Condo Owners Face Dilemma as Rising Costs Make Homes Unsellable

Condo owners across the United States are encountering significant challenges in selling their properties, driven by a confluence of rising homeowners association (HOA) fees, unexpected special assessments, and persistent insurance problems. These factors are not only making units difficult to sell but are also creating hurdles for potential buyers seeking mortgages, leaving current owners in a precarious position.

Will Hudson, a 43-year-old public employee, described his purchase of a two-bedroom condo in Golden, Colorado, in July 2024 as a "greatest mistake of my life." Initially drawn back to a familiar complex from his youth, Hudson found himself dealing with recurring water shutoffs, flooding in common areas, and escalating HOA fees that have reached nearly $470 per month. These issues prompted his desire to move, but the prospect of selling has become a daunting challenge.

His predicament is exemplified by another unit in the same complex, which saw its asking price slashed from $270,000 to $149,000. Although now under contract, the sale has not yet closed. Hudson estimates that selling his own condo could result in the loss of his entire $58,000 down payment, along with additional costs for commissions and closing expenses.

This situation reflects a broader trend affecting condo owners as buildings' increasing operational costs are passed on to residents. Data from HOA-management platform Vantaca indicates that in 2025, 8.5% of condo buildings constructed before 2000 imposed special assessments, with affected owners typically facing bills around $2,500. Over the past four years, the median special assessment has increased from $930 to $1,100.

Market forecasts suggest this pressure will intensify. According to the Vantaca report, approximately 54% of community associations plan to raise their fees in the near future to cover rising expenses, including insurance premiums and new reserve requirements scheduled to take effect in 2027.

These escalating costs erode one of the traditional advantages of condominium ownership: affordability compared to detached homes. When monthly HOA charges and special assessments are factored in, the total cost of owning a condo can rival or exceed that of a single-family house.

National sales data from the National Association of Realtors shows a 2.7% year-over-year decrease in condo and co-op sales in August. In the Mid-Atlantic region, condos now constitute 15% of active inventory, a notable increase from less than 10% before the pandemic, according to Bright MLS Chief Economist Lisa Sturtevant.

Insurance costs are a significant contributor to the problem. As insurers raise premiums or withdraw coverage from certain condo buildings, these increased expenses are passed to owners through higher fees and assessments. Furthermore, buildings lacking adequate master insurance policies may fail to meet federal lending standards, preventing buyers from obtaining conventional mortgages backed by Fannie Mae or Freddie Mac.

Hudson himself encountered financing difficulties when purchasing his unit, as his initial lender rejected the property due to insufficient roof coverage in the HOA's master policy. He eventually secured a loan after agreeing to a larger down payment, but he remains concerned about future buyers facing similar obstacles.

This creates a challenging cycle: rising building expenses lead to higher HOA fees, which in turn deter potential buyers. Additional complications from insurance or reserve funding issues further limit the pool of eligible buyers and financing options.

Prospective buyers are advised by real estate professionals to carefully review an association's reserve studies, insurance policies, structural reports, and the age of critical building systems like roofs and plumbing. Unanswered questions or missing documentation should be viewed as potential red flags, as purchasing a condo involves a financial stake in the entire building's condition and management, not just the individual unit.