Khater says that the absorption raternhas increased in part because condo prices have normalized in two importantrnways, both of which will draw more condo buyers back into the market andrnencourage more construction.</p

First, the price of condos relativernto single family detached home values has declined over the last few years andrnis back to levels of the early 2000s.  Atrnthat time both condo and single family median prices were around $138,000 butrnas the market began to overheat condo prices rose much faster than singlernfamily home prices.  By March 2008 thernmedian condo price was 37 percent above the median single family detached homernprice.  Once the market started to coolrncondo prices fell fast and by July 2013 the median condo price was 1 percentrnbelow that of single family homes.  This relativernrelationship has continued thus far in 2014. rn</p

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The normalizing ofrnnew condo price premiums relative to existing condo prices has taken longer</bthan that between condos and single family houses.  Khater said this is particularly important becausernof its influence on the demand for new condos, a demand that was lacking untilrn18 months ago.  From 2000 to 2003 newrncondo prices sold at a 29-percent premium over existing consos but the housingrnboom then pushed up existing prices much faster and reduced the new pricernpremium to 5 percent by 2005. </p