Hot properties: high-tech condos

Brought to you by

Hot properties: high-tech condos
By Marilyn Bowden . Bankrate.com

To hold their value in the red-hot U.S. residential market, condominium units need to offer more than zero-entry swimming pools and personal Jacuzzis. High-tech amenities that will support emerging technologies in the coming years have to be part of the package.

A new wave of voice, video and data systems with names such as VOIP, WiFi and IPTV are creating a kind of alphabet soup that has to be carefully digested before a consumer can properly assess a condo unit's likely market value in the years ahead.

In a climate where several kinds of high-tech systems are vying for the same consumer base, it's the buyer who must exercise caution to avoid acquiring an abode that simply won't make the cut within a few years.

If a developer doesn't install some of these amenities during construction, "it can be cost-prohibitive or even technically impossible to do it later," says Carl Lender, vice president of sales and marketing for CSI Consulting, a South Florida-based firm that advises builders on emerging technologies. That, in turn, can sharply reduce a unit's resale value.

The condo boom
Condos are hotter than ever in urban settings around the country. In places like Atlanta, Chicago, Washington, D.C., and Miami the numbers show that more people than ever before are buying condos -- and paying higher prices for them.

According to the National Association of Realtors, or NAR, sales of existing condos in August 2005 -- the most-recent data available -- were up 14.3 percent over August 2004. And those figures don't include sales at new developments.

The most interesting change is the rising cost of acquiring a unit, says Kenneth Harney, managing director of the National Real Estate Development Center and a writer for The Washington Post whose column, "The Nation's Housing," is syndicated in papers across the nation.

"Condos," Harney says, "now have a higher median price than single-family, detached homes" -- an unprecedented phenomenon, he says, that remains startling even though high-priced units in the resort condo market pull the numbers up to some extent.

The median price for an existing condo sold in August this year was $226,800, NAR's research shows. Prices for units in new luxury buildings frequently top $1 million.

Buyers are no longer limited to young singles and empty nesters, the folks who dominated the market for years.

"We're seeing the beginnings of a baby-boomer shift from detached to attached living," Harney says. "Early boomers and pre-boomers are cashing in their equity from suburban properties for the conveniences of condo life."

Developers who say retirees don't care about technological bells and whistles are out of touch with the market, Harney says. While other factors such as price, location and security are bound to take precedence over high-tech features, he says, "a surprisingly large percentage of older people are very much tuned into communications technology.

"Any appraiser will tell you it adds not only marketing sizzle but actual value. So in a given price class, the building with no such amenities is in trouble."