The trend toward condominiums has been around for a number of years and reached a peak a few years ago among young professionals, empty nesters, people looking for second homes and vacation get-aways and those looking for investments.
That trend led to a significant amount of condo building in Mississippi and elsewhere. Developers across the country observed that many condo buyers wanted the square footage of the average single-family home (2,456 square feet) in a condo. Realtors in Mississippi have not found that to be true.
John Phillips, the Mississippi Association of Realtors’ vice president of professional development, considers the state’s condo market over built. “It’s a huge problem,” he said. “We’re seeing prices drop like rocks and they’re still not selling.”
Oxford has had a significant amount of growth in condos, much of it revolving around University of Mississippi students and alumni. According to Carolyn Kessinger of Kessinger Real Estate, the Oxford condo market was down approximately 40 percent in 2008 from the previous year.
“Most people do not want a condo the size of their primary single-family homes,” she said. “We find the location of the condo more important than its size. From our perspective, condos under $200,000 are selling the best.”
The Jackson market is different. Clint Herring Jr., president of Kerioth Corporation, finds that young buyers do want their condos to be the size of average family homes. However, empty nesters and single buyers are looking for smaller condos.
“Looking at the inventory of condos in this market, I would say there are three classes of condo sizes,” he said. “They are 1,100 to 1,200 square feet, 1,850 to 2,200 square feet and those over 3,000 square feet.”
Herring also noted that condo buyers like a flexible and maintenance-free living environment that offers amenities within walking distance of working and shopping.
On the Gulf Coast where the once rapid building of condos has slowed to a crawl, Mike Boudreaux said the pros and cons of condo living are still debated. He’s president of Gulf Coast Investment Developers and involved with numerous condo projects.
“Nowadays, because of the increasing population and the decreasing available land, homes are getting smaller and the trend is to go up — meaning vertical subdivisions or condo towers,” he said. “Condos are becoming more popular and the home of choice many young professionals and young couples just staring out want.”
He said location, lack of upkeep, amenities, socializing opportunities and the investment factor are the key selling points of condos.
“Often, buying a condo is a good alternative for those looking for a large piece of real estate but who do not have the funds,” he said. “If you want to buy a 2,500-square-foot home, you may not have the funds for it. On the other hand, it might be within your budget to buy a condo that provides 2,500 square feet of space. In fact, there are some pretty good deals going on in the condo sector of the real estate market right now that savvy shoppers are happily taking advantage of.”
Boudreaux added that the typical primary condominium is a two-bedroom, two-bath unit that averages approximately 1,200 square feet. Because they are typically purchased by young professionals and retirees, there is no need for greater space.
He also pointed to the condo-tel concept being used along Beach Boulevard on the Coast.
“These are suites with sizes of 500 to 900 square feet with one bedroom, two baths and pull-out beds in the living area and bunk beds in the entry way,” he said. “This unit can accommodate two couples with children. It’s a good replacement for the hotel and motel rooms that were destroyed in Katrina and not replaced. They are marketed to investors.”
Although there has been a great deal of sentiment to get away from the water since the devastating 2005 storm, Boudreaux said the idea of living on or near the water is still keen on the Gulf Coast.
“Condominiums along the waterfront can survive Katrina-type storms if built to current codes,” he said. “These units are two and three bedrooms with sizes of 1,260 square feet and upwards to 2,400 square feet. They will have lower insurance costs than most homes built at grade and have the benefits of living on the water without the hassles of home ownership.”
Contact MBJ contributing writer Lynn Lofton at email@example.com.