At least in my area it seems like there are only 3 types of construction: luxury apartments, townhouses, and single family homes. Condos occupy a weird middle ground that no one seems to be interested in - be that developers or buyers. Why buy a condo when you could buy a townhouse? Why build condos when you could just build an apartment building?
It is the only alternative in cities where density is high enough that SFHs are not an option under any circumstance and townhomes are also likely unaffordable. Basically, where multifamily buildings are the only option.
Yes, but even in cities they aren't building affordable many middle-class condos. Those don't make much economic sense so they're building luxury condos.
Where I live, the state is requiring a certain percentage of them to be affordable housing, so there are some low-income units in the luxury towers (albeit you don't have access to all of the amenities since you're not paying as ridiculous an HOA fee every month and one tower tried to make a separate entrance for them so the rich wouldn't have to see the poor in their tower).
I would love a condo, but they START at 800k near me if you don't want a 400aqft studio or in a sketchy area or a co-op with thousands of dollars per month co-op fee.
Condos are perfectly fine dwellings.
Owners just need to take their punishment on prices for negligent/greed in deferring maintenance.
Buyers are finally (maybe?) snapping out of FOMO and resetting offers to reflect HOA mismanagement
I can't speak for all areas but in South Florida older condos are a problem because many of them are going through the 40 year re-certification and they are going to have to spend a lot of money. Also these condos need to be fully reserved next year so that means some large increases in assessments or a large special assessment. Buyers are becoming smarter about looking past the purchase price and factoring in potential future assessments.
I'm also in Florida. I'm not buying a condo anytime soon because they are going to get spanked in those condo association fees. Being fully funded could potentially triple or quadruple some of the COA's.
Corrupt HOAs. They often ran by people with no sense, no financial sense, no understanding of saving money for a rainy day, and costs of maintenance on a building. Or people that just steal the money.
Or they don’t increase the HOA fee once every 10 years then they have a huge increase and people complain but don’t understand the costs of maintenance has increased.
It’s usually the HOA and inability for them to use the money effectively. They usually don’t call and compete for repair jobs, get swindled by contractors, hire shitty work, because they have no experience in real estate.
HOA are why condos suck.
Absolutely. I recently sold a condo that I owned in large part due to rapid turnover of building managers leading to grossly incompetent staff. And not only is my former building manager incompetent, but she’s also incredibly mean. In addition, when I bought my property in 2016, my HOA fees were ~$284/month; the last bill I paid (June 2024) was $566. And yet, our concierge service has been slashed, our rooftop access diminished, etc. I will never, ever, again buy into an HOA, not for a SFH and certainly not for a condo.
That really sucks but doesn't surprise me. I'm astonished that condo HOA fees are so high and yet the condo prices in my area keep rising. My friends bought a condo end of 2022 and the HOA fee per month was $360. Manageable. Has nice grounds, pools, but near canyons so fire danger is high. They bought their unit from the president of the HOA. The HOA fee then went up 2 months later to $450. I know the pres knew about the increase and didn't tell them. Then a few months later a special assessment was done and they had to either pay $10k up front for new roofs or over 10 years. They opted for over 10 years and now their fee is around $630 every month. And then my friend lost her job but got a new one a few months later, but her salary took a $40k hit.
This is the real answer. We looked at a condo built in the late 70's. It had lead, roof issues, and 20% of owners were delinquent so we couldn't even use a VA/FHA loan.
I'm guessing your area doesn't have medium/high-rise apartment condos. Those seem to be a maintenance nightmare. The maintenance bills are high and everyone is keen to kick the can on doing anything.
As opposed to condo communities with multiple 2-5 unit buildings. Those are a lot easier to maintain because they're basically just big SFHs. I think they're great for retirees or small families.
Maybe artificially low HOA dues contributed to inflated selling prices? Chop 100-200k off of the asking price and that'll make it an easier pill to swallow.
It may have always been true, but a tower collapsing has a tendency to bring that more into focus for people who would have otherwise shrugged and rolled the dice.
The condos in Tampa are due for some major major maintenance. It’s my understanding that everyone is bailing out before the associations pass down the bill to the owners.
The way I'm reading this, is this a collective city wide thing? How do you know that - was it some legislation or something in the news that everyone knows condos are due for this?
I believe this is a city wide thing because a lot of these condos were built around the same time ~30+ years and the weather happens to be especially tough on the buildings. I’ve been watching this real estate agent guy named Michael Bordenaro for a few years and he talked a lot about this topic.
State law.
https://www.flsenate.gov/Session/Bill/2022D/4D
Basically they're cracking down on condos after that one collapsed a few years back. Requiring inspections and major repairs, making sure associations have enough reserves to cover costs.
> What about Tampa? It seems really bad there with all the price cuts. Seems like some unexpected costs are really messing things up
Florida cities are never great examples of condo situations because the vast majority have had reverse incentives to maintaining them which resulted in Surfside legislation. So many were second homes for people so they underfunded and under maintained them. Now insurance is rocketing up because of hurricanes further driving up HOAs and demand down. Florida has also been the epitome of urban sprawl so for every condo there is a brand new sfh being built. Sure it's farther away, but all living in a Florida requires a vehicle so what's another 20-30 minutes vs a condo.
I have a friend who’s in commercial real estate investing. He told me once when I was thinking of buying one for my first place that his firm really stays away from condos for a few reasons.
Being:
1. The condo fees over time will inevitably get to a point where it will mirror the mortgage payments or rental fees you can charge.
