The Condo Market Lagged in 2020—Can It Bounce Back?

Zillow’s 2020 Suburban/Urban Report found where Americans want to live remained fairly steady, but the performance of the condo market last year points toward a shift in what Americans want to live in. Compared to single-family homes, both sales and price growth for condos were lower and inventory levels were generally higher. Condo inventory spiked starting in the summertime, possibly pointing toward condo owners trading up. Zillow does note it remains unclear whether this will be a fleeting trend or a more permanent one. Rising home prices and the struggle to find affordable housing may push more prospective buyers toward condos.

Even so, this year-over-year increase in condo inventory happened in the midst of steep overall inventory declines, potentially providing homebuyers with modestly more options in a tight market.

Echoing the national trend, annual growth in condo inventory exceeded growth in SFR inventory in 48 of the nation’s 50 largest metro areas. New Orleans and Charlotte were the only exceptions.

Around the same time as inventory levels were rising, the share of condo listings that had at least one price cut also rose above that of SFR listings — the first time that occurred, since at least early 2019, offering further evidence of a softening condo market.

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