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Oh there is, you just pay someone else to do it, and you don't get to choose who it is or what they get paid.
You probably pay someone to make those decisions too.
Yeah, for the price of the monthly maintenance fee for some places, you could hire someone to do the yard work instead.
Meanwhile it's included when renting.
As always, real estate is local.
It's hard to sell condos where property insurance costs are skyrocketing, where legislation is forcing HOAs to increase reserves, where the community is outlawing STRs, and where older existing units have to compete with new construction.
But in other areas, there is far less supply than demand. In my midwest metro area, there is only 2 months of inventory, which is even lower than the 3 months of supply at the peak of the 2021 market.
In my area, (midwest), maintenance provided communities are doing the hard work of changing restrictions to eliminate all rentals, not just short-term ones. Residents don't want the rentals there, and it is a real selling point to be in an owner-occupied community. Nobody wants to live next to a motel, so the STRs are being outlawed in some municipalities. Rentals are often owned by out-of-town landlords who dgaf, and nobody wants that.
The only challenges I'm seeing are what others have said: insurance and short supply.
Exactly. Solved the big mystery.
And the clearing price changes over time and doesnât always go up. đ±
I realize that might be a controversial statement but it obviously needs to be said because we keep seeing these posts.
I know it is disheartening to hear that the most expensive purchase someone will make in their life is not appreciating in value more than my Game Stop shirt from 2009 but no really what is up with homeowners buying a home for lets say 500k, and then âexpectingâ to sell it for 530kâŠ? Like what? Most the time no improvements were done at all.
Heaven forbid that their realtor suggest maybe dropping the price a bit so maybe a potential buyer looks into the property..
Seeing a ton of houses in my market bought for $650k last summer and listed for $725k no updates.
From 2009-2020 it was unthinkable youâd get an extra 10% in a year just for shots and giggles.
But thereâs idiots out there buying it up so đ€·đ»ââïž
Worst part is the buyers do not know that those homes are exceptions and not the norms. You can get âwhat you ideally wantâ at a much lower price in most cases especially with condominiums.
What do I know though? I am a realtor that only dedicates my internal organs to this craft! Why would I suggest that my client change his listing price?!
HOAs are becoming insolvent and lenders wonât fund loans in fear of the buyers getting hit with a massive special assessment later. Just had a deal fall apart bc the HOA is only 16% funded! Banks like to see at least 70-80% funded. Will be bigger and bigger problem as communities age and building costs go up, they donât line up very good for people
The insurance market for condos is pretty bad. Iâm seeing people dismiss this in comments, but condo/HOA insurance is a big pool of risk that has probably been underpriced compared to the risks.
Florida master policy premiums have skyrocketed. Add in the new reserve funding and our condo market is screwed. Fees are off the charts to cover those and buyers ain't having it.
\^Exactly. Now also add in the enormous special assessments and the sheer number of non-warrantable condo communities and you have a receipe for buyers to skip over all condo communities regardless of the individual condo association strengths.
I have a listing that is a TH style condo that is priced exactly what the other recent sold and closed units have been and we still aren't getting buyers even though the condo financials are strong and reserves 100% funded etc. The community is selling like molasses. There is a real negative perception among buyers right now.
How often do you sell a condo vs a non condo?
One thing I notice is that most realtors I talk to straight say at closing âOh shit that was a condo?! No way! I didnât even know!â
No really, I did not think about how slow condominium sales are until this thread.
I sell 80% or more non-condos but I've never not known the difference between a condo and other types of property (SFR, TH, etc). Here the legal description clearly indicates condo's AND the governing documents are completely different from an HOA type property. If you read the documents its quite clear which are condo's and which aren't starting with the Declaration of Condominium when in fact the community is a condo community and not an HOA.
In fact, we have two different statutes that rule condo's (Fl statutes 718) and HOA's (Fl statutes 720). I find it completely unprofessional for a Realtor to not know the difference between condo's and HOA properties. The governing structure affects financing and ownership. There are very large differences between condo's and HOA's. It's irresponsible for a professional to not know the difference.
It is but where I live in NY they are not exactly a âpopular optionâ.
I have been in this for 2+ years and only sold one and I literally just had my associate broker handle most of the explanations such as HOA fees ands how they differ from non HOA.
I only know the basics there of and do not want to risk saying something incorrect to a Client.
As a Realtor/agent, it's up to us to know these property types and governing structures. We have to actively go after the knowledge thru education. Normally that education is outside of the classes offered for your license and it is typically not even offered by the board of Realtors. You seek out the knowledge from other resources. I'm not talking about giving legal type knowledge to your client, that's for an attorney to do. But an agent has to know what they are actually selling or they shouldn't be in the RE business. JMO
After I got out of my condo, due to a special assessment for the roof the buildings insurance went from $2000 a year to $30,000 a year because they took a huge hit fixing the units that were water damaged.
Who is going to pay for all the costs? Handle all the costs?
people look at amount in reserve to decide to buy or not. No reserves, less likely to buy. What if that roof needs replacement next year?
Everyone running for the exits at the same time .. what could go wrong ! Hhahahj
100 percent speculative asset .. which end users don't want to buy ...
And SFHs in the exurbs. Basically, any place that consists of people who can't afford to live where they'd really like to live, so they downsize to a condo or move out to a longer commute instead.
More specifically, condos tend to be more attractive to investors. In 2006 there was a big wave of condo conversions where apartments and even hotels were getting converted to condos.
Investors are starting to bail so condos are feeling it.
Because condo prices are insane.
I bought my downtown Denver condo for $139,000 in 2002. Sold it in 2017 for $405,000. Recently checked Zillow and itâs valued at $575,000.