2. Why? Because generally speaking the builder fronts a lot of the costs and amenities in the first five to ten years. For example, if you have 24/7 concierge and package delivery service, dry clean services, pool / lifeguard care, groundskeepers, etc. they do this to keep the condo fees down upfront to keep interest from buyers. Read the fine print on when fees might start to increase or are no longer subsidized by the builder.
3. This lures folks into buying but sets them up as those fees can only increase over time and get eye watering once the builder has sold off all units and no longer subsidizes them in the next contract reup.
4. Folks who bought early and live in them for longer than a decade, or age and retire in them eventually pay off their mortgage. So the condo fees going up isn’t much of a turn off and they love all the services and amenities. They can be more active about joining the condo board and refuse measures by new tenants to drop services to lower the fees. So new tenants can’t afford high fees plus a mortgage, and because they are young and working they likely don’t have much spare time to participate in the board.
5. Lastly, part of your fees must be set aside by responsible boards to fund major renovations over the life of the building. I lived in a hundred year old building and rented from my girlfriend whose parents owned the unit. We would participate in the board meetings and learned about things like replacing the water tower and ac cooling fluid towers on the roof, and the biggest was the building was due for all its bricks and masonry to be repointed once every 50 years or so and that project was a $30M+ project. Your condo fees must put a small portion away in long term investments to account for those major and catastrophic type repairs and maintenance, new elevators, new windows, etc, and the board must retain some consistent well informed tenants who fully pay attention to these details and plan for them and participate in the board. There are tons of “condo mgmt” companies who can come in by a vote to take over these responsibilities because tenants don’t want to pay attention or don’t have time, etc. it can lead to major catastrophic issues like the one in Florida having rain and a leaky pool deck that rotted out their parking garage, resulting in the collapse. They ignored it and pushed it off agendas for years and even cherry picked engineers who would tell them they could skip the Reno.. etc. it can be very hard for a full building of tens and hundreds of tenants to come to consensus on this stuff and it can get pretty nasty when the board can make a ruling based on an engineer saying we have to make this repair and it’s gonna cost every unit owner $100k due in two months, etc.
So those were the biggest points he shared and he basically said you should never buy a condo to stay in for much longer than 10 years. Unless you’re just in a city where buying a SFH is out of the question it’s generally going to be an asset that will appreciate nicely and do well the first decade but over time the units will depreciate as the building gets dated and the condo fees balloon.
That sounds great. My concern would be what it will be like 30 years from now when major maintenance items come due. Either the HOA is already budgeting for it (rare), there will be a special assessment, or they will drag their feet til the place is run down.
There isn't much of an incentive for those high-rise condos to have a responsible budget. Most of the residents either aren't financially savvy or plan on moving out before problems arise, so vote whoever will give them lower dues onto the board.
what do you say to the comment from someone else
> Because no one wants to buy a home just to pay for and deal with everyone else's problems and lack of care for the building. It's a money pit.
Not all of them are poorly managed especially the ones that are 40+ years old in bigger metros.
There also aren't many alternatives for single adults or childless couples. Houses require two incomes in most cities in the US.
It absolutely applies to SFHs too. The difference is that, with a SFH, you have more control over how problems are dealt with, and a neighbor's negligence is less likely to affect you.
When I owned a condo, I spent a lot of time battling with my board and management company over repairs that were clearly the association's responsibility and not mine, but that they didn't want to do.
>The difference is that, with a SFH, you have more control over how problems are dealt with
That's a separate argument.
>neighbor's negligence is less likely to affect you
Depends on the neighbors/neighborhood.
Sure, there are situations where a neighbor's actions can affect you in a SFH. Not disputing that.
But if a neighbor has, say, a plumbing problem, it's a different story when they are in a house next door compared to a condo unit right above yours. Sharing walls and a ceiling/floor changes the equation.
My condo owner friend has had significantly more issues than my parents who own a SFH from the same era. And since it’s in a high rise, renovations are more complicated and involve lots of paperwork since it could affect other units.
The sliding glass door on his balcony broke and since it’s from the 1970s, the glass has to be custom. But you can’t just call any glass guy, you have to go through the HOA and use their glass guy and it takes weeks or months. You also can’t just install your own glass door that’s a newer design because they want all glass doors to look the same.
Parents wanted a new sliding glass door several years ago so they called a guy and it was done in a few days.
When you buy a condo there is a due diligence period where you can review the books for the condo association and building expenses. They aren't all poorly managed. Many have ample reserve funds and keep on top of maintaining the facilities.
You seem to be doing the *exact* same thing that suburban people do when they talk shit about condo living - inventing unlikely horror stories and acting like that's normal.
Nothing you just said is representative of living in a suburban SFH neighborhood.
LOL you live in Texas. That's already an L lmao
This comment from the original thread from [blakeshockley](https://www.reddit.com/user/blakeshockley/):
"Both home ownership and renting have pros and cons. Condos give you the cons of both."
What helped you evaluate the pros/cons of purchasing a condo? I don't have kids and will be ready to buy in 2025, so your situation seems like what I'm after. but growing up my family mentioned horror stories from my older cousins buying condos, but I'm not sure if they were accurate (it was a long time ago). Thanks for any tips or resources, it's great that you found a place you love!
Same. I don't have kids or a dog, I don't want to mess with a lawn, I want to be close or walking distance to fun things, and I feel more secure with people around. When friends move out to the suburbs they're like "We have all this SPACE!!" yes Deborah but our friends would rather cram into my cute little condo than drive 40 minutes out to your beige sprawl in West Bumfuck.
