The Current State of the U.S. Condo Market: Dramatic Price Drops and Sales Decline

The U.S. condo market is experiencing a significant downturn, with prices and sales plummeting as rising HOA fees and insurance costs weigh heavily on homeowners. This stark contrast to the single-family home market, where prices have increased by 0.5%, highlights the unique challenges facing condo owners and potential buyers.

Condo Prices and Sales Trends

• As of May, the median U.S. condo sale price decreased by 2.2% year-over-year, landing at $354,100—making this the second-largest drop recorded since 2012, according to Redfin’s analysis of MLS data.
• The only larger drop occurred in April 2023 when prices fell by 2.9%.

The key factors contributing to this decline include:

• An oversupply of sellers: Approximately 80% more condo owners are looking to sell than there are buyers.
• Rising costs: Increased HOA fees and insurance premiums, alongside hefty special assessments being levied by homeowner associations.

“The condo market has been particularly hard hit amidst a generally slow housing market,” notes Aditi Jain, a Redfin Premier real estate agent in Boston.

Decline in Condo Sales

In addition to falling prices, condo sales plummeted by 12%, outpacing single-family home sales, which fell by just 3.7%. This slump marks the largest decline for condos since June 2024, and sales reached the lowest numbers for May since 2020.

Here are some critical data points:

• Days on Market: The average condo took 46 days to sell in May, the longest period since 2015, while single-family homes averaged 38 days.
• Record Supply Levels: The total number of active condo listings surged to its highest level in a decade, signaling that properties are lingering on the market.

Why Are Buyers Hesitant?

Many potential buyers are now viewing condos as risky investments due to the factors mentioned above:

• Rising HOA dues
• Special assessments for maintenance and repairs

Market Challenges in Florida and Texas

Florida has emerged as the epicenter of this condo slump. Some areas have witnessed drops in price and sales exceeding 30%.

Here’s a breakdown of some of the most significant declines:

• Deltona, FL: Median sale price dropped 32.2%
• Crestview, FL: Down 32%
• Houston, TX: Down 23%

Notable Sales Trends

The downturn is not just in prices but also in sales:

• Dallas, TX: Experienced a staggering 33.3% decrease in condo sales.

Many areas in Florida have been negatively impacted by:

• Increased regulation following the Surfside condo collapse.
• An influx of inventory due to the pandemic homebuilding surge.

Opportunities for Buyers

Despite the downturn, condo buyers might find favorable conditions:

• Sellers might be willing to lower their asking prices or offer concessions.
• Many condos are currently listed below their asking prices, leading to potential negotiation leverage for buyers.

Resilience in Other Markets

Contrasting the broader trends, some markets are faring better:

• New Brunswick, NJ: Saw a notable 14.9% increase in condo prices year-over-year.
• Indianapolis, IN: Recorded a 27.3% year-over-year increase in condo sales.

Summary of Key Metrics for the U.S. Metro Areas

As the condo market continues to adjust to economic pressures and buyer hesitancy, potential buyers and investors will need to stay informed about regional trends that may affect their purchase decisions. For more detailed statistics and updates on the housing market, Redfin provides comprehensive analyses that can guide prospective buyers.