Market Watcher Monthly is a new feature penned by Alan Mark, President of The Mark Company; join Mr. Mark for a sneak peak at his quarterly On the Market Report.
Nearly all regions and housing product types in California have been hit by the housing downtown. When gathering data for The Mark Company's quarterly On The Market report, we found that the gap between the cost of a single-family home and condominium narrowed significantly in Q2 2008. According to California Association of Realtors (CAR) data, median condominium prices were only 7% lower than median single-family home prices in California for units sold in June 2008 - thus representing the lowest differential on record.
In fact, the differential had never dropped below 20% until late 2007 and has ranged as high as 44%. Over the past 10 years, California's monthly median condominium price has been an average of 29% lower than the monthly median single-family home price.
However, the recent narrowing of the gap between the median condominium price and the median single-family home price may be evidence of geographic differences rather than differences in housing type. Urban areas such as San Francisco tend to include a higher concentration of attached housing, including condominiums. According to Dataquick, the median price of all residential units sold in San Francisco in June 2008 was only 11.9% lower than the same month a year ago. Stronger housing markets in urban cores such as San Francisco may be responsible for the decreasing differential between median condominium prices and median single-family home prices.