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  Home  >  Communities  >  Lexington  >  Lexington Market Review  >  Condominium Market Summary

Summary

The condominium market is small when compared to the single-family home market with 43 condominiums selling in 2024 compared to 262 single family homes. There are few standalone condominiums (for example in 2 or 3 family dwellings) in Lexington. Both existing and new construction condominiums tend to be grouped into “communities” that offer many shared services. Providing these services typically raises the condominium fees.

Average condo association fees in 2024 were $568/month. If we compare these fees with Arlington, which had 180 condominium sales in 2024, primarily 2/3 family homes, the average condo association fee was $279/month, we can begin to see why even with a lower average sale price the Lexington condominium market has been considerably weaker than the single-family home market.

The biggest issue facing existing condominium owners is the large number of new construction condominiums being planned within the Village and Multi-Family zoning districts defined to comply with the MBTA Communities state legislation. The exact number and completion dates of these new condominiums is still unknown as many projects are proposed but pending approval and the towns response to the MBTA legislation is subject to a citizen’s petition. But it is very likely that Lexington will see hundreds of additional condominiums being built within the next 5 years.

In addition, a large number of “condominium style” rental units are either approved (512 units on 331 Concord Ave and 17 Hartwell Ave) or proposed (430 units on 3,4,5 Militia Drive and 7 Hartwell Ave). It is very likely we will see over 1,000 additional rental units (the existing Avalon communities comprise 585 units) being built within the next 5 years. These additional units will put downward pressure on both condominium prices and rental returns in the medium/long term.

Condominiums Listed

The number of condominiums listed in 2024 was 45 compared to 56 in 2023.

In 2023 the single-family market saw an 11% reduction in homes listed due to sellers postponing their sale, but condominium owners continued to list with a similar number of existing condominiums listed in 2023 as in 2022. Condominiums could not escape the effect of high interest rates indefinitely. 2024 saw a reduction in listing of both single family (8% lower) and condominiums (18% lower) as owners postponed moving because of the high mortgage interest rates.

Even though condominiums are often seen as a stepping-stone to a single-family home and the reduced living area of the condominium compared to single family homes forced many homeowners to consider moving as the home no longer met their requirements, but the high interest rates and low inventory put a hold on these moves.

Condominium Sales

The number of condominiums sold in 2024 was 43 compared to 55 in 2023. Condominium sales are generally split into two groupings. The older developments – Potter Pond (1980’s), Fifer Ln/Drummer Boy Way (1970’s), Emerson Gardens (1960’s) etc. and the newer developments – Lilly Pond Lane (2021/2022), Jefferson Dr (2019/2020), Robinson Rd (2018) etc. Given this split, in prior years, we see a relatively static number of existing condominium sales with the new development communities driving the peak in sales volume when they come on the market. This changed in 2024 as the number of existing condominium sales declined 21%. This decrease is caused by continued high mortgage interest rates and the associated reluctance of sellers to swap the very low mortgage interest rate on their current home for a higher mortgage rate on their next home.

Sales Price to List Price Ratio

One of the strongest indicators of demand and realistic pricing is the ratio of the sales price to the list price. An average ratio of over 100% means that there was competition, resulting in buyers paying more than the asking price.

The Lexington condominium market has seen this indicator at approximately 100% throughout 2013-2021. 2022 saw this indicator rise to 104% when we aggregate over the full year.

2023 saw this ratio decline to 102% as high interest rates affected the overall buyer sentiment. But with limited inventory and buyers able and willing to enter the housing market, having to bid house prices higher this 102% continued in 2024 as market condition and interest rates were largely unchanged from 2023.

Average Days on Market

Another indicator of demand is the length of time homes are on the market, known as “Days on Market”. Homes were on the market for an average of below 30 days days in 2021 through 2024 before going under contract. In 2024 this rose to 31 days as high interest rates affected the overall buyer sentiment.

Average Sale Price (Existing Condos)

Between 2017 and 2020 the average sales price for existing condominiums showed a worrying trend. We saw a 5% reduction in the average sales price in this period. Prices did rebound in 2021, and this continued into 2023 and 2024. The average price of an existing condominium in 2024 was just over $900,000, an increase of just over 2.5% compared to 2023.

We believe that high condominium association fees were the key reason for the slower performance of the condominium market compared to single family homes.If we compare the Lexington to Arlington condominium markets – average sale price and average floor area are comparable – the average condo association fee in Lexington is over double the corresponding average fee in Arlington. With the potential for a large number of new construction condominiums being built over the next 5 years we expect the slower price appreciation to continue in the existing condominium market in the medium and long term.