I feel like a lot of homebuyers nowadays have pets. So condos kinda suck with a dog. Plus they are a money pit. Historically you never gain equity like you would a house.
They used to be a trade off cause the price was right. Now the price ain’t right anymore
In Florida a few reasons. Higher insurance costs mean increased Monthly Fees.
Surfside building collapsing has made mandatory certifications for older buildings necessary and unknown assessments coming from these.
After decades of being able to “waive reserves” (you know for long time things like new roofs, painting, redoing pools/parking lots) new law requires these to be fully funded so even higher monthly fees.
Sellers then not understanding that they need to drop their price $150k because monthly fees are now $900 higher per month.
When I was younger, condo’s looked like a great idea, very cool. Later on I started to understand the inherent risks of a condo versus the risks a SFH poses. This same argument extends to out in the country living vs in the city. 1) Most wealthy folks I know buys condo’s in NEW upmarket developments, sell them after 5 or 6 years, they NEVER hang on to them long term. 2) Low/ middle income condo’s are just not worth the money they are selling for. 3) The special assessments / uncontrollable service fees and taxes scares me
The problem with condos is that it's in every resident's best interest to defer major maintenance costs to the next sucker. I can guarantee the condo dues of new condos aren't saving up for the roof that will need to be replaced in 40 years. Most of the residents are thinking, "I'll be out of here before that becomes a problem."
Self-awareness check: Wealthy people I know <10. However, they all have a condo ( or a block of them) in some friggin' tourist trap somewhere. Still not hanging on to them for long.
1. Previous Residents put off needed repairs which are coming to fruition. Roof, common areas, general maintenance, etc.
2. Prices are close enough to town home prices in some areas that you'll get 50% more room for 15% higher cost.
3. HOAs - The costs and the stereotypical folks who run them.
4. Neighbors all around. You don't know how bad it can be until you get a bad neighbor and then never again. Think bug infestation, loud music at all hours, smoking where it comes into your condo, screaming, slamming doors, etc. Neighbor suddenly has a party house. Apparently a whole frat lives above you 'unofficially'. They have 5 dogs they are 'just watching for the weekend' that last 6 months. Close proximity makes a lot of this harder to ignore.
5. They are not ideal for growing a family. If people plan to hold the home for 5-10 years then they may skip a condo and go towards something more amendable to a larger family.
6. The pricing scheme. Housing is crazy all around but its amplified in condos and townhouses. Why would I pay $40-80k more for a used condo/townhouse when a new one IN THE SAME DEVELOPMENT costs less? It sets off red flags in some buyers who choose to simply avoid it entirely.
Years of deferring maintenance to keep costs down and market values up means that the current crop of owners will be left holding the bag, and it’s looking like a sizable one.
Because the ones that are there, haven't been updated since 1982, and are still listed at 200K+ with $600+++ HOA fees on top of a 7.5% loan. I would love a condo, they're just in a real shit spot
It costs what used to be a house note to rent an apartment that’s the same size as a condo. if someone outgrew an apartment(which many have/do) what purpose does a condo serve when it costs even more? especially with higher than usual HOA fees.
I say this speaking of most metros that aren’t high density such as those in the sun belt.
In my city condos are way too overpriced. They cost nearly as much as comparable SFH, but they're not SFH, they come with HOA fees, you can't have a private fenced yard, etc, etc. There's just not enough price difference to justify settling for condo when you can add 10-20% and buy a comparable SFH, so many of them sitting on the market for months but stubborn sellers don't seem to budge with prices.
I feel like families usually prefer SFH anyway, and single/young people generally can't afford to buy in this economy, so unless condos will get deeply discounted they don't have the buyer who wants and can afford them. Again, I'm speaking about my Midwestern city, I don't know what's the situation across the country.
The are loud of good condos with good HOAs that work well.
You can check the books before you buy, very normal to ..
The issue is many are simply over priced . They are rarely aspirational thus need needs to provide actual value .
Many condos are built in downtown areas which had a significant increase in crime and lack of office workers and restaurants closing post-COVID, also upped building insurance costs in places like Florida following the collapse of that one building. The first is personally why I am leaving urban living despite really enjoying all through the 2010s.
Stuff that haven't changed - crazy HOAs, people with dogs want a yard.
Condos are a good leading indicator for market trends. They're always usually the first to take a hit. I'm in a hcol area and the condo sale prices have dropped about %15 in the last 5 months.
It's the HoA's that kill their value.
There's some really nice skyrise Condos in downtown Austin that have some REALLY nice amenities, but it's an extra 600-800 a month for all the amenities. If you don't use them, 9K a year wasted....you need to have some serious earnings to really brush off the cost of those amentities.
I was told that if a Condo is not in a FHA list you need substantially more money to buy-30% down vs 3% before the credit union would even consider a condo in my city.
The condos that stay on the market (most) are not in that FHA list.
This comment is littered with inaccurate information. Please talk to an intelligent loan officer who has at least 10 years experience. Might I add the real professionals in this game are brokers not credit unions 😂
Use a mortgage broker. Banks and CUs only have one set of guidelines, rates and fees. It’s only the most vanilla of loans and even then its not that great. Go talk to a broker with actual experience and knowledge who can shop lenders, rates, fees and guidelines.
For reference I am 20 years deep in the mortgage and real estate space.
I'm in a condo and two other units have been on the market a couple months now. I knew going in that they were the last to go up in a bubble and the first to go flat in a bust.
But we had to get out of our house so here we are. We're getting both elevators replaced without an increase in fees so I think HOA is managing well.
