Oakland, Austin, San Francisco, Denver, Tampa, Seattle, Saint Petersburg, Fort Myers, Sarasota, Boise, Jacksonville, Detroit, New Orleans, Portland, Arlington, Naples, Mesa, Aurora, Reno.
By Wolf Richter for WOLF STREET.
Every housing market dances to its own drummer. Condo prices had exploded. But then in some of these markets, prices began to turn south in mid-2022, in other markets in 2023, and in others in 2024. One of the 2024-peakers already made it on this list, which was fast: Arlington, TX (-13% from the peak a year ago).
In many markets, condo prices have been dropping, but to get on this list, prices must be down by at least 12% from the peak. Smaller cities had big declines too but were too small by population to qualify for this list.
The 19 cities with price declines of 12% to 24% through June:
- Oakland, CA: -24%
- Austin, TX: -24%
- Saint Petersburg, FL: -21%
- Fort Myers, FL: -17%
- Sarasota, FL: -17%
- San Francisco, CA: -16%
- Boise, ID: -14%
- Jacksonville, FL: -14%
- Detroit, MI: -13%
- Denver, CO: -13%
- Tampa, FL: -13%
- Arlington, TX: -13%
- Naples, FL: -13%
- New Orleans, LA: -12%
- Seattle: -12%
- Reno, NV: -12.0%
- Mesa, AZ: -12%
- Portland, OR: -12%
- Aurora, CO: -12%
Prices in all of these 19 cities fell month-to-month topped off by Fort Myers (-2.0%), Oakland (-1.8%), and Saint Petersburg (-1.8%).
All 19 cities had year-over-year price declines, topped of by Saint Petersburg (-14.5%), Fort Myers (-13.8%), and Arlington (-13.1%).
In some densely populated cities, such as San Francisco, condos make up a bigger part of home sales than single-family homes.
But it was a fantastic condo bubble, topped off with a mania, driven by the Fed’s interest-rate repression that included near-0% short-term rates and trillions of dollars in QE, including purchases of mortgage-backed securities (MBS), which pushed down mortgage rates below 3%, triggering the most astounding buying behavior.
In the 10 years to the peak, prices exploded by 200% (Jacksonville, Tampa), 300% (Detroit, Aurora), or even 350% (Phoenix, Mesa). But Phoenix is not on this list because prices dropped by only 11% from the peak so far, and the cut-off is 12%. Mesa is on this list (-12%). And Scottsdale (-12%) didn’t make it because it’s too small by population.
These prices here are seasonally adjusted three-month moving averages of “mid-tier” condos and co-ops in “cities” (not in metros or Metropolitan Statistical Areas) from the Zillow Home Value Index (ZHVI), which is based on millions of data points in Zillow’s “Database of All Homes,” including from public records (tax data), MLS, brokerages, local Realtor Associations, real-estate agents, and households across the US. It includes pricing data for off-market deals and for-sale-by-owner deals. These are not median prices.
Condos are now dogged by a laundry list of issues:
- Too-high prices that exploded over the past few years.
- Big special assessments for long-neglected big repairs.
- Often dizzying increases in HOA fees.
- Being on Fannie Mae’s ever-expanding Condo Blacklist of condo buildings that makes financing a unit very difficult.
- The threat of ending up on Fannie Mae’s Condo Blacklist.
- Mortgage rates that have returned into some sort of normal range, from the interest-rate repression range.
- Foreign-based owners who no longer want to live part-time in the US, such as Canadians, and are putting their condos on the market.
In addition, rentals of condos deal with the supply of new higher-end apartment developments that sprouted up over the past few years. The vacation-rental boom may have also peaked. For investors in long-term rentals and vacation rentals, condos are expensive to carry, and they can quickly become a money pit. And some of these units have started to show up in inventory for sale.
The budding Condo Bust:
In the little tables for each city below, note the sharp month-to-month drops – a sign that the declines are heating up. The drops are not seasonal because the index is seasonally adjusted.