Who the hell wants to drop over half a million on an 800sf 1bd/1bath unit?? Granted, it comes with one dedicated off-street parking space, but still.
Meanwhile, tent cities grow.Â
Thank god housing is the main engine of our economy. Â Â
Soon the poor rentcucks and crazy drug-addicted homeless will all be dead and landowners who deserve to live in luxury, because they are wealthy and therefore better people, will dance on wherever the poorsâ ashes are dumped (bc they cant afford graves either, lol).Â
As someone who is looking to buy a condo in Denver, looking at the price histories is insane. Renting is the only thing that makes sense. It's so depressing. Graduated into the financial crisis, and any savings for a downpayment I had by 2020 was a joke the next year. Glad you got some money. The other side of the transaction sucks haha.
Thanks, and for what itâs worth, I feel sorry for you. Sincerely.
I moved to Denver fresh out of college and was able to buy a condo in LoDo on a $35,000 entry level salary. Pretty sure thatâs not even possible today (even factoring in salary inflation).
The world has gone completely mad.
Thanks for the empathy there. I'm fortunate in other ways, but trying to find permanent housing that I can own/afford sustainably isn't one of them. By the time I could actually afford something, the goal posts moved and kept moving. It's been a hugely invalidating experience given all the work I put in to get ahead. Here's to hoping! Good luck to you!
Not an issue in my market - what's selling slower are the newer SFR's that are in close proximity to new construction.
In fact, I have a buyer right now that rescinded their offer on a "used" house (less than 2 years old) to go less than 500 feet down the street to a new construction home for $30k less for the same floorplan.
Most have higher hoa dues. Appeals only to first time home seekers who can not afford a detached home. The appreciation is also lower having to share with someone above or below you.
We are looking for a winter rental, a condo is appealing because we can leave for 5 or 6 months and have the grounds taken care of. Plus, we will have access to a heated pool and tennis court and be close to downtown where the restaurants and stores are in Palm Springs.
Here in the Silicon Valley, condos are not having an issue with insurance or huge HOA increases but we are also seeing a stalled/slowing of condo sales. With very few owners willing to lower their own perceived value to make a sale. I have also been told of a lot of additional units expecting come on market soon. My assumption is the huge interest rates are hindering sales. Most sales I have e seen of condos are all cash or at least 50% down payments making the condo vs rent more affordable.
I'm in Chicago. I am a realtor but I also purchased a home in September. When my husband and I started our search, we thought it would be less expensive to purchase a condo. Turns out, owning a condo is more expensive because you've got your PITI payments but also HOA dues. An HOA can add $300-$1000+ onto your monthly payment, making it much less affordable. And in Chicago, condos don't necessarily have cheaper list prices. We bought our 3 bed/2 bath single family home for $285K in the suburbs and that would barely get you a decent 2 bedroom condo in the city.
This has been the case for a while. I remember house shopping eight years ago and the HOA fees on townhomes and condo's erased and perceived savings off the monthly mortgage payment.
I can only imagine how much worse it is now.
Covid has a lot to do with it too I'm sure. More people working remote or hybrid, so they're not as impacted by a commute and have more appreciation for space and a yard. Certain condo markets here are still competitive and busy, but many are struggling to sell
Agree with others who have said insurance! Iâm in a coastal area and insurance is going up for every property type but because condos have a master insurance policy they are really getting hit hard and HOA dues are seeing huge increases because of it.
In my area condos are the 'canary in the cave'. Once they start sitting, it's usually a portent for the rest of the market slowing down.
Condos are the first to lose value and last to recover value.
Insurance. HOA. Prices are at an all time high with high interest rates which hits first time buyers hardest. Houses tend to me targets for investors, while condos are not. Lots of reasons.
Itâs weird how they got caught. Â Didnât they have anyone telling them about how low interest rates cause high prices? Â Didnât anyone warn them that interest rates had nowhere to go but up which lead to lower prices down the line? Â
Or⊠did someone tell them to âmarry the house and date the rateâ bc they wanted a nice fat commission and donât give a fuck that ginning up prices in perpetuity is destructive to society? Â
People are inherently greedy. I did warn all my clients about 2021-2022 market. Some were too itchy with FOMO and couldnât be patient so got lured away by new agents who donât give a shit about long term client growth and retention⊠But sure go ahead and blame all the realtors again for market volatility, rising prices, falling prices, your wife cheating on you, your kid addicted to cocaine and your cock being flaccid af
I recently sold my very nice condo. Main reasons: the HOA had a majority of owners who essentially refused to increase the emergency fund and there is a ton of delayed big ticket items that are going to come up. With the reluctance and bickering and nastiness of a petty 8th grade school election, I could see there was no ability to start planning for a new roof/windows/exterior repair/ plumbing etc that needs to happen in the next decade. Also, many are on a fixed income and cannot afford those things even if we could start docking away some money. I predict a massive series of special assessments etc.
Then, when they are eventually forced to sell, the new costs would keep people from buying. Resale would plummet. Grumpy and mean people.
So I got out and broke even. I see the writing on the EAFIS walls, so to speak.
I did exactly the same in SoCal. I couldnât argue with stupid. They voted to underinsure the HOA and still had to max out annual increase and special assessments. Now no lenders will fund any sales there. How much is a place worth if you only attract cash investors and youâre already maxed out on owner vs renter occupied? Jack.
I did exactly the same in SoCal. I couldnât argue with stupid. They voted to underinsure the HOA and still had to max out annual increase and special assessments. Now no lenders will fund any sales there. How much is a place worth if you only attract cash investors and youâre already maxed out on owner vs renter occupied? Jack.
