U.S. Condo Market Suffers Its Sharpest Decline in Over a Decade as HOA Costs Surge

By MB Daily News
Miami, FL

The U.S. Condo Market Hits Its Weakest Point in Over a Decade

The U.S. condominium market is experiencing its most difficult period in more than a decade. During early fall, condo prices recorded their largest annual decline since 2012, driven by rising homeowner-association (HOA) fees, escalating insurance costs, and weakening buyer demand.

According to industry data, U.S. condominium prices fell 1.9% year over year in September and October. This downturn contrasts sharply with the single-family housing market, which continues to show modest price growth.

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Growing Financial Pressure on Condo Owners

Condo owners across the country are facing difficult decisions as properties remain listed longer and buyer hesitation increases. Many sellers are now debating whether to remain patient, reduce asking prices, or convert their units into rental properties.

Monthly HOA fees—ranging from less than $100 to more than $1,000 per month—are increasingly deterring buyers. These fees typically cover insurance, structural maintenance, and shared amenities, but higher insurance premiums have sharply increased overall ownership costs.

Adding to the challenge, mortgage approvals have become more restrictive, particularly for older condominium buildings or those lacking sufficient insurance coverage.

Florida and Urban Markets Hit the Hardest

Post-Surfside Regulations Reshape Buyer Confidence

Following the 2021 Surfside condominium collapse in Florida, lenders and regulators have imposed stricter oversight on condominium buildings nationwide. New structural inspections and reserve requirements have increased financial pressure on older properties, especially in Florida.

In several Florida metro areas—along with markets such as Austin, San Antonio, San Francisco, and Portland— more than 25% of condominiums are now estimated to be worth less than their most recent sale price.

Downtown-focused condo markets have also softened as remote and hybrid work arrangements reduce demand for urban living and second-home purchases.

Condo Price Declines vs. Single-Family Homes

While condominium values have declined, single-family homes continue to outperform due to limited inventory and sustained buyer preference for standalone housing.

Despite recent declines, the typical U.S. condominium is still valued approximately 43% higher than its last recorded sale price, reflecting the long-term equity gains many owners have achieved.

Sellers Choose Patience Over Price Cuts

Nearly 7% of condominium sellers removed their listings in September, the highest rate for that month since 2015, according to Redfin. Many of these properties had been listed for more than 120 days, with nearly 20% at risk of selling at a loss.

Market analysts describe the current environment as a standoff, with sellers unwilling to lower prices significantly and buyers remaining cautious amid economic uncertainty and elevated interest rates.

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Key Takeaway for Investors

As the U.S. condominium market navigates its weakest cycle in more than a decade, investors are increasingly looking beyond traditional markets. Emerging regions with lower ownership costs, newer construction, and strong demand fundamentals are becoming attractive alternatives for long-term capital preservation and growth.

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