A comparative study of condominium and single family house price appreciation in the Salt Lake Valley

Abstract

This study examines whether the form of ownership affects the appreciation rate of housing units. The specific test conducted is whether condominiums and single family homes in the Salt Lake Valley have appreciated at the same rate over the past six and a half years. To test this hypothesis, a sample of 10,134 condominium and 48,913 house transactions was analyzed. The sales were grouped into eight geographic analysis areas. Hedonic models were used to quantify the contributory effect on value of the time of sale, age of the unit, and other significant housing characteristics. The price indices created by the hedonic models for each housing type are then compared within geographic areas and across the valley. The paper shows that condominium price appreciation is significantly below the appreciation of single family houses in seven of the eight areas examined, which represents 80% of the sample. Valley wide regressions were then conducted utilizing geographic dummy variables for the individual analysis areas. These models indicate a strong premium for units of both housing types located in the downtown area.