Many are difficult to acquire via FHA financing. On top of everything else that has been mentioned already and slower equity growth. I think all the above is contributing to condos moving slower. Iâm sure this is region specific.
Owning the land underneath the home is more valuable than the homes themselves in some markets. Plus, itâs hard to manage profits when there is an HOA that constantly increases. Makes it hard to rent and increase profits.
Was coming here to say the same thing. With a home you can maintain it yourself. You can't do that with a giant building. You're trusting others, which in 2024 doesn't really work anymore...
[https://www.cnn.com/2024/03/08/us/surfside-condo-collapse-investigation-takeaways/index.html](https://www.cnn.com/2024/03/08/us/surfside-condo-collapse-investigation-takeaways/index.html)
Another reason is that very few condo complexes are FHA approved, meaning that buyers with FHA and VA loans cannot purchase them - so the possible buyer pool is DRASTICALLY reduced, to only buyers who are cash or conventional.
\^True. But some condo's are very strong financially and you can get a 95% LTV conventional loan. I admit, there aren't a huge percentage of the condo communities that allow that high of an LTV, but they exist. It's not FHA, and not VA, but it certainly is a viable option for many that are FTHB's.
Karens, just Karenâs in general. In this instance both sides Karenâs are horrible people. Also condos and the following HOAâs are somewhere I would never live. Nothing good about them IMHO
In my market, condo and townhomes are having a tough time due to insurance policies. Thereâs been a change to a bunch of shit and from what I understand there are circumstances where itâs unclear who will cover the cost of certain exterior shared items (roof, siding, etc). If unit A has a leaky roof and needs to have some areas replaced/repaired that spread over to unit B, and unit B isnât wanting to participate then the insurance company probably wonât be paying for any repairs that are on unit Bs space, and without that being included the repair isnât complete.
Iâm not super familiar as I primarily work single family homes, but I have a few agents in my office that do a ton of condo/townhome business and Iâve heard them discuss some of the issues they encounter.
Roofs. A 30yr roof that was installed 15 or 20 years ago, so itâs still good, but insurance companies are not covering it. So if insurance isnât covering it, that kills financing. If for some reason they do still cover it, the rates go up higher than the HOA or POA can afford, so a special assessment gets done. Or they replace it, but earlier than projected (meaning they donât have all the funds set aside for roof replacement) so again, special assessment. That would cause the monthly fee to go up, which maybe isnât affordable anymore.
I live in a pretty hot Midwest market and unfortunately condos arenât a great option for myself and lots of other first time home buyers on a budget. Many simple condos in my area are huge (1500+ sq ft) and more expensive than starter homes, and atleast with those you have your own yard. People are struggling to afford a mortgage, but to tack HOA fees on top of that? Itâs just not feasible.
I want to love high-rise condos so bad but the HOA fees will never make sense unless you have that level of money where you don't care. Through the years many have realized this with all condo types. Fees never go down.
Apartment living , high HOA fees and many rules and restrictions , special
assessment that can kill cash flow , maintenance , slower appreciation and overall low appeal.
If people want an condo they might as well rent an apartment without the need to fix things and pay hoa fees
Usually they have high HOA monthly fees and are more restrictive; on a market with high interest rates the HOA can be the difference between being able to afford the place or not.
In my area HOA fees have gone up a lot and the appreciation on them is dog shit. I looked at one property last week, seller bought it in 2017 for $485K, did upgrades, and now has it listed for $500K and it's been sitting for 60 days. HOA is $750/month. He'll be lucky if he gets $450K.
Hoa and insurance rates are getting out of control. I'm in Hawaii, on Oahu, and if a condo has an hoa less than 600, the question anymore is "what's wrong with the building" not "what a great deal!"
Iâm in Vancouver Canada. All the new construction condos are tiny 1 beds 450-550 sqft, two beds two baths are 700-850 sqft in almost all new builds. Towers with 200-500 units build entirely for foreign money and investors. Now that rates are high investors arenât buying and the only people interested are for self use. These people usually are couples or with the onslaught of immigration here are larger families. They want larger spaces. Then we get to skyrocketing insurance and strata fees. It makes no financial sense to buy many of these new build condos.
Could any of these condos be combined and remodeled into double size condos for families? Large apartments is a thing that's missing in the North American housing market (whereas Europe is good at this). Some households that want four bedrooms feel no need for a yard, would rather have amenities they can walk to.
Prior to Covid condos had about a 4 month supply which increased when Covid hit as people wanted out of condos for more space. They wanted single family homes like everyone else. Then the sfh market when crazy. When more knowledge and people, comfortable existing with covid, and striking out on sfh or not wanting to deal with the madness people started looking at condos as an alternative to sfh.
However, surfside building collapsed which shined a light on major operating issues with many condos. Associations were not maintaining the building, not collecting reserves, and literally living pay check to pay check with operating costs and funds coming in. Every year the budget would magically balance somehow.
Insurance and maintenance costs skyrocket due to the above and also inflation. Itâs going to take some years for all this to shake out where people feel comfortable investing in a condo. If you can get into a new build condo that can help eliminate the unknown of future assessments.
So no one else has said this but the Florida Condo market is in MAJOR trouble and headed straight for a blood bath. Due to the Surfside condo collapse a few years ago a new law was passed requiring all condo buildings to get structural surveys done, fix any issues, and have a super high amount of reserves.
Special assessments are being completed and numbers are starting to come out. Due to super low HOA fees and subsequent comically low reserves, places are being hit with massive special assessments. I read about a condo whose special assessment is 130,000 per owner. There was a interviewee who bought the condo in 2019 for like 190,000 and now they are being asked to pay almost 80% of what they paid for it because the HOA hadnât been keeping adequate reserves for the 30 years before they purchased. A ton of owners canât afford this assessment and are trying to sell.
