The condominium market has reached a critical point, with a 2.2% price drop marking one of the most significant annual declines since 2012, amidst a baffling imbalance between sellers and buyers.
At a Glance
- The median U.S. condo price fell 2.2% year-over-year in May to $354,100, the second-largest decline since 2012.
- A new Redfin report shows a massive imbalance in the market, with 83.5% more new condo listings than pending sales.
- A surge in listings is being driven by skyrocketing HOA fees and crippling property insurance costs, especially in coastal areas.
- Condo sales have plummeted by nearly 12% from a year ago as high mortgage rates and financing issues sideline buyers.
A Market Overwhelmed by Sellers
The U.S. condominium market is grappling with a severe downturn, as a flood of new listings overwhelms a shrinking pool of buyers. According to a new report from the real estate brokerage Redfin, the median condo sales price dropped 2.2% in May from a year earlier, the second-steepest decline recorded since 2012.
The median price for apartments dropped by 2.2% compared to last year — marking the second largest decline ever recorded. 📉 Housing market shifts are real! Stay informed and ahead. 🔔 Follow me for more updates! ♥️ #RealEstate #HousingMarket #PropertyPrices #MarketTrends… pic.twitter.com/sWiYyhRcC4
— Solix Trading (@Solix_Trade) July 3, 2025
The price slump is a direct result of a massive supply and demand imbalance. The Redfin report, released on July 1, 2025, found that there were 83.5% more new condos for sale than there were pending sales, a clear sign that sellers far outnumber buyers.
The Soaring Cost of Condo Ownership
The glut of condos on the market is being fueled by the skyrocketing costs of ownership. Many condo owners are being forced to sell due to a “double whammy” of rapidly increasing Homeowners Association (HOA) fees and crippling property insurance premiums.
The insurance crisis is particularly acute in coastal states like Florida, where some condo associations have seen their insurance costs increase by as much as 400% due to heightened risks from climate change. These costs are passed directly on to owners through higher HOA dues, making ownership unaffordable for many. As a result, the condo price declines have been most severe in Florida cities like Deltona and Crestview.
Financing Hurdles for Buyers
While sellers are rushing for the exits, potential buyers are facing their own set of challenges. Persistently high mortgage rates have strained affordability across the entire housing market. On top of that, condo buyers often face unique financing hurdles.
“It’s a slow housing market across the board, but condos have been hit particularly hard,” Aditi Jain, a Redfin Premier real estate agent in Boston, said in the company’s report. “A lot of condo associations don’t allow buyers with FHA loans, which is limiting sales.” This further shrinks the pool of potential buyers, exacerbating the market imbalance and putting downward pressure on prices.