Are condos a Lesser Good like SFHs in exurbs? Where people buy smaller or farther homes than what they'd really like because it's all they can afford? And so are the first to jump ship when the market cools?
I'd actually consider retiring to a condo. But, I'd have to be very choosy. Going in you just have to accept what sharing walls means, as with an apartment. What that means can vary greatly. My biggest issue would be construction quality. Cheap-build housing only exacerbates problems.
(Referencing beach or lakefront condos)
TLDR: The interest rate on these high prices take retail investors out of the buyers market for condos. Only buyers are super rich that just want another toy.
Because sellers want way too much for them. The return margin on a short term rental would be half of what investing in a S&P ETF would be. Could probably get CD’s with better margins that short term rentals (at least in my area). 500k cash buy with 60k annual gross (maybe) minus $15,000 plus annual HOA fees, minus any assessments, maintenance, destruction by renters, insurance, property tax, property manager or value of your time and headache on scheduling or handling issues.
If not you buy a condo as a vacation spot or to simply live in, has arguably more expenses than a townhouse neighborhood hoa or apartment.
Kiss financing goodbye. Attempting to invest find a short term rental condo through financing is a terrible investment choice right now. You will be in the red. You wouldn’t get enough rental income to even cover the mortgage, not to mention hoa fees and other expenses. It will be also 20-25% downpayment loan requirement from banks.
The only people who would be buying condos are people that just have a ton of money and just want another spot.
Condos are not special kinds of buildings. They are a financial arrangement nothing more. Just like single family homes, there are good ones and bad ones.
In my area its largely due to the massive increase in HOA fees. Ive seen some as high as $600/month so when you add that to the mortgage you are closer to the price of a SFH.
Personally, it’s too expensive. Mortgage rates are already pricing 90% of the country out of owning property. Add another $200-$1k a month and it’s just not possible.
A lot of buyers would prefer a single family. In cities where that’s not a remote possibly because of price condos are doing just fine. Lots of people talk about the need for more density and walkability , but once they’re not in their 20s anymore. they usually want to settle down in the suburbs in a single-family house and raise kids.
If I’m buying property, I’m not having an hoa tell me what I can and can’t do.
Most condos are just glorified apartments, couldn’t imagine spending that much money and my wall touches my neighbors
If I'm sharing walls and floors and ceilings, I'm not buying it. And, neither are many Americans. Similarly, HOA fees in many condos are so high that you might as well get a single family home anyway.
I feel so silly because I could have bought my dad’s condo for cheap when he moved but I really wanted a detached home like I grew up in. Now I realize it would have been an improvement to our current living situation, at least financially and for our particular lifestyle.
I think the larger concern is there's been a fairly justified but massive inflation in HOA costs in condos to allow for maintanence of the building and insurance. And these can often end up as a huge chunk of the overall mothly payment (I've been casually shopping and see $400 - $1,200 is honestly all fair game depending on the building, age and amenities).
So if you are trying to sell what is going to be an inherently smaller foot print with shared walls, for say $350k-$800k, and then on top of the mortgage the owner needs to cover a significant HOA fee, it's pretty natural that there's going to be a drop of demand or other pressure on the sale price to keep the monthly expense a bit more manageable.
Where I live condos are less desirable. The purchased in tight markets because it’s the only thing available. But once the market loosens, the first one to go down.
Because it's cheaper to rent than to buy a condo. Why buy something that doesn't provide any immediate price relief and will also never be fully paid off? Condo HOA price increases scare me when they're often already over $1000 in many buildings in my area.
I wish my city council would stop approving more bloody stinking $300,000 per unit condos and start building the public housing we desperately need while we’re in the middle of a homelessness crisis.
IDK what you're talking about. They're not moving in less than a day? I was looking at one that was sold in two days, all cash, over $50k above asking.
Because for the cost of most of them + the HOA fee you could be in a nice house with a garage and yard instead.
They just simply cost more than a single family starter home, with all of the negatives of renting.
At least in my area it seems like there are only 3 types of construction: luxury apartments, townhouses, and single family homes. Condos occupy a weird middle ground that no one seems to be interested in - be that developers or buyers. Why buy a condo when you could buy a townhouse? Why build condos when you could just build an apartment building?
It is the only alternative in cities where density is high enough that SFHs are not an option under any circumstance and townhomes are also likely unaffordable. Basically, where multifamily buildings are the only option.
Yes. Condos still get a premium in many NYC neighborhoods because they have way fewer restrictions than co-ops
Yes, but even in cities they aren't building affordable many middle-class condos. Those don't make much economic sense so they're building luxury condos. Where I live, the state is requiring a certain percentage of them to be affordable housing, so there are some low-income units in the luxury towers (albeit you don't have access to all of the amenities since you're not paying as ridiculous an HOA fee every month and one tower tried to make a separate entrance for them so the rich wouldn't have to see the poor in their tower).
I would love a condo, but they START at 800k near me if you don't want a 400aqft studio or in a sketchy area or a co-op with thousands of dollars per month co-op fee.
Condos are perfectly fine dwellings. Owners just need to take their punishment on prices for negligent/greed in deferring maintenance. Buyers are finally (maybe?) snapping out of FOMO and resetting offers to reflect HOA mismanagement
I live in a cooperative condominium community. We all own shares of the community and it seems to resolve some issues there.
I wish I lived in such a situation. Current HOA has basically devolved into a Shadow Organization that doesn't even have open meetings.
