Older condos have long seemed like a practical route to homeownership.
But the market for those aging units is slumping in cities across the country as monthly HOA bills and surprise repair charges rise high enough to wipe out the savings that once made them appealing to buyers, as Yahoo Finance reported.
Here’s what to know
New data from HOA management software company Vantaca, highlighted by Yahoo Finance, shows a steep fee divide between older and newer condo buildings.
Units built before 2000 had median annual fees of $11,431, compared with $5,012 for condos constructed within the last decade.
Those costs are contributing to a slump in the market for aging condo units in cities across the country.
For buyers seeking a lower upfront price — including many first-time purchasers and downsizers — older condos have often looked like an affordable option.
That advantage can fade fast once high monthly dues are factored in, especially when owners also face the possibility of special assessments tied to repairs or reserve shortfalls.
Condos less than a decade old went entirely without special assessments, according to the Vantaca data cited by Yahoo Finance.
Older buildings told a different story: Nearly 12% of pre-2000 condos imposed one, with a median charge of $2,041, while properties built between 2000 and 2015 saw similar rates and bill sizes.
According to Kelsey Earl, a Realtor at Keller Williams South Valley in South Jordan, Utah, rising HOA costs can derail plans for both buyers and sellers.
Earl recalled one owner who tried to sell after his fees increased, then ultimately stayed put when asking prices fell below the amount he still owed.
More background
The 2021 Surfside, Florida, disaster — in which part of a 40-year-old condo building collapsed, and 98 people died — intensified the strain on older associations.
In its wake, many were forced to deal with rising insurance premiums, stricter reserve requirements, and overdue maintenance expenses they could no longer postpone.
Homeowners often end up shouldering those costs.
Yahoo Finance, citing Vantaca, reported that the median regular assessment for condos built before 2000 more than doubled. Special assessment rates tripled, and the median special assessment bill increased from $244 to $1,801.
So even when the mortgage payment looks lower, buyers may still be taking on thousands of dollars in annual fees, additional financing hurdles, and slower appreciation than with a single-family home.
What can be done?
The best safeguard before making an offer is to do careful homework.