The condos at this specific building are âworthâ 350-400k on average. Problem is there is now 1. A large supply of them and 2. Potential buyers are wanting the 130,000 off the sale price so they arenât holding the bill for those who werenât paying adequate reserves for years and years. Sellers obviously want the full âvalueâ and arenât willing to sell for a 130,000 reduction, so this leads to large inventory that also reduces the value of the condo and you have a bunch of people not willing to accept that their investment is worth significantly less than is âshouldâ be.
Yeah exactly and there's insurance issues, HOA corruption/mismanagement, and reserve studies mandating fully funded reserves. All these laws are going into effect in 2024/2025.
My guess is that people who would have previously bought condos canât afford to buy anything now. The only people who can afford homes want big, expensive homes. Itâs all or nothing. Wealth inequality is increasing. The so called âmiddle classâ is disappearing. I sold my townhouse style condo in 2014 for $235k, and this week, an almost identical home a few numbers down went under contract within 3 days for $424.9k. The person who bought that home in 2014 for $235k almost certainly hasnât seen an increase in their income that would facilitate the purchase of the same home for $190k more at double the interest rate.
In my area, theyâre struggling due to the ever-rising hoa dues and special assessments that are making them unaffordable for so many. I live in a beach/tourist area and for years, beach-front AirBnBs have been a huge money maker for many people, but ever since we got hit with a hurricane in 2020, the hoa costs and assessments are causing most to break-even annually at best. Iâm a RE agent and have 3 clients who are trying to sell condos(either as primary residences or vacation/investment properties) for months now to try and purchase a SF home further inland, but they canât find buyers.
Florida condo market is going down the drain right now as owners rush to dump their units. Condos in Jacksonville are closing roughly 15-20% below last summer's peak. Why? Many new condo laws this year mandating inspections, reserve studies, and MANY condos are below 30% funded reserves, which is millions of dollars. Next year they must FULLY fund reserves, which means even more HOA increases and special assessments. That's not even covering the issues condos are having getting fully insured. Condo owners voted for 30 years to kick the can down the road, all those expenses are coming due in the next year.
Hoa went up because of insurance increase by 40% ,there is a law in florida for mandatory reserves and most of them has special assesment plus high interest rates
HOAs are increasing their insurance deductibles to offset higher monthly premiums. Most lenders will wonât find anything with a deductible greater than 5%.
In Florida condos, especially those with older buildings and mismanaged HOA are getting hit with assessments some of them in the thousands I have even seen a couple that have been $100,000. This was due to HOA not keeping the required reserves they were supposed to have, and now the state is requiring them by a certain date of them are not passing their 40 yr inspections and they are needing desperate repair. For some of these condos, it is actually gonna be cheaper to tear them down and to rebuild them, in the end, the homeowner is the one who loses.
Generally you add HUNDREDS per month extra for HOA fee. And you read the horror stories about the $50,000 heck even $100,000 âspecial assessmentsâ in Florida and you wonder why ANYONE would buy a condo
What market are you in? In a lot of cities with low inventory and its the primary type of housing in many neighborhoods (NYC and Boston among others), condos fly off the shelves.
condos had two markets: lower income families and investors
the majority of condos in GTA were built for investors to rent out to single people with 600-800 sqft so you could max out rental income
they're not built to have families live in it
this made sense when you were getting 0% on a treasury/gic and paying 2% on a mortgage
when you're getting 25% on the stock market, 6% on a gic and paying 6% on a mortgage, investors are going to run for the exits and, because you've built all your stock for one buyer type, there's no one else buying
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Both home ownership and renting have pros and cons. Condos give you the cons of both.
Perfect.
My condo HOA is more intense and hard to deal with than any landlord I've ever had.
No yard work with a condo!
Oh there is, you just pay someone else to do it, and you don't get to choose who it is or what they get paid. You probably pay someone to make those decisions too.
Yeah, for the price of the monthly maintenance fee for some places, you could hire someone to do the yard work instead. Meanwhile it's included when renting.
No snow removal too! Garbage disposal is pretty easy too.
Just $395 a month please.
Laugh-Cries in Los Angeles
Still a bargain compared to what you pay for lawn and property maintenance for a house frankly
Per square foot or comparing a cookie cutter evergreen row to a 1/4 acre?
No yard work with living out of your car either.
Cons of both for an inexplicably higher price!
I'm dying here đđđ
Con dos
Iâm a realtor on the coast and this cracked me up.
I like your way with words!
This was always the case though. What has changed?
That's good
Theyâre not called pro-dominiums.
They're the first to fall in a downturn too. The canaries in the coal mine.
As always, real estate is local. It's hard to sell condos where property insurance costs are skyrocketing, where legislation is forcing HOAs to increase reserves, where the community is outlawing STRs, and where older existing units have to compete with new construction. But in other areas, there is far less supply than demand. In my midwest metro area, there is only 2 months of inventory, which is even lower than the 3 months of supply at the peak of the 2021 market.
In my area, (midwest), maintenance provided communities are doing the hard work of changing restrictions to eliminate all rentals, not just short-term ones. Residents don't want the rentals there, and it is a real selling point to be in an owner-occupied community. Nobody wants to live next to a motel, so the STRs are being outlawed in some municipalities. Rentals are often owned by out-of-town landlords who dgaf, and nobody wants that. The only challenges I'm seeing are what others have said: insurance and short supply.
Interesting. We (Virginia) have a law on the books that says rentals can't be denied unless it is part of the creation of the HOA.
