High Price of Single-family Homes Fueling Sharp Rise in Condo Sales

LOS ANGELES-Sales of condominiums and townhomes have risen sharply, a new report says, thanks to the skyrocketing prices of California’s single-family homes and relatively low mortgage rates.

Condominium sales in the state are up about 8.2% this year, the report by the LA-based California Association of Realtors says, following a 7.5% sales gain in 1999 from ’98 levels. More people are looking to the multifamily market because the cost of freestanding houses has soared, the trade group adds.

Not surprisingly, condos are also accounting for a greater share of the overall sales pie. Multifamily units are accounting for about 25% of overall homes sales in the state, CAR says, up from only 18% a year ago.

More gains are expected in 2001, most analysts say. And while construction of condo and townhome developments has lagged over the past several years, it could get an unexpected boost in 2001 from a California Supreme Court ruling earlier this week that put new limits on a condo buyer’s ability to sue builders over certain types of defects.