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CONDO SALES FALL AS MORE ENTRY-LEVEL BUYERS ENTER THE MARKET

 CONDO SALES FALL AS MORE ENTRY-LEVEL BUYERS ENTER THE MARKET
 WASHINGTON, Jan. 31 /PRNewswire/ -- Sales of existing condominiums and co-operatives continued to decline between the third and fourth quarters of 1991, due to a flurry of single-family home purchases by entry-level buyers, according to the National Association of Realtors. Still, the fourth-quarter resale rate remained higher than that of one year earlier.
 The association recorded a national seasonally adjusted annual sales rate(A) of 299,000 previously owned apartment condominiums and co-operatives for October, November and December. The resale rate fell 4.8 percent from the third quarter of 1991, but was up 3.5 percent from the fourth quarter of 1990.
 As mortgage rates continued to fall during the fourth quarter, more and more first-time buyers entered the market. Many of these buyers found that favorable financing had made single-family homes affordable, particularly in lower-priced areas, said NAR President Dorcas T. Helfant. "We have seen a lot of entry-level buyers choosing single-family homes over condominiums as their starter homes. If people have the chance to purchase a single-family home that fits their budget, they'll take it," Helfant said.
 According to the Federal Home Loan Mortgage Corp., the national average commitment rate for 30-year, conventional, fixed-rate mortgages fell from 8.84 percent in October to 8.50 percent in December, the lowest point since the mid-1970s. "Generally, first-time buyers are going for as much as they can afford with rates so low," Helfant said.
 Still, because condominiums are typically less expensive than single-family homes, the units do fit the needs of buyers who remain priced out of the single-family market, Helfant noted. "Condominiums can serve as a stepping stone for those who can't make the stretch to single-family homes," she said. The national median price for existing condominiums and cooperatives was $83,600 during the fourth quarter, which was 15.6 below the $99,000 median price for single-family homes in the fourth quarter.
 The fourth-quarter condominium price dropped 4.2 percent from that for the third quarter. The median is the mid-point of the price range -- half the homes sell for more, half for less. The decline in the median price for condominiums between the third and fourth quarters reflects the large volume of units sold in the lower price ranges, presumably to entry-level buyers. However, the national median price was 1.0 percent above the condominium price for the fourth quarter of 1990.
 Helfant pointed out that in addition to serving as an affordable ownership alternative, condominiums continue to suit a specific segment of buyers -- including many singles -- who prefer the low maintenance of a multifamily unit, Helfant noted. "Cleaning gutters and mowing the yard isn't for everybody," she said.
 In the Northeast, which has the largest supply of condominiums, the resale rate of 117,000 units dropped 10.0 percent from the third quarter, but rose 6.4 percent from the fourth quarter of 1990. The fourth-quarter median price for condominiums in the region was $102,800, 5.6 percent below the third-quarter price, and 3.7 percent below the price for the fourth quarter of 1990.
 NAR Chief Economist John A. Tuccillo pointed out that the decline in the median price reflects continued softness in the region's multifamily markets. "There still are plenty of bargains to be found in the Northeast," Tuccillo said. The sizable price difference between condominiums and single-family homes continues to make condominiums the main choice for many entry-level buyers in the Northeast, he noted. The fourth-quarter median price for condominiums there was 25.1 percent lower than the $137,300 median price for single-family homes.
 The West, which has the smallest share of condominiums of all the regions, posted an increase in the fourth-quarter resale pace for condos and co-ops. The resale rate was 37,000 units, up 2.8 percent from the previous quarter, and unchanged from one year ago. The median price for condominiums in the fourth quarter was $104,400, down 7.2 percent from the third quarter. The decline is indicative of a greater number of entry-level purchases in the lower price range, Tuccillo said. The fourth-quarter median price for condos was 26.8 percent below the $142,700 price for single-family homes in the West.
 The resale pace of condos and co-ops in the Midwest was 59,000 units, unchanged from the third quarter, but up 9.3 percent from one year earlier. The median condo price there for the fourth quarter was $74,100, down 0.7 percent from the third quarter, but up 5.4 percent from the fourth quarter of 1990. Condominium prices are closer to single-family home prices in the Midwest than in any other region. There, the fourth-quarter condo price was 4.6 percent below the single-family home price, which was $77,700.
 In the South, condos and co-ops were sold at a rate of 86,000 units during the fourth quarter, falling 3.4 percent from the third quarter and 2.3 percent from one year earlier. The median condo price in the South was $67,400, 1.7 percent below that for the third quarter, but 5.5 percent above that for one year ago. The condo price was 23.8 percent below the fourth-quarter price of $88,400 for single-family homes.
 The National Association of Realtors, "The Voice for Real Estate," is the nation's largest trade association, representing more than 750,000 members involved in all aspects of the real estate industry.
 (A) The annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative resale pace for that month were maintained for four consecutive quarters. Seasonally adjusted annual rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, home sales are normally higher in the summer and relatively light in the winter, primarily because of differences in the weather.
 -0- 1/30/92
 /CONTACT: Trisha Morris, 202-383-7560, Lois Clinton, 202-383-1016, both of the National Association of Realtors/ CO: National Association of Realtors ST: District of Columbia IN: SU: ECO


TW -- DC005 -- 5494 01/31/92 09:08 EST
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Date:Jan 31, 1992
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