Gainesville Condo Market Booming
Both national and Florida Realtor associations say that the housing sector is “adjusting to market conditions.”
May statistics show slower sales of homes and condominiums nationally, and prices continuing to climb upward, albeit more gradually. The Gainesville, Fla., market mirrors the overall Florida housing market when it comes to single-family homes, but its condominiums showed sharp increases in sales, according to the Gainesville Sun.
The National Association of Realtors says there is a 6.6 percent decline in home sales versus May 2005, and a 6 percent rise in prices. The 6 percent gain is a stark contrast from the 10-20 percent appreciation rates that have become customary in the past few years. In the Sunshine State, the Florida Association of Realtors reports a 24 percent decline in sales and price increases of 11 percent.
Experts say that rising inventories of properties for sale and increasingly expensive Florida home loan rates have both contributed to the cooling of the market.
But Gainesville, at least regarding condo sales, is at odds with statewide figures. Single-family home sales in the Gainesville market dropped by 28 percent in May — 332 compared to 462 in May 2005 — the sales of condos boomed between those two periods. While 97 condos sold in May 2005, 167 sold in May 2006, a 72 percent increase. This is the highest percentage hike in a state which is seeing declines up to 94 percent elsewhere.
“Rents are going up - one landlord said he was increasing them 3 percent a month. Pretty soon people aren’t going to want to pay higher rents. Condos provide affordability and investment,” said Carol Bosshardt, a broker and Realtor with Bosshardt Realty Services, who added that condos give first-time buyers a strong vehicle to ownership.
“In other places, they are a vacation or second home. Interest rates are starting to go crazy in places and people aren’t closing on those vacation condos because they aren’t a necessity. Here they represent the primary home or a retirement nest,” she said.
One of those new homeowners is Mary Anne Hoggan, who with her husband and three young daughters bought a condo conversion on the west side of town. The Hoggans, in their early 30s, moved here from outside of Dallas and had a set amount of money to spend on closing on a home. But they could not find a suitable one, so they went condo and haven’t looked back.
“We left a perfectly good starter home that cost us $100,000. The same home here was going to cost $200,000 or more. Our options were to buy a rundown house and spend thousands fixing it up, living in an outlying community, or buy a three-bedroom condominium,” Hoggan said. “Everyone who lives here considers their condo their home, and they take very good care of it and want it to look as good as possible.”
Roslyn Levy, Senior V.P. for Coldwell Banker MM Parrish Realtors, has seen more condos on the market this year and last year than ever before.
“It’s a greater share of the market,” and this is because they are more affordable than many homes, she said.
The median price of a condominium selling in Gainesville in May 2006 was $135,700, a 13 percent increase over May 2005. Levy warns, however, that condo association fees can bring a monthly cost up to near that of a more expensive, traditional home. The median price of a single-family home in Gainesville in May 2006 was $207,500, up 22 percent over last year.
Condos and townhouses also have appeal in their convenience and lifestyle.
“There are people who want to travel. There are those who have no interest whatsoever in doing lawn work or home maintenance,” Levy said.
She added that the perception of a slower housing market in the area overall is unfounded.
“At a sales meeting we tallied residential sales, including condominium, single-family and multi-family homes, new and existing. From January 1 to June 26, 2005, there were 2,216 closed transactions by all multiple listing service members. The same period this year, there were 2,247 closed transactions, about a 1 percent increase. In addition, average sales prices only rose 13 percent.”
Part of the continuing growth of the Gainesville area could be, to borrow the Realtors’ favorite phrase: location, location, location.
“After many years of seeing people come down here for the milder climate, I am now seeing people come up from South Florida to get away from big city problems,” Levy said. “I also see people moving in from the coast to get away from the hurricanes. It used to be people would ask how far it was to the beach, and I had to tell them you’re about as far away as you can get. Nowadays, that’s turning out to be a really big selling point.”
This may be just the beginning of Gainesville’s boom. As home prices in South Florida and the rising costs of Florida home loans continue to price out large numbers of buyers, expect the northern, more-affordable part of the state to see significant growth.
