More than two-thirds of condos sold below their asking price this past February, the worst stretch for condo sellers in five years, according to Redfin’s latest housing market analysis. Sellers accepted a discount on 68.4% of condo sales, up from 63.3% a year earlier, as surging HOA fees and insurance costs push buyers toward other property types.
Key Numbers
- Condos sold below asking: 68.4%, up from 63.3% a year ago, the highest February share in 5 years
- Single-family homes sold below asking: 64.2%, up from 61.2% a year ago
- Townhouses sold below asking: 59.4%, up from 54.7% a year ago
- National median condo list price: $349,000, up 4.2% year-over-year
- Sale-to-list price ratio for condos: 95.4%, meaning the typical condo sold 4.6% under its original asking price
Condos Are Underperforming Every Other Property Type
Condos have now posted a worse below-asking rate than both single-family homes and townhouses for multiple months running, according to Redfin’s data. All three property types are seeing more discounting than a year ago, but the gap is widest for condos: 68.4% sold under asking compared with 64.2% for single-family homes, a 4.2-percentage-point spread that reflects how much harder condo sellers are having to work to close a deal in the current market.
HOA Fees and Insurance Are the Culprit
Redfin points to soaring homeowners association fees and insurance premiums as the driving force behind condo buyers’ hesitation, particularly in states like Florida where new safety regulations following the Surfside building collapse have forced older buildings to raise reserves quickly. In some markets, agents report condos priced around $400,000 now carrying monthly HOA fees near $500, a cost buyers increasingly factor into their monthly budget alongside the mortgage payment itself, sometimes pricing out buyers who could otherwise afford the purchase price.
A Silver Lining for Buyers
Redfin Senior Economist Asad Khan said the pullback in condo demand is creating opportunity for shoppers still in the market: “The good news if you’re a prospective condo buyer is that sale prices are now falling in some areas, and sellers are offering up concessions, meaning you might be able to get a good deal,” Khan said in the report. Condo inventory has also grown in several metros: listings in Orlando, for instance, are up 30.7% year-over-year, giving buyers there more negotiating leverage than they’ve had in years.
The trend also marks a shift from the pre-pandemic pattern. Condos, single-family homes and townhouses are all still selling below asking at lower rates than they did in February 2019, but condos have closed that gap the fastest of the three property types, now just 3.5 percentage points off their pre-pandemic discount rate, versus a 4.1-point gap for single-family homes and a 4.9-point gap for townhouses. That faster reversion suggests the condo segment, once considered a more affordable entry point into homeownership, is now recalibrating toward buyer-friendly conditions ahead of the broader housing market.
