially big houses—dominating the mindset of buyers throughout the nation for two whole years during the pandemic. The need for space was felt so acutely during the lockdown that renters and even existing homeowners were ex- tremely determined to find more spacious homes to accommodate their new lifestyle. More than just determined, buyers were also willing and able to pay increasingly more for more space. When interest rates were hovering around 3% (although sustained demand pushed prices higher and higher) buyers still dared to take the plunge. However, increasing interest rates were the straw that broke the buyers' backs, forcing them to take into consideration the more affordable alternative. Those who still wanted to make the move to homeownership were now choos- ing condos over houses. Since Spring Peak, Condo Prices Declined in Only 65 Cities, but Single-Family Home Prices Fell in 88 Large Cities. The largest condo price drop was Stockton's -29%, while the biggest single-family home price drop was Irving's -22%.