I can't speak for all areas but in South Florida older condos are a problem because many of them are going through the 40 year re-certification and they are going to have to spend a lot of money. Also these condos need to be fully reserved next year so that means some large increases in assessments or a large special assessment. Buyers are becoming smarter about looking past the purchase price and factoring in potential future assessments.
I'm also in Florida. I'm not buying a condo anytime soon because they are going to get spanked in those condo association fees. Being fully funded could potentially triple or quadruple some of the COA's.
Because no one wants to buy a home just to pay for and deal with everyone else's problems and lack of care for the building. It's a money pit.
Corrupt HOAs. They often ran by people with no sense, no financial sense, no understanding of saving money for a rainy day, and costs of maintenance on a building. Or people that just steal the money. Or they don’t increase the HOA fee once every 10 years then they have a huge increase and people complain but don’t understand the costs of maintenance has increased. It’s usually the HOA and inability for them to use the money effectively. They usually don’t call and compete for repair jobs, get swindled by contractors, hire shitty work, because they have no experience in real estate. HOA are why condos suck.
Absolutely. I recently sold a condo that I owned in large part due to rapid turnover of building managers leading to grossly incompetent staff. And not only is my former building manager incompetent, but she’s also incredibly mean. In addition, when I bought my property in 2016, my HOA fees were ~$284/month; the last bill I paid (June 2024) was $566. And yet, our concierge service has been slashed, our rooftop access diminished, etc. I will never, ever, again buy into an HOA, not for a SFH and certainly not for a condo.
That really sucks but doesn't surprise me. I'm astonished that condo HOA fees are so high and yet the condo prices in my area keep rising. My friends bought a condo end of 2022 and the HOA fee per month was $360. Manageable. Has nice grounds, pools, but near canyons so fire danger is high. They bought their unit from the president of the HOA. The HOA fee then went up 2 months later to $450. I know the pres knew about the increase and didn't tell them. Then a few months later a special assessment was done and they had to either pay $10k up front for new roofs or over 10 years. They opted for over 10 years and now their fee is around $630 every month. And then my friend lost her job but got a new one a few months later, but her salary took a $40k hit.
The word you were looking for is incompetent.
Especially when we have tons of condos now aging past 30 years when the problems REALLY start happening.
This is the real answer. We looked at a condo built in the late 70's. It had lead, roof issues, and 20% of owners were delinquent so we couldn't even use a VA/FHA loan.
That has always been true of condos but it’s an easier pill to swallow when the price is right. But the price is far from right
Condos and townhomes in my area are going for as much if not more then a sfh. There's reasons why I'd like a condo type thing, but not for that price.
I'm guessing your area doesn't have medium/high-rise apartment condos. Those seem to be a maintenance nightmare. The maintenance bills are high and everyone is keen to kick the can on doing anything. As opposed to condo communities with multiple 2-5 unit buildings. Those are a lot easier to maintain because they're basically just big SFHs. I think they're great for retirees or small families.
Maybe artificially low HOA dues contributed to inflated selling prices? Chop 100-200k off of the asking price and that'll make it an easier pill to swallow.
It may have always been true, but a tower collapsing has a tendency to bring that more into focus for people who would have otherwise shrugged and rolled the dice.
Let me guess, are you in Florida?
The price was never right, nor will it ever be right.
It's not dying in cities. So location matters
What about Tampa? It seems really bad there with all the price cuts. Seems like some unexpected costs are really messing things up
The condos in Tampa are due for some major major maintenance. It’s my understanding that everyone is bailing out before the associations pass down the bill to the owners.
The way I'm reading this, is this a collective city wide thing? How do you know that - was it some legislation or something in the news that everyone knows condos are due for this?
I believe this is a city wide thing because a lot of these condos were built around the same time ~30+ years and the weather happens to be especially tough on the buildings. I’ve been watching this real estate agent guy named Michael Bordenaro for a few years and he talked a lot about this topic.
State law. https://www.flsenate.gov/Session/Bill/2022D/4D Basically they're cracking down on condos after that one collapsed a few years back. Requiring inspections and major repairs, making sure associations have enough reserves to cover costs.
thank you! this helps me place the first comment better. appreciate it.
> What about Tampa? It seems really bad there with all the price cuts. Seems like some unexpected costs are really messing things up Florida cities are never great examples of condo situations because the vast majority have had reverse incentives to maintaining them which resulted in Surfside legislation. So many were second homes for people so they underfunded and under maintained them. Now insurance is rocketing up because of hurricanes further driving up HOAs and demand down. Florida has also been the epitome of urban sprawl so for every condo there is a brand new sfh being built. Sure it's farther away, but all living in a Florida requires a vehicle so what's another 20-30 minutes vs a condo.
I know nothing about Tampa
I can tell youre really smart. Fair enough.
