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CONDO SALES RISE AS BUYERS RESPOND TO LOW MORTGAGE RATES

 WASHINGTON, May ?/PRNewswire/ -- Sales of existing condominiums and co-operatives rose notably between the first quarter of this year and the same time period one year ago, as buyers responded to improving economic conditions and extremely low mortgage rates, according to the National Association of Realtors.
 The association recorded a national seasonally adjusted annual sales rate(A) of 388,000 previously owned apartment condominiums and co- operatives for January, February and March. The first quarter resale rate was 5.7 percent higher than that for the first quarter of 1992. Decreasing mortgage rates during the first quarter opened up the home market to many first-time buyers who were searching for an affordable way to achieve home ownership, said NAR President William S. Chee. "Buying conditions have remained very favorable for people seeking starter homes. A condo or co-op is an excellent way to enter the market," he said.
 According to the Federal Home Loan Mortgage Corp., the national average commitment rate for 30-year, conventional, fixed-rate mortgages declined steadily from 8.00 percent in January to 7.50 percent in March. On the whole, mortgage rates remained about one percentage point below those for the first quarter of 1992.
 Chee noted that improved consumer confidence in the first quarter led many buyers to follow through with their home purchases. "A major factor was the general belief by consumers that the economy had started to rebound. This, coupled with mortgage rates too low to pass up, resulted in a busy quarter for condo sales," he said.
 The national median price for existing condominiums was $82,100 during the first quarter, down 2.3 percent from the first quarter of 1992. The decline reflects heavy activity by first-time buyers. The condo price was 21.2 percent below the first-quarter price for single- family homes, which was $104,200.
 Because condominiums tend to be less expensive than single-family homes, the units continue to be a "perfect choice" for singles or couples trying to purchase on one income, Chee noted. The relatively low maintenance provided by a condominium also is appealing to people who "don't want to spend their free time working in the yard," Chee said.
 Although increases in condominium sales were posted in all regions, the sharpest rise came in the Northeast, which has the largest share of condominiums as a percentage of total housing. That region posted a resale rate of 84,000 units, up 10.5 percent from the first quarter of 1993. The year-to-year surge reflects the sharp rise in entry-level activity, noted NAR Chief Economist John A. Tuccillo. "The substantial price difference between condominiums and single-family homes in the Northeast continues to make condominiums the main choice for first-time buyers in the Northeast," he said.
 The first-quarter median price for condominiums in the Northeast was $96,800, 29.5 percent less than the median price of $137,400 for single- family homes. The condominium price was 4.5 percent lower than that for one year earlier. The drop in the median price shows that most of the purchases remain in the lower end of the price range, Tuccillo said. The resale pace of condos and co-ops in the Midwest was 76,000 units in the first quarter, up 8.6 percent from the first quarter of 1992. The median condo price there for the first quarter was $73,100, 1.6 percent below that for one year ago. Condominium prices are closer to single- family home prices in the Midwest than in any other region. There, the first-quarter condo price was 12.9 percent below the single-family home price, which was $83,900.
 In the South, condos and co-ops were sold at a rate of 123,000 units during the first quarter, rising 5.1 percent from the first quarter of 1992. Much of the South's condo market is in Florida, where many sales are made to retirees. The median condo price in the South was $68,500, 0.3 percent below that for the first quarter of 1992. The condo price was 24.5 percent below the first-quarter price of $90,700 for single- family homes.
 The West posted a first-quarter resale pace of 105,000 units for condos and co-ops, which was 2.0 percent above the rate of one year earlier. The first-quarter median price for condos in the West was $110,200, 3.4 percent below that for the first quarter of 1992. The condominium price was 22.5 percent below the first-quarter price for single-family homes, which was $142,200.
 The National Association of Realtors, "The Voice for Real Estate," is the nation's largest trade association, representing nearly 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- 5/3/93
 /CONTACT: Trisha Morris, 202-383-7560, Scott Sherwood, 202-383-1016, or Walter Molony, 202-383-1177, all of the National Association of Realtors/


CO: National Association of Realtors ST: District of Columbia IN: SU: ECO

MH-DC -- DC007 -- 3575 05/03/93 08:47 EDT
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Date:May 3, 1993
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