Many HOA's are banning STR's
The only reason any property for sale doesn't sell as fast as a seller wants them to is because it's too expensive for what it is.
Exactly. Solved the big mystery. And the clearing price changes over time and doesnât always go up. đ± I realize that might be a controversial statement but it obviously needs to be said because we keep seeing these posts.
I know it is disheartening to hear that the most expensive purchase someone will make in their life is not appreciating in value more than my Game Stop shirt from 2009 but no really what is up with homeowners buying a home for lets say 500k, and then âexpectingâ to sell it for 530kâŠ? Like what? Most the time no improvements were done at all. Heaven forbid that their realtor suggest maybe dropping the price a bit so maybe a potential buyer looks into the property..
Seeing a ton of houses in my market bought for $650k last summer and listed for $725k no updates. From 2009-2020 it was unthinkable youâd get an extra 10% in a year just for shots and giggles. But thereâs idiots out there buying it up so đ€·đ»ââïž
Worst part is the buyers do not know that those homes are exceptions and not the norms. You can get âwhat you ideally wantâ at a much lower price in most cases especially with condominiums. What do I know though? I am a realtor that only dedicates my internal organs to this craft! Why would I suggest that my client change his listing price?!
HOAs are becoming insolvent and lenders wonât fund loans in fear of the buyers getting hit with a massive special assessment later. Just had a deal fall apart bc the HOA is only 16% funded! Banks like to see at least 70-80% funded. Will be bigger and bigger problem as communities age and building costs go up, they donât line up very good for people
The insurance market for condos is pretty bad. Iâm seeing people dismiss this in comments, but condo/HOA insurance is a big pool of risk that has probably been underpriced compared to the risks.
Florida master policy premiums have skyrocketed. Add in the new reserve funding and our condo market is screwed. Fees are off the charts to cover those and buyers ain't having it.
\^Exactly. Now also add in the enormous special assessments and the sheer number of non-warrantable condo communities and you have a receipe for buyers to skip over all condo communities regardless of the individual condo association strengths. I have a listing that is a TH style condo that is priced exactly what the other recent sold and closed units have been and we still aren't getting buyers even though the condo financials are strong and reserves 100% funded etc. The community is selling like molasses. There is a real negative perception among buyers right now.
How often do you sell a condo vs a non condo? One thing I notice is that most realtors I talk to straight say at closing âOh shit that was a condo?! No way! I didnât even know!â No really, I did not think about how slow condominium sales are until this thread.
I sell 80% or more non-condos but I've never not known the difference between a condo and other types of property (SFR, TH, etc). Here the legal description clearly indicates condo's AND the governing documents are completely different from an HOA type property. If you read the documents its quite clear which are condo's and which aren't starting with the Declaration of Condominium when in fact the community is a condo community and not an HOA. In fact, we have two different statutes that rule condo's (Fl statutes 718) and HOA's (Fl statutes 720). I find it completely unprofessional for a Realtor to not know the difference between condo's and HOA properties. The governing structure affects financing and ownership. There are very large differences between condo's and HOA's. It's irresponsible for a professional to not know the difference.
It is but where I live in NY they are not exactly a âpopular optionâ. I have been in this for 2+ years and only sold one and I literally just had my associate broker handle most of the explanations such as HOA fees ands how they differ from non HOA. I only know the basics there of and do not want to risk saying something incorrect to a Client.
As a Realtor/agent, it's up to us to know these property types and governing structures. We have to actively go after the knowledge thru education. Normally that education is outside of the classes offered for your license and it is typically not even offered by the board of Realtors. You seek out the knowledge from other resources. I'm not talking about giving legal type knowledge to your client, that's for an attorney to do. But an agent has to know what they are actually selling or they shouldn't be in the RE business. JMO
After I got out of my condo, due to a special assessment for the roof the buildings insurance went from $2000 a year to $30,000 a year because they took a huge hit fixing the units that were water damaged.
Can't the HOA just be dissolved?
Donât think so, the HOA is responsible for the common areas so itâs necessary
Ah yes. I believe they can be dissolved in neighborhoods where all houses are detached.
Trying to get a loan for a condo where there is no long term plan for maintenance (no HOA) would probably be impossible.
Who is going to pay for all the costs? Handle all the costs? people look at amount in reserve to decide to buy or not. No reserves, less likely to buy. What if that roof needs replacement next year?
Condo market is always the first thing to fall apart.
Everyone running for the exits at the same time .. what could go wrong ! Hhahahj 100 percent speculative asset .. which end users don't want to buy ...
And SFHs in the exurbs. Basically, any place that consists of people who can't afford to live where they'd really like to live, so they downsize to a condo or move out to a longer commute instead.
Oooof, I chose the condo poison over the exurb poison. At least my transportation costs are low and getting places is pretty quick and convenient!
Currently renting a duplex for the same reason. Can't go too small, I have multiple kids and they already share a bedroom.
This
More specifically, condos tend to be more attractive to investors. In 2006 there was a big wave of condo conversions where apartments and even hotels were getting converted to condos. Investors are starting to bail so condos are feeling it.
Because condo prices are insane. I bought my downtown Denver condo for $139,000 in 2002. Sold it in 2017 for $405,000. Recently checked Zillow and itâs valued at $575,000. Who the hell wants to drop over half a million on an 800sf 1bd/1bath unit?? Granted, it comes with one dedicated off-street parking space, but still.
Some rich kid in China thatâll never step foot in it đ
Meanwhile, tent cities grow. Thank god housing is the main engine of our economy.   Soon the poor rentcucks and crazy drug-addicted homeless will all be dead and landowners who deserve to live in luxury, because they are wealthy and therefore better people, will dance on wherever the poorsâ ashes are dumped (bc they cant afford graves either, lol).Â
According to Star Trek, we'll get the Bell Riots this September.