The metrics in each table from left to right: price decline from the peak, change from prior month (MoM), change year-over-year (YoY), and remaining increase since January 2000.
| Oakland, CA, City, Condo Home Prices | |||
| From May 2022 peak | MoM | YoY | Since 2000 |
| -24% | -1.8% | -10.5% | 166% |
Prices dropped to the lowest level since early 2016. That was over 9 years ago. The pace of the price drops has been accelerating: Note the 1.8% drop in June from May, taking the elevator down:
| Austin, TX, City, Condo Prices | |||
| From Jul 2022 peak | MoM | YoY | Since 2000 |
| -24% | -0.9% | -6.0% | 116% |
Lowest since April 2021.
| Saint Petersburg, Fl, City, Condo Prices | |||
| From Oct 2022 peak | MoM | YoY | Since 2000 |
| -21% | -1.8% | -15% | 210% |
Lowest since 2021. Note the 1.8% month-to-month plunge. Taking the elevator down:
| Fort Myers, FL, City, Condo Prices | |||
| From July 2022 peak | MoM | YoY | Since 2000 |
| -17% | -2.0% | -14% | 147% |
A 2.0% plunge in June from May and a 14% year-over-year plunge: also taking the elevator down:
| Sarasota, FL, City, Condo Prices | |||
| From Jul 2022 peak | MoM | YoY | Since 2000 |
| -17% | -1.3% | -12.4% | 158.4% |
Note the big month-to-month drop, going down at a brisk pace.
| San Francisco, CA, City, Condo Prices | |||
| From May 2022 peak | MoM | YoY | Since 2000 |
| -16% | -0.5% | -1.5% | 141% |
Back to early 2015.
| Boise, ID, City, Condo Prices | |||
| From Jun 2022 peak | MoM | YoY | Since 2001 |
| -14% | -0.1% | 0% | 221% |
Back to 2021.
| Jacksonville, FL, City, Condo Prices | |||
| From Nov 2022 peak | MoM | YoY | Since 2000 |
| -14% | -1.2% | -10.5% | 161% |
Back only to early 2022.
| Detroit, MI, City, Condo Prices | |||
| From Sep 2021 peak | MoM | YoY | Since 2000 |
| -13% | -0.3% | -4.1% | 270% |
Where prices had first been in 2018.
| Denver, CO, City, Condo Prices | |||
| From Jul 2022 peak | MoM | YoY | Since 2000 |
| -13% | -0.9% | -7.1% | 142% |
Back to July 2021.
| Tampa, FL, City, Condo Prices | |||
| From Sep 2022 peak | MoM | YoY | Since 2000 |
| -13% | -1.2% | -9.5% | 280% |
| Arlington, TX, City, Condo Prices | |||
| From Jun 2024 peak | MoM | YoY | Since 2000 |
| -13% | -0.6% | -13.1% | 244% |
Prices had soared by 262% in the 10 years to June 2024. Half of that increase came during the four years from mid-2020 through mid-2024.
| Naples, FL City, Condo & Co-op Prices | |||
| From Aug 2022 peak | MoM | YoY | Since 2000 |
| -13% | -1.1% | -9.9% | 167.3% |
These condo bubbles are quite something. Prices exploded by 73% in just two years. They have unwound about one-third of it now – roughly the spike of April, May, June, and July of 2022. Buyers were just nuts:
| New Orleans, LA, City, Condo Prices | |||
| From Jun 2022 peak | MoM | YoY | Since 2000 |
| -13% | -0.2% | -2.5% | 100% |
Back to 2016.
| Seattle, WA, City Condo Prices | |||
| From Jun 2022 peak | MoM | YoY | Since 2000 |
| -13% | -1.1% | -4.4% | 140% |
Back to November 2017.
| Reno, NV, City, Condo Prices | |||
| From Jun 2022 peak | MoM | YoY | Since 2000 |
| -12% | -0.4% | -2.7% | 254% |
| Mesa, AZ, City, Condo Prices | |||
| From Aug 2022 peak | MoM | YoY | Since 2000 |
| -12% | -0.4% | -4.8% | 210% |
| Portland, OR, City, Condo Prices | |||
| From Jun 2022 peak | MoM | YoY | Since 2000 |
| -12% | -0.6% | -4.3% | 113% |
Back to 2016.
| Aurora, CO, City, Condo Prices | |||
| From Jul 2022 peak | MoM | YoY | Since 2000 |
| -12% | -1% | -7% | 213% |
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Gen Z and Gen Milli rejoice
Condo prices should decline however the HOA fees and taxes have in general have climbed so high the numbers don’t work So well for folks looking for reasonably priced monthly fees In a place to live
At a low enough price anything works and even then insurance and other prices should come down.
In 2003 the condo I still have in Vegas was bought for 88k in 2010 when I purchased the property it was 30k.
