Condos bottomed out during the recession, but are coming back at a stronger pace than conventional single-family homes according to Zillow's Svenja Gudell.
From their peak height to their lowest level, the median value of U.S. condos fell by 33.2%, a much harsher drop than the 20% loss in value seen with single-family homes. But, condos are now appreciating fast than single-family homes at a rate of 5.1% annually, compared to 3.7%.
In the third quarter of 2015, a typical condo was worth $191,300, while a typical single-family home was worth less at $181,500. This trend has continued for 32 straight months—the last time single family values grew more quickly than those of condos was in January 2013.
The surge in condo values is likely driven by a few factors. As housing preferences shift, particularly among millennials and other younger buyers, condos typically represent both a more urban and in many cases more affordable housing option for those looking to make the jump into homeownership. But this demand for more urban condos may not be met by adequate supply. Condos represent a relatively small share of the total housing stock in many of the nation’s most populous cities.