CBD/Warehouse District Condo Sales
Prices for condos in the Central Business District and Warehouse District have been appreciating at a rapid rate for the last few years. At the same time, inventory has been volatile, with a low of 3 months worth of properties for sale (firmly a seller’s market) to a high of 9 months of inventory (firmly a buyer’s market).
What’s causing the volatility in the inventory?
Prices. Plain and simple, higher priced units are taking longer to sell, while the more affordable options continue to sell in record time. While most of 2015 saw average days on market of less than 60 days, that number shot up to 90 at the end of the year, compared to 51 in December 2014.
Number of units for sale. As prices have increased, so have the number of owners willing to sell and cash out the equity they’ve built over the last 5 years. The more competition there is on the market, the longer some units will take to sell.
We said last year that the rate of price increases were not sustainable long term. Comparing average sale prices, there were several months of prices lower in 2015 than in 2014. Some of this is due to a few really high end sales in 2014 that skew the numbers a bit, but we anticipate that prices will at a minimum stabilize this year, if not drop slightly.
That’s not to say that the market is not still strong – it is. Warehouse District condos are selling within an average of 3% of the list prices. As long as the price is right, sellers can assume they will get close to their asking price when selling. How long it will take for that to happen is what is in flux right now.