Earlier this week in the Kansas City Star, there was a lead story about the weak recovery regarding condo sales in the Kansas City market. Single family housing sales for our area have increased significantly, but condos are slow to sell since the housing crash.
What does that mean for a buyer interested in purchasing a condo?
Let’s take a closer look at the sales stats. Checking sales from downtown KCMO through the Brookside area, there have been 217 closed condo sales from Jan-July this year. The average sales price was $241,451. Forty-six of those sales prices were at $300K or higher, including two sales at $1.25 million (one was a cash sale at the Walnuts). During the same period in 2012, 170 units sold, 42 of those sales over $300K and the average sales price was $236,111. It looks like a bit of a recovery in the condo sector, with more units sold this year and a higher average sales price. In addition, the pricier units are selling, and investors continue to snap up the foreclosures and short sales.
There is still interest in the condo market, but buyers have to be very careful of where they purchase. Banks do not want to lend to buildings with a high percentage of rentals and may require a higher down payment. Several foreclosure/short sale listings can mean monthly dues aren’t being paid for some units, so the maintenance and general fund of the condo HOA takes a hit. Potential buyers have to study the financial reserve record and planned maintenance schedule for the condo building to be aware of future expenses. Look around and see if the grounds are groomed, are the shared amenities in good working order, talk to neighbors regarding transient residents and how they enjoy living in the building. Attend an HOA meeting and know the what the board is working on. Extra homework and due diligence is required for a condo purchase right now.
I sold two condos this year--and the buyers are very happy with their purchases. Both condo developments are financially sound, with active homeowners and in good locations. The Kansas City condo market grew very fast in the hot real estate years of 2003-2007. The demand for this type of housing isn’t what it was before the crash, but it will bounce back as well..it’s heading in the right direction.