House vs. Condo
Los Altos house prices have been climbing faster than Los Altos condo prices since 2020. The possibilities are: more expensive properties grow faster, condos are less desired than previously, economic impacts affect condos differently than houses, or specific government policies have impacted condos.
Los Altos House vs. Los Altos Condo
Los Altos House vs. Townhouse
Examining Los Altos house price trends vs. Los Altos townhouse trends shows that Los Altos townhouses have not been affected nearly as much.
Possible Causes
Both townhouses and condos typically have HOAs, so that would not appear to be the cause. Not all townhouses have private yards. They are likely to have a porch and perhaps a patio. Increasing desirability for personal outside space may be part of the flat prices for condos; however, many condos have balconies.
What probably is the root of the cause is that condos have the lowest price between houses, townhouses, and condos.
When a small builder decides to build a new house, he prefers to build a large luxury house rather than a small or mid-range house. Small builders believe their profits will be greater when building a large luxury house.
However, there are government efforts to increase the production of lower-cost housing. Government incentives and mandates have disproportionately increased the production of condo projects and simultaneously driven the production of below market price condos.
The Future
Higher interest rates have already dramatically reduced the number of new condo projects. How government policies will be adjusted is unknown. The government’s desire to influence more housing has not changed, just the affordability of that influence.