According to a new analysis from Redfin [1], the typical American single-family home that sold this year went for an average price that was 17.3% more than the typical condo. This is a $58,000 difference in price.
This price gap is an increase from the 15.4% difference in price between single-family homes and condos sold last year. This is the largest premium recorded by Redfin since 2013 when it began recording home price data that controls for features such as location, size, and the number of bedrooms and bathrooms in the homes.
The coronavirus pandemic has spurred record-low mortgage rates, while an increase in work-from-home positions has motivated many Americans to seek out homes with more space for a designated work area. These are likely causes for the high demand and skyrocketing prices for single-family homes across the country.
Condos, however, have not had as much excitement from potential buyers. Redfin reports that the median price for single-family homes increased by 15.5% year over year last month. Meanwhile, the median price for condos in October increased by 9.9%.
Not only is there a disparity in prices between single-family homes and condos, but there is also a difference in the amount of time it takes to sell. October home sales data shows that the typical condo was on the market for 36 days before being sold, while the typical single-family home lasted 27 days before it went off the market.
Single-family homes were also more likely to sell above the listing price last month. 36.6% of single-family homes sold for more than their listing price in October compared to 22.8% of condos.
Although condo sales dropped by about 50% last spring, they rose by 22.7% in October, which may be a sign of condo sales bouncing back. This increase in sales is not far behind single-family home sales, which rose by 23.3% last month.
Of the 86 metros that Redfin analyzed, the Fort Lauderdale, FL area had the largest price premium for single-family homes in October, which sold for 38.3% more than condos in the area. The other four of the top five metro areas with the highest premiums for single-family homes last month were Bakersfield, CA (35.8%); Lakeland, FL (34.3%); Oklahoma City, OK (30.3%) and Tucson, AZ, which also had a premium of 30.3%.