- Home buyers are feeling budget pressure as home prices and down payments soar. Roughly 2 in 3 recent home buyers took more than a year to save up for their home, while 71% had to exceed their initial budget to get the home they wanted.
- In 2021, buyers paid 6.7% less for condos and other attached home types than single family homes in the US, on average. This trend is relatively understated as a result of condos being highly concentrated in high-density, high cost areas.
- In the US, 84.1% of all condo purchases in 2021 were in just 6% of the country’s counties. The sales price for condos in these counties was an average 32.4% higher than the average condo county sale price.
- Drilling down to the county-level reveals that condos are generally more affordable than single-family homes within counties, and have lagged single-family homes in price growth over the last decade. In 2021, condos were more affordable than single family homes in the majority of US counties.
- Buyers set on living near the city center may be able to lock in savings by opting for a condo. However, buyers willing to venture outside the city center may benefit from lower condo and single-family home prices despite recent price growth.
- If single-family homes continue to become less and less affordable, condos may become more popular, and demand may lead to rapid price growth. However, if this popularity leads to increased condo construction in areas with rapidly growing prices, increased supply may lead to stabilized condo prices.
As home prices reach new heights and down payments soar, buyers are weighing how much their budgets and their preferences can bend to achieve the goal of home ownership. In fact, 2 in 3 recent home buyers reported that it took them a year or more to save for their home, and 71% had to go above their initial budget to get the home they wanted in what has been a hotly competitive housing market. Generally, in the last decade, condos gained popularity for their relative affordability in areas where single-family homes became increasingly unaffordable. For buyers committed to living in the hustle and bustle of big cities, looking into condo options might be the ticket to homeownership. However, buyers willing to go outside of the city center will find more bang for their buck and may be able to buy a single-family home in the suburbs for a comparable price to a centrally-located condo. Either way, condos offer affordable options relative to similarly located single-family homes in most markets.
To examine this trade off more closely, we took a look at state and county-level sales data for the New York City, Boston, Chicago and Seattle areas, including the states of New York, Massachusetts, Illinois and Washington. Counties were classified as central or outer based on their proximity to these city-centers. For price and price growth comparisons, we focused on counties with at least 15 condo sales in the years studied to ensure data quality.
Condos Offer Savings in Both Central and Outlying Counties
A disproportionate number of condos are sold in expensive areas, which results in seemingly lower savings from opting for a condo when examining the data at a state-level. The image below demonstrates this trend in New York state, where more than a third of all condo sales in the state are in Manhattan (New York County–colored dark red) with notable shares of condo sales also seen in Brooklyn and Queens (King and Queens Counties). This trend holds for the other states analyzed.
At the county-level, condos offered an average 13.5% savings across the counties in the states studied. Counties that did not see a discount for condos typically contained ski or beach destinations that skewed condo prices higher. In New York, condos upstate tended to be pricier than single-family homes for this reason.
As shown below, condos in Illinois averaged 10.3% less expensive than single-family homes in the same county. The same general trend applies for the states studied, though condos in New York are priced roughly the same as single-family homes at the county-level due to vacation condos in many counties, as discussed above.
This trend suggests that there is something different about the single-family homes at the county-level. Comparing pre-pandemic (2019) to 2021, reveals that in most counties, rates of appreciation have been either similar or single-family homes have appreciated faster. Interestingly, in this time frame, single-family homes in outlying counties appreciated fastest, in line with the migration trend toward larger homes and more space since the beginning of the pandemic.
However, despite this price growth, the typical single family home in a non-central county was 37.4% less expensive than the typical condo in a central county in these states in 2021. For example, in Cook County, IL (central chicago), 52.4% of all sales were condos in 2021. In this county, condos offered a 10.4% discount compared to single-family homes. In the nearby, but further out DeKalb County, condos (7.2% of sales) were sold for an average 18.2% less than single-family homes. Condos offered considerable savings in both counties, but buyers willing to live outside of the city in DeKalb benefitted from lower prices of all home types. The average single-family home in DeKalb County was 9.0% less expensive than a condo in Cook County in 2021.
