Condo prices dipped 2% in May marking second-largest decline on record, report finds

Condo prices experienced a slight decline last month, representing the second-largest drop since 2012, according to recent data from Redfin.

Prices fell year-over-year to $354,100 in May, with the online real estate company noting that the falling cost is occurring because there are about 80% more condo sellers than buyers in the housing market. 

According to Redfin’s report, many condo owners are attempting to unload their condos due to rising HOA fees and insurance costs, and some homeowners’ associations are distributing massive taxes, and this factors into consumers' hesitancy to buy a condo.

Condo prices falling faster than housing prices 

Why you should care:

Redfin reported that sales of condos dipped almost 12% year over year in May, which is more than three times as much as sales for single-family homes. 

Condos are now viewed as a risky investment in many parts of the U.S. with a condo going under contract in May in 46 days compared to single-family homes going under contract in 38 days.

With condos sitting on the housing market, property listings are accumulating as the total supply of condos for sale, which Redfin refers to as active listings rose to the highest level in 10 years in May, while single-family homes for sale reached its highest point since 2019.

Redfin explained in their findings that as prices fall and property listings hang around on the market, buyers seeking condos could find sellers willing to make accommodations and/or sell for the property for less than their asking price. 

Where are condos affordable in the U.S.?

By the numbers:

Florida and Texas are seeing a steep decline in condo prices in their areas. Redfin noted that Deltona, Florida’s median condo sales price fell 32.2% year over year in May, followed by Crestview, Florida (-32%), Houston (-23%), Oakland, California (-20.3%), and Tampa, Florida (-19%). 

Condo sales also dropped significantly in Dallas (-33.3%), Palm Bay, Florida (-32.8%), Phoenix (-32.7%), Port St. Lucie, Florida (-31.5%) and Orlando, Florida (-31%). Florida is home to seven of the 10 metros with the largest sales declines.

Separately, several housing markets in the Midwest and Northeast are trending upward with condo prices. New Brunswick, New Jersey (14.9%), and Pittsburgh (14.1%) saw the highest increase, but in Indianapolis, condo sales soared 27%, followed by Portland, Maine (19.2%), and Charleston, South Carolina at 11.5%.