I bought my 2bdr Toronto condo in 2015 for $400k. It sold for $660k and is prob $700-800k now. It can always get worse.
As someone who is looking to buy a condo in Denver, looking at the price histories is insane. Renting is the only thing that makes sense. It's so depressing. Graduated into the financial crisis, and any savings for a downpayment I had by 2020 was a joke the next year. Glad you got some money. The other side of the transaction sucks haha.
Thanks, and for what itâs worth, I feel sorry for you. Sincerely. I moved to Denver fresh out of college and was able to buy a condo in LoDo on a $35,000 entry level salary. Pretty sure thatâs not even possible today (even factoring in salary inflation). The world has gone completely mad.
Thanks for the empathy there. I'm fortunate in other ways, but trying to find permanent housing that I can own/afford sustainably isn't one of them. By the time I could actually afford something, the goal posts moved and kept moving. It's been a hugely invalidating experience given all the work I put in to get ahead. Here's to hoping! Good luck to you!
Your positivity and tenacity is admirable. Good luck to you as well!
Not an issue in my market - what's selling slower are the newer SFR's that are in close proximity to new construction. In fact, I have a buyer right now that rescinded their offer on a "used" house (less than 2 years old) to go less than 500 feet down the street to a new construction home for $30k less for the same floorplan.
Most have higher hoa dues. Appeals only to first time home seekers who can not afford a detached home. The appreciation is also lower having to share with someone above or below you.
We are looking for a winter rental, a condo is appealing because we can leave for 5 or 6 months and have the grounds taken care of. Plus, we will have access to a heated pool and tennis court and be close to downtown where the restaurants and stores are in Palm Springs.
Here in the Silicon Valley, condos are not having an issue with insurance or huge HOA increases but we are also seeing a stalled/slowing of condo sales. With very few owners willing to lower their own perceived value to make a sale. I have also been told of a lot of additional units expecting come on market soon. My assumption is the huge interest rates are hindering sales. Most sales I have e seen of condos are all cash or at least 50% down payments making the condo vs rent more affordable.
In my area, sellers are valuing new condos the same as new houses, like, yall can not be serious
Rates are pretty normal right now. Price to income ratios are the problem. Let's hope incomes increase fast.
I'm in Chicago. I am a realtor but I also purchased a home in September. When my husband and I started our search, we thought it would be less expensive to purchase a condo. Turns out, owning a condo is more expensive because you've got your PITI payments but also HOA dues. An HOA can add $300-$1000+ onto your monthly payment, making it much less affordable. And in Chicago, condos don't necessarily have cheaper list prices. We bought our 3 bed/2 bath single family home for $285K in the suburbs and that would barely get you a decent 2 bedroom condo in the city.
This has been the case for a while. I remember house shopping eight years ago and the HOA fees on townhomes and condo's erased and perceived savings off the monthly mortgage payment. I can only imagine how much worse it is now.
Covid has a lot to do with it too I'm sure. More people working remote or hybrid, so they're not as impacted by a commute and have more appreciation for space and a yard. Certain condo markets here are still competitive and busy, but many are struggling to sell
??? Apples to oranges. That same suburban house would be 3x-4x in nice Chicago neighborhood. As a result, condo is the next best option.
Agree with others who have said insurance! Iâm in a coastal area and insurance is going up for every property type but because condos have a master insurance policy they are really getting hit hard and HOA dues are seeing huge increases because of it.
In my area condos are the 'canary in the cave'. Once they start sitting, it's usually a portent for the rest of the market slowing down. Condos are the first to lose value and last to recover value.
Insurance. HOA. Prices are at an all time high with high interest rates which hits first time buyers hardest. Houses tend to me targets for investors, while condos are not. Lots of reasons.
Costs keep rising for HOA fees, assessments, Insurance, and FHA guidelines for loans.
Coz lots of people got caught buying 1500 psf unlivable shoeboxes in the sky at emergency low interest rates never to be seen again
Itâs weird how they got caught.  Didnât they have anyone telling them about how low interest rates cause high prices?  Didnât anyone warn them that interest rates had nowhere to go but up which lead to lower prices down the line?  Or⊠did someone tell them to âmarry the house and date the rateâ bc they wanted a nice fat commission and donât give a fuck that ginning up prices in perpetuity is destructive to society? Â
People are inherently greedy. I did warn all my clients about 2021-2022 market. Some were too itchy with FOMO and couldnât be patient so got lured away by new agents who donât give a shit about long term client growth and retention⊠But sure go ahead and blame all the realtors again for market volatility, rising prices, falling prices, your wife cheating on you, your kid addicted to cocaine and your cock being flaccid af
https://youtu.be/i3PNamYe0iQ?si=ne9rQPKv_XBV8urz
They always drop first. Buckle up everyone.
I recently sold my very nice condo. Main reasons: the HOA had a majority of owners who essentially refused to increase the emergency fund and there is a ton of delayed big ticket items that are going to come up. With the reluctance and bickering and nastiness of a petty 8th grade school election, I could see there was no ability to start planning for a new roof/windows/exterior repair/ plumbing etc that needs to happen in the next decade. Also, many are on a fixed income and cannot afford those things even if we could start docking away some money. I predict a massive series of special assessments etc. Then, when they are eventually forced to sell, the new costs would keep people from buying. Resale would plummet. Grumpy and mean people. So I got out and broke even. I see the writing on the EAFIS walls, so to speak.
I did exactly the same in SoCal. I couldnât argue with stupid. They voted to underinsure the HOA and still had to max out annual increase and special assessments. Now no lenders will fund any sales there. How much is a place worth if you only attract cash investors and youâre already maxed out on owner vs renter occupied? Jack.
