Condominiums have gotten cheaper in recent months, but that doesn’t automatically make them a bargain.
In July, condos and co-ops in the U.S. sold for a median price of $349,186, down 2.1% from a year earlier, according to Redfin sales data. Over the same period, the median price of a single-family home rose 1.4% to $466,396.
Redfin defines condos as individually owned units inside of multi-unit buildings, such as apartments. With condos, buyers get ownership of their individual unit along with a share of the building’s common areas. Owners typically pay monthly dues to a homeowners association that manages maintenance, insurance and larger repairs of their building.
While condo prices may be falling, there are usually a number of hidden costs that buyers still have to pay. Rising HOA dues, insurance premiums and new reserve requirements are already discouraging buyers — and in many cases, those higher costs are baked into the lower sale prices, Redfin reports.
The price drop for condos is largely driven by oversupply, says Redfin. As of May, there were about 80% more condo sellers than buyers. In that month, active condo listings climbed to their highest level in a decade, and homes took longer to sell than in any May since 2015.