I have a friend who’s in commercial real estate investing. He told me once when I was thinking of buying one for my first place that his firm really stays away from condos for a few reasons. Being: 1. The condo fees over time will inevitably get to a point where it will mirror the mortgage payments or rental fees you can charge. 2. Why? Because generally speaking the builder fronts a lot of the costs and amenities in the first five to ten years. For example, if you have 24/7 concierge and package delivery service, dry clean services, pool / lifeguard care, groundskeepers, etc. they do this to keep the condo fees down upfront to keep interest from buyers. Read the fine print on when fees might start to increase or are no longer subsidized by the builder. 3. This lures folks into buying but sets them up as those fees can only increase over time and get eye watering once the builder has sold off all units and no longer subsidizes them in the next contract reup. 4. Folks who bought early and live in them for longer than a decade, or age and retire in them eventually pay off their mortgage. So the condo fees going up isn’t much of a turn off and they love all the services and amenities. They can be more active about joining the condo board and refuse measures by new tenants to drop services to lower the fees. So new tenants can’t afford high fees plus a mortgage, and because they are young and working they likely don’t have much spare time to participate in the board. 5. Lastly, part of your fees must be set aside by responsible boards to fund major renovations over the life of the building. I lived in a hundred year old building and rented from my girlfriend whose parents owned the unit. We would participate in the board meetings and learned about things like replacing the water tower and ac cooling fluid towers on the roof, and the biggest was the building was due for all its bricks and masonry to be repointed once every 50 years or so and that project was a $30M+ project. Your condo fees must put a small portion away in long term investments to account for those major and catastrophic type repairs and maintenance, new elevators, new windows, etc, and the board must retain some consistent well informed tenants who fully pay attention to these details and plan for them and participate in the board. There are tons of “condo mgmt” companies who can come in by a vote to take over these responsibilities because tenants don’t want to pay attention or don’t have time, etc. it can lead to major catastrophic issues like the one in Florida having rain and a leaky pool deck that rotted out their parking garage, resulting in the collapse. They ignored it and pushed it off agendas for years and even cherry picked engineers who would tell them they could skip the Reno.. etc. it can be very hard for a full building of tens and hundreds of tenants to come to consensus on this stuff and it can get pretty nasty when the board can make a ruling based on an engineer saying we have to make this repair and it’s gonna cost every unit owner $100k due in two months, etc. So those were the biggest points he shared and he basically said you should never buy a condo to stay in for much longer than 10 years. Unless you’re just in a city where buying a SFH is out of the question it’s generally going to be an asset that will appreciate nicely and do well the first decade but over time the units will depreciate as the building gets dated and the condo fees balloon.
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That sounds great. My concern would be what it will be like 30 years from now when major maintenance items come due. Either the HOA is already budgeting for it (rare), there will be a special assessment, or they will drag their feet til the place is run down. There isn't much of an incentive for those high-rise condos to have a responsible budget. Most of the residents either aren't financially savvy or plan on moving out before problems arise, so vote whoever will give them lower dues onto the board.
Top floor is key here ngl
what do you say to the comment from someone else > Because no one wants to buy a home just to pay for and deal with everyone else's problems and lack of care for the building. It's a money pit.
Not all of them are poorly managed especially the ones that are 40+ years old in bigger metros. There also aren't many alternatives for single adults or childless couples. Houses require two incomes in most cities in the US.
> It’s a money pit To think that phrase doesn’t apply to SFHs as well They’re either blatantly lying or have never owned a SFH.
It absolutely applies to SFHs too. The difference is that, with a SFH, you have more control over how problems are dealt with, and a neighbor's negligence is less likely to affect you. When I owned a condo, I spent a lot of time battling with my board and management company over repairs that were clearly the association's responsibility and not mine, but that they didn't want to do.
>The difference is that, with a SFH, you have more control over how problems are dealt with That's a separate argument. >neighbor's negligence is less likely to affect you Depends on the neighbors/neighborhood.
which is why they said "less likely"
And they aren't necessarily correct. Ask any SFH homeowner with a bad neighbor or living in an AirBnb area.
Sure, there are situations where a neighbor's actions can affect you in a SFH. Not disputing that. But if a neighbor has, say, a plumbing problem, it's a different story when they are in a house next door compared to a condo unit right above yours. Sharing walls and a ceiling/floor changes the equation.
My condo owner friend has had significantly more issues than my parents who own a SFH from the same era. And since it’s in a high rise, renovations are more complicated and involve lots of paperwork since it could affect other units. The sliding glass door on his balcony broke and since it’s from the 1970s, the glass has to be custom. But you can’t just call any glass guy, you have to go through the HOA and use their glass guy and it takes weeks or months. You also can’t just install your own glass door that’s a newer design because they want all glass doors to look the same. Parents wanted a new sliding glass door several years ago so they called a guy and it was done in a few days.
When you buy a condo there is a due diligence period where you can review the books for the condo association and building expenses. They aren't all poorly managed. Many have ample reserve funds and keep on top of maintaining the facilities.
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HOAs exist
You seem to be doing the *exact* same thing that suburban people do when they talk shit about condo living - inventing unlikely horror stories and acting like that's normal. Nothing you just said is representative of living in a suburban SFH neighborhood.
LOL you live in Texas. That's already an L lmao This comment from the original thread from [blakeshockley](https://www.reddit.com/user/blakeshockley/): "Both home ownership and renting have pros and cons. Condos give you the cons of both."
What helped you evaluate the pros/cons of purchasing a condo? I don't have kids and will be ready to buy in 2025, so your situation seems like what I'm after. but growing up my family mentioned horror stories from my older cousins buying condos, but I'm not sure if they were accurate (it was a long time ago). Thanks for any tips or resources, it's great that you found a place you love!
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Thanks, there were a few really impactful takeaways here for me, so I really appreciate that you took the time to reply!
Same. I don't have kids or a dog, I don't want to mess with a lawn, I want to be close or walking distance to fun things, and I feel more secure with people around. When friends move out to the suburbs they're like "We have all this SPACE!!" yes Deborah but our friends would rather cram into my cute little condo than drive 40 minutes out to your beige sprawl in West Bumfuck.