Anything can happen in real estate just takes time.
My condo is crashing! Guess I’ll put all my money in something stable, like some bits in the computer.
Interesting to see Aurora, CO. Mostly because when I used to live there we called it Saudi Aurora because it was way out there in the Middle East. Also, not the most desirable area because of its distance from everything.
Great to see! Condos must crash first. Then single family homes. Good news for the younger generation!
Yes condos are the Canary In The Coal Mine. Next to fall are the outlying areas.
I wonder, or is it possible that prospective buyers are avoiding them for the reasons Wolf mentioned? If so, wouldn’t that cause single family homes to be more desirable?
My sister, daughter and I all sold our condos in Florida, Denver, and California and would never return to one. People moan about the headaches of owning a home but there’s nothing like paying HOA fees and still getting hit with special assessments every few years to give you an epic migraine. Then there’s dealing with the arguments and drama and having to threaten owners who are delinquent on HOA with a lien. I hate drama.
The sale of our condo almost didn’t fly because the mortgage lenders were being such jerks about one single month out of ten years they said our reserves were low. Fortunately the buyers were able to cough up an even bigger down payment.
I think these issues are much more apparent these post-pandemic days. I do realize there are some advantages. My elderly parents were happy in their condo for many years until they weren’t.
Condos crash first, then spread to single family homes. People aren’t buying because condos, townhomes and SFH are too expensive. Once prices drop back to reality then first time buyers will be back.
Watch out below!!! Going to be fun being a home buyer again
If condo prices in a given city fall. does that exert upward pressure on single family home prices in the same city, assuming the city population isn’t shrinking long term?
Scratch that.
I think if condo prices fall it exerts downward pressure on single family homes.
But I think it also exerts downward pressure on new home starts.
Two things just jump off the page.
Reno’s decline in the 2008 bubble! Could be the worst percentage wise in recent history
Most of the current dramatic declines showing no signs of stabilizing are in Florida.
FL has a ways to fall. I FL markets end up like Oakland and drop back to 2016 prices.
FL prices ”need to” and very likely Will ”fall back” quite a bit farther than ’16 prices INVHO Dave.
Been involved at some level in FL RE since 1950s era with dad and granddad in RE and construction and development, but, WHO NOSE?,
”This time is different.” may actually turn out, eh?
Don’t get your hopes up too far, far damn shore…
Hope you’re right. When crashes do occur they tend to over correct. We’ll see what happens.
Florida has just begun. 50% declines are not uncommon for condo
(location specific) in the 50 years I have been here. Condo fees that were 200 5 years ago are 600 now, or more.
I remember when my son was born, mid nineties, Ft Lauderdale. Banners on the sides of waterfront condos all down A1A, 25k to 35K. That not the down payment, that was the price.
If only I had half a million to buy some up at the time.
If another hurricane hits, well, that will be a nail the coffin can’t handle.
Condos, the poor’s man way to show the world you “made” it to the homeowner class and living the American dream, if you believe in the whole homeownership is equivalent to making it or living the American dream ethos.
Although, in HCOL areas, condos is not that much of a poor’s man way anymore as compare to the past…so it’s like a double whammy, you don’t get the land underneath your shelter, you get a shaft of paying ever increasing HOAs, subject to some crazy HOA members and rules and likely get to share walls with your neighbors…oh what a great deal..this is also not to mention IF there’s price correction/crash, condos are the first to go….Welcome to the owner class though, you’ve made it.
Poor man has a condo? What is this you speak of. But it could be true, one step above an appt.
If you can’t afford a horse get a dog, can’t afford a dog, get a cat, then a bird then a weasel then a fish then a pet rock then a woman.
Many condo towers are in different locations than single-family homes. For the past decades, nearly all new construction in central areas of cities has been condo and apartment towers, not single-family houses, mostly higher-end stuff. And the single-family houses were torn down to make room for big buildings. So if you want to live miles from the center of a big city, buy a house. If you want to live in the center of a big city, get a condo or rent.
Nice condos cost many millions of dollars, tens of millions of dollars, hundreds of millions even… In 2019, billionaire Ken Griffin, founder of Citadel, paid $238 million for a penthouse condo overlooking Manhattan’s Central Park. So maybe he overpaid a little. But who cares.
The point is that Phoenix_Ikki’s first sentence — “Condos, the poor’s man way to show the world you “made” it to the homeowner class” – is mean-spirited ignorant BS.
