Although housing prices have fallen over the past few months, single-family home prices have dropped more significantly than condo prices.
According to Point2, the single-family home price reached its highest in May at $452,518 and declined by 8.5% in October. The global pandemic has shifted people’s focus on their ideal homes, which mostly prefer single-home units. Consequently, homebuyers went into an absolute house-hunting frenzy, jumpstarting bitter bidding wars and rapidly skyrocketing asking prices. New Orleans, Omaha, Arizona, and North Carolina were among the states with the highest prices for condo units dipping low.
Zillow predicts that affordability will be the critical driver of supply and demand in the market in 2023. Prices are already moderate in locations with such affordability, and these markets are poised to perform best in the coming decade.
Why single-unit homes are projected to sell like crazy in 2023
- Single-unit homes are more affordable.
- Millennials are the largest generation in the US, and many are single.
They’re more likely to be single than any other generation. This has led to a greater demand for smaller homes. Many millennials have not purchased homes because of high student loan debt, low wages, and high rent costs. Because there need to be more apartments around the country, many millennials opt to live in small spaces. Others rent rooms from roommates, share rooms with multiple people, live with family members after graduation or move back home after college. - Baby boomers downsizing to smaller spaces.
The Baby Boomer generation is downsizing their homes into smaller spaces. This is due to a variety of factors, including:- Aging in place – As baby boomers reach retirement age, they’re more likely to want a home that’s easier to maintain. A simpler lifestyle and easier maintenance are two reasons many baby boomers move from larger houses into smaller homes.
- Retirement communities – Baby boomers are downsizing into retirement communities with access to amenities like community centers, pools, and fitness facilities. These amenities can help make life more enjoyable while also minimizing effort on the part of homeowners who no longer want or need as much space as they did during their working years.
Single-unit homes are on the rise, and they will be around for a while. The combination of high demand from millennials and baby boomers, with less interest in homeownership among other generations (like Generation Z), means that single-unit homes are here to stay.