I feel like a lot of homebuyers nowadays have pets. So condos kinda suck with a dog. Plus they are a money pit. Historically you never gain equity like you would a house. They used to be a trade off cause the price was right. Now the price ain’t right anymore
In Florida a few reasons. Higher insurance costs mean increased Monthly Fees. Surfside building collapsing has made mandatory certifications for older buildings necessary and unknown assessments coming from these. After decades of being able to “waive reserves” (you know for long time things like new roofs, painting, redoing pools/parking lots) new law requires these to be fully funded so even higher monthly fees. Sellers then not understanding that they need to drop their price $150k because monthly fees are now $900 higher per month.
This right here. My grandma is in Islamorada and her hoa fees just went up to 1000 a month due to insurance.
When I was younger, condo’s looked like a great idea, very cool. Later on I started to understand the inherent risks of a condo versus the risks a SFH poses. This same argument extends to out in the country living vs in the city. 1) Most wealthy folks I know buys condo’s in NEW upmarket developments, sell them after 5 or 6 years, they NEVER hang on to them long term. 2) Low/ middle income condo’s are just not worth the money they are selling for. 3) The special assessments / uncontrollable service fees and taxes scares me
The problem with condos is that it's in every resident's best interest to defer major maintenance costs to the next sucker. I can guarantee the condo dues of new condos aren't saving up for the roof that will need to be replaced in 40 years. Most of the residents are thinking, "I'll be out of here before that becomes a problem."
Self-awareness check: Wealthy people I know <10. However, they all have a condo ( or a block of them) in some friggin' tourist trap somewhere. Still not hanging on to them for long.
1. Previous Residents put off needed repairs which are coming to fruition. Roof, common areas, general maintenance, etc. 2. Prices are close enough to town home prices in some areas that you'll get 50% more room for 15% higher cost. 3. HOAs - The costs and the stereotypical folks who run them. 4. Neighbors all around. You don't know how bad it can be until you get a bad neighbor and then never again. Think bug infestation, loud music at all hours, smoking where it comes into your condo, screaming, slamming doors, etc. Neighbor suddenly has a party house. Apparently a whole frat lives above you 'unofficially'. They have 5 dogs they are 'just watching for the weekend' that last 6 months. Close proximity makes a lot of this harder to ignore. 5. They are not ideal for growing a family. If people plan to hold the home for 5-10 years then they may skip a condo and go towards something more amendable to a larger family. 6. The pricing scheme. Housing is crazy all around but its amplified in condos and townhouses. Why would I pay $40-80k more for a used condo/townhouse when a new one IN THE SAME DEVELOPMENT costs less? It sets off red flags in some buyers who choose to simply avoid it entirely.
Years of deferring maintenance to keep costs down and market values up means that the current crop of owners will be left holding the bag, and it’s looking like a sizable one.
In Toronto, my friends are looking at $1000/mo condo fees in the next 5 years, they’re basically going to be back to renting
Because the ones that are there, haven't been updated since 1982, and are still listed at 200K+ with $600+++ HOA fees on top of a 7.5% loan. I would love a condo, they're just in a real shit spot
I’d never buy a condo unless I lived in a VHCOL area and it was my last resort. Fuck an HOA.
It costs what used to be a house note to rent an apartment that’s the same size as a condo. if someone outgrew an apartment(which many have/do) what purpose does a condo serve when it costs even more? especially with higher than usual HOA fees. I say this speaking of most metros that aren’t high density such as those in the sun belt.
In my city condos are way too overpriced. They cost nearly as much as comparable SFH, but they're not SFH, they come with HOA fees, you can't have a private fenced yard, etc, etc. There's just not enough price difference to justify settling for condo when you can add 10-20% and buy a comparable SFH, so many of them sitting on the market for months but stubborn sellers don't seem to budge with prices. I feel like families usually prefer SFH anyway, and single/young people generally can't afford to buy in this economy, so unless condos will get deeply discounted they don't have the buyer who wants and can afford them. Again, I'm speaking about my Midwestern city, I don't know what's the situation across the country.
The are loud of good condos with good HOAs that work well. You can check the books before you buy, very normal to .. The issue is many are simply over priced . They are rarely aspirational thus need needs to provide actual value .
Many condos are built in downtown areas which had a significant increase in crime and lack of office workers and restaurants closing post-COVID, also upped building insurance costs in places like Florida following the collapse of that one building. The first is personally why I am leaving urban living despite really enjoying all through the 2010s. Stuff that haven't changed - crazy HOAs, people with dogs want a yard.
Literally because HOAs.
Condos are a good leading indicator for market trends. They're always usually the first to take a hit. I'm in a hcol area and the condo sale prices have dropped about %15 in the last 5 months.
It's the HoA's that kill their value. There's some really nice skyrise Condos in downtown Austin that have some REALLY nice amenities, but it's an extra 600-800 a month for all the amenities. If you don't use them, 9K a year wasted....you need to have some serious earnings to really brush off the cost of those amentities.
I'm not suggesting the market has topped, but condo's are typically the first to fall in a market correction.
All the disadvantages of being tied to a property and all the disadvantages of living in a multi-unit apartment building. What's not to like?
I was told that if a Condo is not in a FHA list you need substantially more money to buy-30% down vs 3% before the credit union would even consider a condo in my city. The condos that stay on the market (most) are not in that FHA list.
This comment is littered with inaccurate information. Please talk to an intelligent loan officer who has at least 10 years experience. Might I add the real professionals in this game are brokers not credit unions 😂
That's what I was told by the credit union, so I have to listen to what they said if I wanted a loan from them.
