After plodding along over the winter, the real estate market picked up the pace this spring. According to a report by the Ann Arbor Area Board of Realtors, both new residential listings (527) and residential sales by Realtors (304) were finally up in April after several months of declining numbers.
Though listings increased in April, inventory still remains limited. The AAABOR tallies 7.3 percent fewer new listings year-to-date than at this point last year. The report quoted National Association of Realtors chief economist Lawrence Yun as saying that “prospective buyers are increasingly having difficulty finding an affordable home to buy.”
The affordable “starter home” has always been an elusive concept in Ann Arbor. Pointing to recent condominium sales to young families, some Realtors believe that condos could be satisfying the niche. To test this theory, I searched the Realtors’ MLS database for records for homes and condos with two or more bedrooms that were listed for less than $200,000 in the past year, and five years earlier.
Five years ago, there were more single family homes listed in this price range than condos: from mid-May 2012 to mid-May 2013, houses made up 55 percent of the inventory. But it’s been downhill ever since. From mid-May 2017 to mid-May 2018, they made up only 26 percent of the under-$200,000 inventory. Just ninety-one single-family homes meeting our criteria were offered for sale at that price, compared to 255 condominiums. That math is driving more young families to consider condos.
In May, Howard Hanna Realtor Middy Matthews sold a Geddes Lake unit to a couple with a six-month-old baby. “It’s the new starter home,” she emails, noting that many complexes “have shared pools and other amenities that you wouldn’t get in a home and that are much more relevant when your child is young.” Howard Hanna’s Tami Simpson and Reinhart’s Kim Peoples concur. “Due to the competitive market and the low inventory levels, over the last few years,” Peoples emails, “I have found that some traditional single family home buyers are opening their search and purchasing condominiums.
But as condos fill the starter-home niche, their price per square foot of living space is rising. In 2012–2013, the average single-family home in our sample was only 116 square feet bigger than the average condo—yet sold for $27,264 more. By 2015–2016 the average sold prices were within $6,000 of each other. In the past twelve months, the average sub-$200,000, two-plus–bedroom condo was twenty-one square feet bigger than the corresponding single-family home, and sold for $256 more.
There are seventy-two condos on this month’s map, including new ones at 410 N. First, downtown, Rathmore Lane at the North Oaks Condominiums under construction off of Nixon Rd., and Oxford Cr. at Kensington Woods in Scio.
Twenty condo sales fell under our $200,000 price point. Just six single family homes did the same.
New Construction
Single-Family Home
Condominium
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