Condos are Becoming More Challenging to Sell in 2025
Selling a condo in 2025 comes with more challenges than ever. It’s not just about price anymore. Buyers are digging deeper, asking tougher questions, and paying close attention to everything from reserve funds to special assessments.
One major factor? Higher interest rates have reduced what buyers can afford. After climbing steadily from 2022 through 2024, rates have only recently started to ease. But many buyers are still cautious, focusing more on financial stability and long-term costs than ever before.
See below for a graph of Federal Funds Effective Rate:
The Biggest Challenge? Buyers are asking more questions.
One of the first things buyers want to know is whether the building is financially sound. That means reviewing reserve studies, upcoming repairs, and any history of special assessments. Some buyers are even asking to see HOA documents before making an offer, or to speak directly with board members.
But what if you have a special assessment?
If your HOA has a special assessment coming, transparency makes all the difference. Sellers who disclose it early, share financials, and explain the context tend to see better results. Offering to cover part of the cost or adjusting the price can also help keep deals on track.
US Existing Condo/Co-op Sales (I: USECCS)
Another consideration for buyers? HOA dues.
As costs rise across the board, buyers want to know what their monthly fees cover and whether increases are expected. Boards can make a big impact here by clearly outlining expenses and sharing forward-looking plans, not just current numbers.
But isn’t it about the price anyway?
Nowadays, it's a bit more complex than that. Even if a unit is priced competitively, concerns about repairs or high fees can push buyers away. That’s why more sellers are getting appraisals upfront to back up their price and give lenders more confidence.
So what can you do as a board member?
Well, HOA boards may not be involved in sales directly, but how they manage the community plays a huge role. Organized records, clear communication, and proactive planning can go a long way in helping owners sell and helping buyers feel confident about saying yes!
Key Definitions that might help:
Reserve Study: A report that evaluates the physical condition of major HOA assets (like roofs or plumbing) and estimates how much money should be saved for future repairs or replacements.
Special Assessment: An unexpected, one-time fee charged to homeowners when the HOA doesn’t have enough in reserves to cover a major expense.
HOA Dues: Monthly or quarterly fees paid by homeowners to fund ongoing maintenance, insurance, management, and reserves for the community.
Interest Rate: The cost of borrowing money, often shown as a percentage. Higher mortgage rates mean higher monthly payments for buyers.
Appraisal: An unbiased estimate of a property’s value, often used by lenders to determine how much they’re willing to finance.
Financial Soundness: Refers to whether the HOA is managing money responsibly, having enough reserves, staying within budget, and avoiding frequent special assessments.