Thank you
Agreed. Phoenix_Ikki hit the nail on head. Condos are a hybrid version of home ownership. All the bad things of home ownership and few if any of the good. Add in, when a larger portion of the condo owners default on their HOA fees, everyone else has to pick up the tab. Did one in a nice are of Southwest DC where a list of all the defaulted condo owner’s name were posted in the lobby of the condo.
Noisy? Get a condo on the end and hang a layer of rock against your shared wall.
Interesting to see that the prices in FL (except Tampa) are closing in on 2007.
Here in 11570 it’s To Da Moon!!
Howdy Folks and WOW. NO more peaking and the downward trend is officially here ????? I sure think so. You Youngins better continue praying the hissing continues without a POP. Really fun times and Boy, isn t this great?????
Disclaimer: I live in a single floor condo (because I don’t do stairs particularly well these days)
Q – What’s the difference between a Condo and a Venereal Disease?
A – You can get rid of a Venereal Disease.
Condeos aren’t all bad. All the people who want to live “on the water” have a chance without spending 10 times the price for a single-family home. The problem is that people are tightwads. It’s a microcosm of the federal budget mess. Infrastructure becomes outdated if not properly maintained. Owners have generally chosen to kick the can down the road on funding reserves until the Florida legislative idiots require that they maintain them. Why not make all of the minutes and financials available so the market can decide what something is “worth?” You can find out more about a $9k car with a CarFax report than you can about a $900k condo. Let the free market decide.
Maybe the whole narrative of economic growth of
“So goes housing so goes the economy” has played out and there are new horizons driving the economic activity .
Maybe higher rates , for sure AI wealth explosion and the growth of PE equity funds and their private banking initiatives.
So far the drops in housing prices have not crept into the economic engine that is still producing GDP growth which may be at the expense of deficit spending.
My neighbor in east Texas has a condo in Gulf Shores Alabama who would like to sell.
He says condos are not selling
He bought his for 250k in 2015 and says the ones listed are at 550k.
Lower prices will bring out the buyers always does for beach front property. So the smaller markets match up with the ones mentioned by Wolf!
I had a hard time sleeping last night so I spent a few hours online looking at…
Condo boat slips
Yes, this is a thing. I like boating, but live in a hot, dusty, landlocked part of the country so at times I fantasize about a 2nd home as a boat at my own slip. I wanted to buy one once when prices were significantly cheaper ($60k for a ~35’ slip) but the now ex-wife vetoed it. That same slip is easily double that cost in the past 15-20 years.
While Zillow is not the best way to find them I set up a search for “boat slip” and roamed the coasts & Great Lakes.
While amazingly you can find some great deals in some out if the way places, what amazed me was the HUGE variability in HOA fees. From mid-double digits par month to many hundreds of dollars. Sometimes the difference between two marinas next door to each other was over $300/month!
Now I understand “amenities” can add up in costs, and a slip with none in the middle of nowhere has rather minimal overhead expenses, but imagine paying up to $8000/yr into a boat slip HOA. And you’re still paying insurance and taxes on these.
I see this as yet another softening market. The HOA fees are not coming down, but the prices are. I may yet get my “floating” second home one day.
Loving the feel of this.
What’s interesting is even though Japan participated in QE their housing market barely budged and it’s an island! It’s said that during the 1980’s housing bubble just the land under the Imperial Palace was worth more than ALL the real estate in California!
Since their QE started, in 2012, the home price index for all of Japan has surged 70%.
https://tradingeconomics.com/japan/housing-index
But home prices in Tokyo and Osaka have surged much more.
Both cities are on the # 1 & 2 preferred places that Chinese buy properties.
Saying among Chinese goes something like – whatever it is, if Chinese start to buy, price will skyrocket.
So far housing market in Orange County can be explained by this saying – mission Viejo, San Clemente became Chinese favorite since the end of 2024 & look @ pricing in these two cities when price in most OC drops 😮
wolf, Don’t you think to come to the 2019 level of affordability on income basis, we need to see atleast 40% reduction in prices in both Single Family and condos.
Remember inflation went crazy since then.
Factor that in!
‘In addition, rentals of condos deal with the supply of new higher-end apartment developments that sprouted up over the past few years.’
This is a main driver in my area. Multi family(or apartments) were not sought after nor approved for a good while. That situation has changed dramatically in the last two years with more Multfamily coming online monthly and plenty in the pipeline.