On Thursday, the National Association of Realtors reported overall existing-home sales–including single-family, townhomes, condominiums and co-ops–declined 2.6 percent.

However, as MHN wrote, not all real estate sectors showed a decline.

• Single-family sales fell 3.2 percent.

• But condominium and co-op sales increased 1.7 percent.

Yes, condo and co-op sales are still below last year’s level. But the fact that they rose at all–as sales of other property types continued to decline–is good news.

As the single-family market continues to navigate through rocky waters, multifamily units are still moving for a number of reasons.

• Lower prices are making condos an even bigger value. Single-family and multifamily prices have already plummeted a fair amount due to slow sales and a growing amount of foreclosures.

That’s not to say multifamily units with lower prices are worth less: It’s just a result of what’s been going on in the market for months.

As lenders who are eager to unload properties they’ve foreclosed upon put them up for sale at drastically reduced prices, median prices in the area often decline. (It is, after all, a competitive market.)

And there are plenty of foreclosures to alter the market: Just last week, RealtyTrac said foreclosure filings rose 14 percent over the past quarter.

As a result, prices have fallen in many areas of the U.S. In some areas where prices have already fallen a significant amount–such as condo-friendly Palm Beach, Fla.–condos are selling extremely well.

In June, existing condo sales in Palm Beach grew 9 percent–that’s compared to 2007 levels. June was the third month in a row the area saw an increase in sales compared to last year.

Part of the reason the condos are selling so well is that they’re cheaper than they were a year ago. The median price has fallen 24 percent, dropping from $201,500 to $153,200.

• Cautious buyers could be multifamily buyers. Lower prices haven’t sparked sales everywhere in the U.S. In the past few months, experts have speculated that the bulk of potential buyers are waiting for prices to fall even further.

A recent NAR survey found about a quarter of potential home buyers are holding off on purchasing a home.

But buyer profit concern, along with tighter lending restrictions–especially for bigger loans needed to buy pricey properties–is good news for the multifamily market.

Buyers looking to spend less and secure a bigger return on their investment (for the most part, that’s everybody) are wise to consider a condo or co-op.

As the NAR numbers indicate, their resale value is stronger. According to the NAR, the national median existing sales price for single-family structures was $213,800 in June; the average condo sold for $224,200.

A Bright Multifamily Future

The increased demand for new multifamily units also indicates that their popularity with buyers–as well as with investors who are backing the projects–is on the rise.

Led by a 242 percent jump in the Northeast, construction of multifamily units increased 43 percent to an annual rate of 419,000 in June, according to the Commerce Department.

At the same time, single-family construction fell 5.3 percent, hitting its lowest level since 1991.

Why such a difference? There are a number of possible reasons: The investment potential a condo offers; a growing concern about buying large, expensive single-family properties that may not resell well down the line; higher gas prices that are prompting consumers to look downtown to avoid long commutes.

We many never isolate a single reason why multifamily properties have remained strong throughout the housing slump–but we do know that the strength of the multifamily market could help us get out of it.

Some, including NAR chief economist Lawrence Yun, are hoping first-time buyers will reinvigorate the market. Yun recently noted that roughly four in 10 properties are bought by first-time buyers, allowing pre-existing homeowners to trade up into a new property.

Because condos are a popular choice for first-time homebuyers due to their size, price and amenities, it’s entirely possible that the high demand for new condos and strong sales of pre-existing units could give the overall housing market a big boost.

Why do you think condos are still selling well? And what role do you think they will play in the future of the housing market?

Tell us what you think by posting below.

This week, the U.S. government said it would step in to help bolster Fannie Mae and Freddie Mac.

Despite the fact they each have access to a $2 billion line of credit from the government, the two mortgage companies are, for the most part, private firms. 

On Sunday, Treasury Secretary Henry Paulson suggested increasing that line of credit significantly. The Fed also said it would let the agencies borrow money at a special rate.

Déjà vu Rescue

This isn’t the first time the government has stepped in to assist a company this year.

Four months ago, the government–with no official congressional approval–utilized emergency rights to stop investment firm Bear Stearns from collapsing, a move that was most likely justified to prevent a global economic fallout, the Washington Post says.

And because the effect of the ongoing credit crisis is being felt on a global scale, government intervention isn’t limited to the U.S.

In September, the Bank of England stepped in to save U.K.-based lender Northern Rock, which had asked for help, creating the first run on a U.K. bank since Victorian Times, according to the Independent.

And–because no one is sure the global credit issues are close to over–the U.S. isn’t ruling out further intervention in its investment banks’ affairs, including:

• Additional funding. Last week, Fed Chairman Ben Bernanke said that the Fed might continue to provide emergency funding to other investment banks past the original September expiration date.

• Oversight rights. He also said that the Fed and the Securities and Exchange Commission have worked out an agreement that will allow the Fed to access investment banks’ private data.

A Friend to Fannie and Freddie

And now, the U.S. government is lending Fannie Mae and Freddie Mac a hand.

The agencies own or guarantee almost half of the $12 trillion in U.S. residential mortgage debt, according to Bloomberg.

For years, they’ve been an integral part of the housing market. And recently, in an effort to help correct the housing slump, they’ve been given greater access to it by being allowed to enter the jumbo loan market.

"The GSEs now touch 70 percent of new mortgages and represent the only functioning secondary mortgage market," Paulson told senators. "The GSEs are central to the availability of housing finance, which will determine the pace at which we emerge from this housing correction."

The government has quite a bit invested in their success–and good reason to make sure they don’t go away.

"Shares of Freddie have fallen and things are bad for them on paper, but in day-to-day life, it has not affected them at all," Susan Blumberg, senior vice president of NorthMarq’s Chicago office, told MHN. "We have a very strong working relationship with Freddie. The way we see it, the multifamily aspect of these companies has been very strong with low delinquencies. This is a knee-jerk reaction toward their single-family business."

And, if the government can help with some extra capital, the agencies should look even stronger soon.

There’s been a lot of news involving Fannie and Freddie lately; but many in the industry think most of the hype is unfounded, including Jerry Howard, executive vice president and CEO of the National Association of Home Builders (NAHB).

"Fundamental analysis and statements from top federal government officials point out that the hysteria in the markets regarding the viability of Fannie Mae and Freddie Mac is unfounded," Howard said.

And–government assistance or no government assistance–Freddie Mac is confident about the future.

"We continue to hold more than adequate capital reserves and maintain access to liquidity from the capital markets," Daniel H. Mudd, president and CEO of Fannie Mae, said in a statement.  "Given the market turmoil, having options to access provisional sources of liquidity if needed will help to strengthen overall confidence in the market. We will continue to do our part to provide liquidity, stability and affordability to the housing market now and in the future."

Which poses an interesting question: Should the government intervene more often in private financial company problems, like it did with Bear Stearns, or should it have a hands-off policy?

Some analysts say that as the U.S. economy continues to struggle and the global economy works its way through the current credit issues, government help will become more and more necessary to contain any fallout.

Others argue the government has no place monitoring private companies–or helping them with monetary infusions.

What do you think? Is it a good idea for the government to intervene in private company affairs?

Share your thoughts by posting below.