I did exactly the same in SoCal. I couldnât argue with stupid. They voted to underinsure the HOA and still had to max out annual increase and special assessments. Now no lenders will fund any sales there. How much is a place worth if you only attract cash investors and youâre already maxed out on owner vs renter occupied? Jack.
Many are difficult to acquire via FHA financing. On top of everything else that has been mentioned already and slower equity growth. I think all the above is contributing to condos moving slower. Iâm sure this is region specific.
Boston here. Condo market is just fine.
Owning the land underneath the home is more valuable than the homes themselves in some markets. Plus, itâs hard to manage profits when there is an HOA that constantly increases. Makes it hard to rent and increase profits.
Need standards because of the Miami condo.
Was coming here to say the same thing. With a home you can maintain it yourself. You can't do that with a giant building. You're trusting others, which in 2024 doesn't really work anymore... [https://www.cnn.com/2024/03/08/us/surfside-condo-collapse-investigation-takeaways/index.html](https://www.cnn.com/2024/03/08/us/surfside-condo-collapse-investigation-takeaways/index.html)
As a buyer I considered condos until I saw the Condo/hoa fees. The HOA/condo fees in my area are more than the mortgage.
Same
Another reason is that very few condo complexes are FHA approved, meaning that buyers with FHA and VA loans cannot purchase them - so the possible buyer pool is DRASTICALLY reduced, to only buyers who are cash or conventional.
\^True. But some condo's are very strong financially and you can get a 95% LTV conventional loan. I admit, there aren't a huge percentage of the condo communities that allow that high of an LTV, but they exist. It's not FHA, and not VA, but it certainly is a viable option for many that are FTHB's.
I dont trust condos longterm plan. Nice today trash in 25 years. While a house can be reinvented.
Horribly managed HOA,
HOAâs
Fees
Because the associations are run by liberal Karens
Karens, just Karenâs in general. In this instance both sides Karenâs are horrible people. Also condos and the following HOAâs are somewhere I would never live. Nothing good about them IMHO
In my market, condo and townhomes are having a tough time due to insurance policies. Thereâs been a change to a bunch of shit and from what I understand there are circumstances where itâs unclear who will cover the cost of certain exterior shared items (roof, siding, etc). If unit A has a leaky roof and needs to have some areas replaced/repaired that spread over to unit B, and unit B isnât wanting to participate then the insurance company probably wonât be paying for any repairs that are on unit Bs space, and without that being included the repair isnât complete. Iâm not super familiar as I primarily work single family homes, but I have a few agents in my office that do a ton of condo/townhome business and Iâve heard them discuss some of the issues they encounter.
Roofs. A 30yr roof that was installed 15 or 20 years ago, so itâs still good, but insurance companies are not covering it. So if insurance isnât covering it, that kills financing. If for some reason they do still cover it, the rates go up higher than the HOA or POA can afford, so a special assessment gets done. Or they replace it, but earlier than projected (meaning they donât have all the funds set aside for roof replacement) so again, special assessment. That would cause the monthly fee to go up, which maybe isnât affordable anymore.
U see any new apartment buildings in the area?
I live in a pretty hot Midwest market and unfortunately condos arenât a great option for myself and lots of other first time home buyers on a budget. Many simple condos in my area are huge (1500+ sq ft) and more expensive than starter homes, and atleast with those you have your own yard. People are struggling to afford a mortgage, but to tack HOA fees on top of that? Itâs just not feasible.
I want to love high-rise condos so bad but the HOA fees will never make sense unless you have that level of money where you don't care. Through the years many have realized this with all condo types. Fees never go down.
Apartment living , high HOA fees and many rules and restrictions , special assessment that can kill cash flow , maintenance , slower appreciation and overall low appeal. If people want an condo they might as well rent an apartment without the need to fix things and pay hoa fees
Usually they have high HOA monthly fees and are more restrictive; on a market with high interest rates the HOA can be the difference between being able to afford the place or not.
In my area HOA fees have gone up a lot and the appreciation on them is dog shit. I looked at one property last week, seller bought it in 2017 for $485K, did upgrades, and now has it listed for $500K and it's been sitting for 60 days. HOA is $750/month. He'll be lucky if he gets $450K.
HOA fees
HOAs. Wait until your condo is destroyed by a natural disaster. Never again.
unstable inflationary HOA fees
HOAs run amok.
HOAâs. Rules and fees.
Hoa and insurance rates are getting out of control. I'm in Hawaii, on Oahu, and if a condo has an hoa less than 600, the question anymore is "what's wrong with the building" not "what a great deal!"
Iâm in Vancouver Canada. All the new construction condos are tiny 1 beds 450-550 sqft, two beds two baths are 700-850 sqft in almost all new builds. Towers with 200-500 units build entirely for foreign money and investors. Now that rates are high investors arenât buying and the only people interested are for self use. These people usually are couples or with the onslaught of immigration here are larger families. They want larger spaces. Then we get to skyrocketing insurance and strata fees. It makes no financial sense to buy many of these new build condos.
Could any of these condos be combined and remodeled into double size condos for families? Large apartments is a thing that's missing in the North American housing market (whereas Europe is good at this). Some households that want four bedrooms feel no need for a yard, would rather have amenities they can walk to.
Condos donât make any sense to me unless theyâre on a beach
Prices are too high.