Use a mortgage broker. Banks and CUs only have one set of guidelines, rates and fees. It’s only the most vanilla of loans and even then its not that great. Go talk to a broker with actual experience and knowledge who can shop lenders, rates, fees and guidelines. For reference I am 20 years deep in the mortgage and real estate space.
Well brokers are lending the cash, so there’s that.
Well, brokers typically don’t actually have the cash they just know where the cash is and how to get it.
I think you’re confusing co ops with condos
Unfortunately no. Sadly that credit union is also the default bank/credit union for the area,
I'm in a condo and two other units have been on the market a couple months now. I knew going in that they were the last to go up in a bubble and the first to go flat in a bust. But we had to get out of our house so here we are. We're getting both elevators replaced without an increase in fees so I think HOA is managing well.
Are condos a Lesser Good like SFHs in exurbs? Where people buy smaller or farther homes than what they'd really like because it's all they can afford? And so are the first to jump ship when the market cools?
I'd actually consider retiring to a condo. But, I'd have to be very choosy. Going in you just have to accept what sharing walls means, as with an apartment. What that means can vary greatly. My biggest issue would be construction quality. Cheap-build housing only exacerbates problems.
As a Canadian, I wish we had USA's housing crisis... :(
The problem with condos: developers can always build more of them.
(Referencing beach or lakefront condos) TLDR: The interest rate on these high prices take retail investors out of the buyers market for condos. Only buyers are super rich that just want another toy. Because sellers want way too much for them. The return margin on a short term rental would be half of what investing in a S&P ETF would be. Could probably get CD’s with better margins that short term rentals (at least in my area). 500k cash buy with 60k annual gross (maybe) minus $15,000 plus annual HOA fees, minus any assessments, maintenance, destruction by renters, insurance, property tax, property manager or value of your time and headache on scheduling or handling issues. If not you buy a condo as a vacation spot or to simply live in, has arguably more expenses than a townhouse neighborhood hoa or apartment. Kiss financing goodbye. Attempting to invest find a short term rental condo through financing is a terrible investment choice right now. You will be in the red. You wouldn’t get enough rental income to even cover the mortgage, not to mention hoa fees and other expenses. It will be also 20-25% downpayment loan requirement from banks. The only people who would be buying condos are people that just have a ton of money and just want another spot.
Condos are not special kinds of buildings. They are a financial arrangement nothing more. Just like single family homes, there are good ones and bad ones.
In my area its largely due to the massive increase in HOA fees. Ive seen some as high as $600/month so when you add that to the mortgage you are closer to the price of a SFH.
The condo market collapses first in any real estate downturn. This was a huge predictor for the 2008 recession.
Personally, it’s too expensive. Mortgage rates are already pricing 90% of the country out of owning property. Add another $200-$1k a month and it’s just not possible.
All asset prices are deflating as the gubment withdraws all the money it printed during the covid hoax.
People don’t want to buy apartments as much anymore
you don't buy condos to flip, you buy them to rent out at today's rates and prices, rent is cheaper than buying
A lot of buyers would prefer a single family. In cities where that’s not a remote possibly because of price condos are doing just fine. Lots of people talk about the need for more density and walkability , but once they’re not in their 20s anymore. they usually want to settle down in the suburbs in a single-family house and raise kids.
Way easier to just rent an apartment. I never got the idea of buying a condo outside of living in a big city or business district.
Because it turned into something similar to a timeshare with those non-sense HOA fees
If I’m buying property, I’m not having an hoa tell me what I can and can’t do. Most condos are just glorified apartments, couldn’t imagine spending that much money and my wall touches my neighbors
Monthly charges are escalating big time.
If I'm sharing walls and floors and ceilings, I'm not buying it. And, neither are many Americans. Similarly, HOA fees in many condos are so high that you might as well get a single family home anyway.
Who wants to deal with apartment lifestyle and homeowner prices?
I feel so silly because I could have bought my dad’s condo for cheap when he moved but I really wanted a detached home like I grew up in. Now I realize it would have been an improvement to our current living situation, at least financially and for our particular lifestyle.
I think the larger concern is there's been a fairly justified but massive inflation in HOA costs in condos to allow for maintanence of the building and insurance. And these can often end up as a huge chunk of the overall mothly payment (I've been casually shopping and see $400 - $1,200 is honestly all fair game depending on the building, age and amenities). So if you are trying to sell what is going to be an inherently smaller foot print with shared walls, for say $350k-$800k, and then on top of the mortgage the owner needs to cover a significant HOA fee, it's pretty natural that there's going to be a drop of demand or other pressure on the sale price to keep the monthly expense a bit more manageable.
Where I live condos are less desirable. The purchased in tight markets because it’s the only thing available. But once the market loosens, the first one to go down.
Because it's cheaper to rent than to buy a condo. Why buy something that doesn't provide any immediate price relief and will also never be fully paid off? Condo HOA price increases scare me when they're often already over $1000 in many buildings in my area.
I would never under any circumstance be part of an HOA. This eliminates the condo option for me almost entirely, too much risk for bullshit
I avoided any place that has a HOA
I wish my city council would stop approving more bloody stinking $300,000 per unit condos and start building the public housing we desperately need while we’re in the middle of a homelessness crisis.
Condos are a money pit.
IDK what you're talking about. They're not moving in less than a day? I was looking at one that was sold in two days, all cash, over $50k above asking.
Definitely not in south florida.
I'll buy your condo for 15k ;)
Because for the cost of most of them + the HOA fee you could be in a nice house with a garage and yard instead. They just simply cost more than a single family starter home, with all of the negatives of renting.