Condos are a Lifeline for Buyers Set on City-Dwelling
Counties near the high-density urban hubs we studied have seen condo sale prices consistently below single-family homes, and have mostly seen condo price appreciation lag single family home price appreciation in the last couple years. In 2021, condos offered an average 33.2% discount compared to single-family homes in counties central to New York, Boston, Chicago and Seattle. Additionally, since 2019, condo price growth has lagged single-family home price growth in central counties, averaging 13.9% across central counties compared to SFH price growth averaging 19.9% in the same area. This rapid single family home price growth pushed more buyers towards condos in these central counties, resulting in an average 31.4% increase in the number of condos sold in 2021 compared to two years prior while single family homes saw just a 20.6% increase in the same timeframe.
In central Chicago, 45.1% of all 2021 sales were condos, which were priced an average 33.2% below single-family homes in the same area. Between 2019 and 2021, condo sale prices in Chicago increased by 11.2% while single family homes in the area increased by 19.0%. In New York City, condos and single family homes appreciated at roughly the same rate, but condos were on average 41.4% less expensive than single family homes in 2021. In Boston, single-family home price growth outpaced condo price growth by nearly 9.0% between 2019 and 2021. Seattle saw similar trends, with single-family home prices outpacing condo price growth by 7.5% between 2019 and 2021. Though single-family homes and condos are not typically comparably sized, continued price and interest rate growth is likely to push some city-dwelling buyers towards considering this lower-priced alternative in order to put down roots in their desired neighborhood. Those thinking about using a condo as a starter-home, however, will want to consider the fact that slower price appreciation for a condo may mean a bit less equity to use in a future trade-up purchase.
A Starter Home in Suburbia May Be Cheaper and Appreciate More than A Condo Downtown
Comparing prices in metro counties with prices in outer counties in the same state reveals that, unsurprisingly, buyers willing to be flexible about location may reap benefits. Prices appreciated faster, on average, in non-central counties, but even so, these areas offer considerable savings to buyers weighing central versus suburb. In Massachusetts, condos located in central counties (Essex, Middlesex, Norfolk and Suffolk) were priced an average 29.7% higher than single-family homes in outer counties in 2021, and central single-family homes were an average 71.2% more expensive than outer county single-family homes. In New York, central county (Kings, Queens, New York, Bronx) condos were more than twice the price of outer county single-family homes, on average, in 2021. The same trend applies in Seattle where metro area condos sold for an average 38.8% more than outer county single-family homes. This stark difference emphasizes the benefits of flexibility regarding location.
As of May 2022, condos made up 21.4% of typical monthly listings and offered a 0.5% discount compared to single-family homes at the national level, the lowest discount in May in the data’s history. Condo price growth outpaced single-family home price growth at a national level in May 2021 and May 2022. The shrinking discount and faster price growth is likely due to the high concentration of condos in high-priced areas, as well as increased condo demand. Condo active listings were down 10.5% year-over-year in May, while single-family home active listings were up 14.5% year-over-year, indicating increased condo demand kept condo inventory low while single-family home inventory made progress towards pre-pandemic levels. The number of condo pending listings is down year-over-year, but up 50.3% compared to 2017-2019 levels, indicating the popularity of condos as the housing market has gotten less affordable. Condos spent 20.0% less time on market in May 2022 compared to the previous year, while single-family home time on market decreased by 13.2% year-over-year.
As single-family home price growth continues, demand for condos will likely continue to increase among those not willing to give up an urban lifestyle. Buying a condo, which is generally less expensive than a single-family home, enables a household to afford to own in the middle of it all, and often means a newer-built home with less maintenance responsibility. However, workplace flexibility, which many workers still enjoy in a competitive jobs market, is opening up the suburbs as a viable option for more homebuyers. With single-family suburban homes appreciating faster than condos over time, buyers willing to go to the suburbs for a starter-home may find themselves better positioned for a trade-up buy in the future. Buyers will just want to make sure they’re ready for the extra maintenance and potential costs that go along with a single-family home compared to a condo.
 For simplicity, we refer to attached home types as ‘condos’ in this analysis. However, the condo classification includes all attached home types (i.e. townhomes, rowhomes, co-ops).
 Counties where condos are more expensive than single-family homes tend to include vacation features such as a beach or ski destination. Therefore, vacation condos skew the condo price higher and the condo to single-family home comparison is not quite apples to apples within the county.