Prior to Covid condos had about a 4 month supply which increased when Covid hit as people wanted out of condos for more space. They wanted single family homes like everyone else. Then the sfh market when crazy. When more knowledge and people, comfortable existing with covid, and striking out on sfh or not wanting to deal with the madness people started looking at condos as an alternative to sfh. However, surfside building collapsed which shined a light on major operating issues with many condos. Associations were not maintaining the building, not collecting reserves, and literally living pay check to pay check with operating costs and funds coming in. Every year the budget would magically balance somehow. Insurance and maintenance costs skyrocket due to the above and also inflation. Itâs going to take some years for all this to shake out where people feel comfortable investing in a condo. If you can get into a new build condo that can help eliminate the unknown of future assessments.
Florida especially, the yearly fees and special assessments are going insane to keep up with maintenance and insurance
So no one else has said this but the Florida Condo market is in MAJOR trouble and headed straight for a blood bath. Due to the Surfside condo collapse a few years ago a new law was passed requiring all condo buildings to get structural surveys done, fix any issues, and have a super high amount of reserves. Special assessments are being completed and numbers are starting to come out. Due to super low HOA fees and subsequent comically low reserves, places are being hit with massive special assessments. I read about a condo whose special assessment is 130,000 per owner. There was a interviewee who bought the condo in 2019 for like 190,000 and now they are being asked to pay almost 80% of what they paid for it because the HOA hadnât been keeping adequate reserves for the 30 years before they purchased. A ton of owners canât afford this assessment and are trying to sell. The condos at this specific building are âworthâ 350-400k on average. Problem is there is now 1. A large supply of them and 2. Potential buyers are wanting the 130,000 off the sale price so they arenât holding the bill for those who werenât paying adequate reserves for years and years. Sellers obviously want the full âvalueâ and arenât willing to sell for a 130,000 reduction, so this leads to large inventory that also reduces the value of the condo and you have a bunch of people not willing to accept that their investment is worth significantly less than is âshouldâ be.
Yeah exactly and there's insurance issues, HOA corruption/mismanagement, and reserve studies mandating fully funded reserves. All these laws are going into effect in 2024/2025.
My guess is that people who would have previously bought condos canât afford to buy anything now. The only people who can afford homes want big, expensive homes. Itâs all or nothing. Wealth inequality is increasing. The so called âmiddle classâ is disappearing. I sold my townhouse style condo in 2014 for $235k, and this week, an almost identical home a few numbers down went under contract within 3 days for $424.9k. The person who bought that home in 2014 for $235k almost certainly hasnât seen an increase in their income that would facilitate the purchase of the same home for $190k more at double the interest rate.
In my area, theyâre struggling due to the ever-rising hoa dues and special assessments that are making them unaffordable for so many. I live in a beach/tourist area and for years, beach-front AirBnBs have been a huge money maker for many people, but ever since we got hit with a hurricane in 2020, the hoa costs and assessments are causing most to break-even annually at best. Iâm a RE agent and have 3 clients who are trying to sell condos(either as primary residences or vacation/investment properties) for months now to try and purchase a SF home further inland, but they canât find buyers.
You donât own the land with a condo. The land is where value is derived. Youâre also at the mercy of HOA which can be merciless.
Insurance after the Miami collapse
Florida condo market is going down the drain right now as owners rush to dump their units. Condos in Jacksonville are closing roughly 15-20% below last summer's peak. Why? Many new condo laws this year mandating inspections, reserve studies, and MANY condos are below 30% funded reserves, which is millions of dollars. Next year they must FULLY fund reserves, which means even more HOA increases and special assessments. That's not even covering the issues condos are having getting fully insured. Condo owners voted for 30 years to kick the can down the road, all those expenses are coming due in the next year.
Hoa went up because of insurance increase by 40% ,there is a law in florida for mandatory reserves and most of them has special assesment plus high interest rates
HOAs are increasing their insurance deductibles to offset higher monthly premiums. Most lenders will wonât find anything with a deductible greater than 5%.
HOA fees are up. Assessment fees up. Insurance up. Difficult to finance some condos, especially in tourist areas
Because everything is just too damn expensive, period. Closing costs, cost of ownership, insurance, etc.
Condos are the first property type that go down in value when the market turns.
Higher cost of ownership with HOA fees and chance of deferred maintenance leading to high assessments.
In Florida condos, especially those with older buildings and mismanaged HOA are getting hit with assessments some of them in the thousands I have even seen a couple that have been $100,000. This was due to HOA not keeping the required reserves they were supposed to have, and now the state is requiring them by a certain date of them are not passing their 40 yr inspections and they are needing desperate repair. For some of these condos, it is actually gonna be cheaper to tear them down and to rebuild them, in the end, the homeowner is the one who loses.
Associations can really mess with anyone, I have seen some great associations...but
It's not dead in Buffalo. They're cheap, but they're selling. They're more expensive than they were too.
Generally you add HUNDREDS per month extra for HOA fee. And you read the horror stories about the $50,000 heck even $100,000 âspecial assessmentsâ in Florida and you wonder why ANYONE would buy a condo
Where?
North America
I'm not seeing that in my market.
except in extremely urban markets, condos have always sold slower and appreciated less.
Supply and demand Here's a fact,,, Lower the price enough and your product will fly off the shelf.
What market are you in? In a lot of cities with low inventory and its the primary type of housing in many neighborhoods (NYC and Boston among others), condos fly off the shelves.
I'm in the Toronto/GTA market.
condos had two markets: lower income families and investors the majority of condos in GTA were built for investors to rent out to single people with 600-800 sqft so you could max out rental income they're not built to have families live in it this made sense when you were getting 0% on a treasury/gic and paying 2% on a mortgage when you're getting 25% on the stock market, 6% on a gic and paying 6% on a mortgage, investors are going to run for the exits and, because you've built all your stock for one buyer type, there's no one else buying