The Shifting Condo Landscape: Why 68% of Units Sold Below Asking Price

In an unprecedented shift for the real estate market, condominiums—once the affordable gateway to homeownership—are experiencing a significant cooling trend nationwide. A striking 68.4% of U.S. condos sold in February 2025 closed below their original asking price, marking a 5.1 percentage point increase from the previous year and reaching the highest February level in five years.

This transformation signals a fundamental change in the condo segment, which appears to be cooling faster than other property types. While townhouses and single-family homes are also seeing more below-list sales, the shift is most dramatic in the condo market, where soaring insurance costs and escalating HOA fees are creating a perfect storm for sellers and new opportunities for strategic buyers.

The Numbers Behind the Cooling Condo Market

The statistics paint a clear picture of the market's direction. Townhouses selling below asking price increased to 59.4% (up 4.7 percentage points year-over-year), while single-family homes rose to 64.2% (up 3 percentage points). However, these increases pale in comparison to the dramatic rise in below-list condo sales.

Perhaps more telling is how close these figures are approaching pre-pandemic norms. Condos are now just 3.5 percentage points below February 2019 levels for below-list sales, compared to single-family homes (4.1 points below) and townhouses (4.9 points below).

The price gap between listing and selling has widened as well. The typical condo in February had a sale-to-original-list-price ratio of 95.4%, meaning units sold for 4.6% less than their listing price. This represents a significant decline from both the 96.4% ratio a year earlier and the nearly 100% ratio observed three years ago.

Rising Costs: The Driving Force Behind the Shift

What's behind this cooling trend? The primary factors appear to be skyrocketing insurance costs and ballooning HOA fees, which have fundamentally altered the economics of condo ownership.

"When you purchase a $400,000 condo today, it often comes with a $500 monthly HOA fee," explains Alison Williams, a Redfin Premier agent in Sacramento. "For many prospective buyers, condos simply aren't the affordable option they once were."

This affordability crisis is particularly acute in Florida, where new safety regulations following the 2021 Surfside condo collapse have led to escalating insurance premiums and special assessments.

"The Florida condo market is in uncharted territory," notes Tim Harper, a Redfin Premier agent in Orlando. "We're witnessing a massive influx of inventory as fixed-income seniors can no longer afford their monthly payments, while other owners are simply exhausted by dealing with rising HOA fees and special assessments."

The numbers in Orlando are particularly striking: condo listings jumped 30.7% year-over-year in February—double the nationwide increase of 15.3%. The typical Orlando condo sold for nearly 10% below its original asking price, with a sale-to-original-list price ratio of just 90.8%.

Geographic Hotspots: Where Condo Markets Are Cooling Fastest

The cooling trend isn't uniform across the country. Some markets are experiencing particularly dramatic shifts in negotiating power:

• Denver, Colorado: 77.2% of condos sold below list price, up 17.2 percentage points year-over-year—the largest increase among major metros

• Virginia Beach, Virginia: 48.4% sold below list, up 16.2 percentage points

• Charlotte, North Carolina: 74.4% sold below list, up 15.3 percentage points

• Seattle, Washington: 55.3% sold below list, up 14 percentage points

• Minneapolis, Minnesota: 80.4% sold below list, up 13.5 percentage points

Florida continues to demonstrate some of the most buyer-friendly markets nationwide. In West Palm Beach, a staggering 91.1% of condos sold below asking price, with units typically closing at just 87.7% of their original list price—a discount of over 12%.

Similarly, Fort Lauderdale saw 92.1% of condos sell below asking price, while Miami reached 92.5%, the highest percentage among all major metros analyzed.

Silver Linings: Opportunities in a Transforming Market

Despite the challenging landscape for sellers, Redfin Senior Economist Asad Khan sees potential benefits for various market participants.

"The good news for prospective condo buyers is that sale prices are now declining in some areas, with sellers increasingly offering concessions—potentially creating opportunities for good deals," Khan explains. "For those priced out of condo ownership altogether, rental rates remain below pandemic highs thanks to the apartment building boom, giving renters leverage to negotiate favorable terms."

For sellers navigating this evolving market, pricing strategy has become crucially important. Redfin agents strongly recommend setting fair, competitive prices from the outset rather than testing ambitious list prices that could lead to prolonged market exposure.

"Extended time on market can create a negative perception among buyers," cautions Williams. "In today's environment, accurate initial pricing is more important than ever for condo sellers hoping to secure timely transactions."

Market Insights: What You Need to Know

Why are condo HOA fees increasing so dramatically?

Insurance costs for homeowners associations have skyrocketed in recent years, particularly in coastal and hurricane-prone areas. Additionally, aging condo buildings often require more maintenance and repairs, while new safety regulations in states like Florida have mandated costly inspections and structural improvements. These expenses are passed to owners through higher monthly HOA fees and special assessments.

Is now a good time to buy a condo?

If you're financially prepared for potentially increasing HOA fees, today's market offers significant negotiating power for buyers. With 68.4% of condos selling below list price nationally, buyers often have leverage to secure favorable purchase terms and seller concessions. However, factor in the total cost of ownership—including possible HOA fee increases—when determining affordability.

What should condo sellers do to attract buyers in this market?

Price your unit competitively from the start—today's buyers are informed and price-sensitive. Consider pre-listing inspections to identify and address potential issues before they derail deals. Be prepared to offer concessions like covering closing costs or pre-paying HOA fees for a period. Finally, highlight any recent building improvements or HOA financial stability to ease buyer concerns about future special assessments.

Which markets still have strong condo sales?

San Jose, California maintains a 100.4% sale-to-list price ratio, indicating condos still frequently sell above asking price. San Francisco, Hartford, and Bridgeport also show resilience with ratios at or near 100%. Locally strong job markets, limited housing supply, and high single-family home prices in these areas continue to support condo demand despite rising fees.

How does this affect the broader housing market?

As condos become less affordable, more buyers are exploring small single-family homes instead, potentially increasing competition in that segment. The shifting dynamics also highlight the broader affordability challenges in today's housing market, where rising costs are limiting options across multiple property types for first-time and budget-conscious buyers.