Purchase-Price Bubble, Soaring Insurance and HOA Fees Weigh on Demand
Condo Prices Fell 1.9% in September–October
Single-Family Homes Still Rising, Though at a Slower Pace
The U.S. condominium market has entered its deepest downturn in more than a decade, according to recent data. Condo prices recorded their steepest annual decline since 2012 earlier last year, while prices for single-family homes continued to rise year over year, albeit at a slower pace.
The weakness in the condo market reflects a combination of structural shifts in housing demand and changing buyer preferences. Many condo developments are located in urban cores, where appeal has diminished as remote and hybrid work arrangements have become more common. Demand has also softened in second-home markets that had previously fueled condo sales. At the same time, sharply higher insurance premiums and rising maintenance costs have driven homeowners association (HOA) fees significantly higher, adding to affordability pressures.
“Rising HOA fees are giving many buyers pause,” said a Portland-based real estate agent. “Homes are simply taking much longer to sell.”
According to data from Intercontinental Exchange (ICE), national condo prices fell 1.9% year over year in September and October, marking the largest decline since 2012. Zillow analysis shows that more than 10% of condominiums nationwide were estimated in November to be worth less than their most recent sale price. In nine major metropolitan areas, that figure exceeded 25%.
Regionally, oversupply has weighed on prices in Texas markets such as Austin and San Antonio. In Florida cities like Cape Coral, higher insurance costs and hurricane risks have dampened buyer interest. On the West Coast, including San Francisco and Portland, price declines reflect downtown areas that deteriorated during the pandemic.
By contrast, the single-family housing market has remained relatively resilient, supported by persistent buyer preference and limited supply. As of November, only 4.5% of single-family homes were estimated to be worth less than their last sale price.
Industry experts note additional challenges for condo owners, including difficulties securing mortgages for units in buildings that require major repairs or lack adequate insurance coverage. “With properties sitting on the market longer, many owners are debating whether to cut prices further, wait it out, or convert units to rentals,” one real estate professional said.
