Condos are subject to huge booms and busts. But these cities are more special than others, so to speak.
By Wolf Richter for WOLF STREET.
After the price explosion during the pandemic QE era and before, condo prices have been experiencing severe downdrafts in many markets. At the steep end, drops from their peaks are approaching 30% in some cities, such as in Oakland, CA (-29%), and St. Petersburg, FL (-28%) or exceeding 30%, such as Cape Coral, FL (-31%).
But there are some markets that are special: Condo prices either plunged enough in this iteration of the Condo Bust — or never rose enough — to where current condo prices are below where they’d been at their respective peaks in 2005-2007 during Housing Bubble 1.
Oakland, CA: Prices of mid-tier condos dropped another 0.6% in December from November, seasonally adjusted, and by 13.1% year-over-year, to $464,800, down 29% from their peak in May 2022, and back where they’d first been in late 2005. They’re now 2% below the peak of the wackadoodle prices of Housing Bubble 1 in April 2006.
Chicago, IL: The City of Chicago – not the metropolitan area of Chicago – is one of the cities where Housing Bubble 1, in terms of condos, had been majestic, and the plunge afterwards had been even more majestic, and then there was another price surge, but it petered out, and prices have been wobbling along below the peak of Housing Bubble 1, piercing it only briefly a couple of times.
Prices of mid-tier condos inched up by 0.1% in December and were up by 1.6% year-over-year. At that level, they were still 1% below the peak of Housing Bubble 1 in April 2007.
Methodology and data: These prices here are seasonally adjusted three-month averages of “mid-tier” condos and co-ops in “cities” 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.
Cape Coral, FL, Epic Boom-Bust, Boom-Bust.: Prices of mid-tier condos in December plunged another 1.2% from November, and by 17% year-over-year. Since the peak in July 2022, prices have collapsed by 31%.
But the price explosion from 2020 to mid-2022 had been so majestic that this 31% plunge hasn’t even undone all of that spike.
At just under $200,000, prices of mid-tier condos are now 16% below where they’d been at the peak of Housing Bubble 1 in July 2006.
Fort Myers, FL, another Epic Boom-Bust, Boom-Bust: Prices of mid-tier condos plunged 1.0% in December from November and 17% year-over-year.
Since the peak in July 2022, prices have plunged by 25% and are now back to where they’d first been in mid-2006, and below the Housing Bubble 1 peak in September 2006.
St. Louis, MO: Prices of mid-tier condos fell 0.9% in December and are down 1% year-over-year. The peak of Housing Bubble 2 (September 2023) didn’t quite make it back to the peak of Housing Bubble 1 (May 2007), before prices began to sag again, and in December 2025 were 8% below where it had been at the peak of Housing Bubble 1 in May 2007.
In Silver Spring, MD, which neighbors Washington DC, prices of mid-tier condos in December inched down 0.1% from November and by 1.9% year-over-year, and are now 12% below the peak in August 2006 during the phenomenal Housing Bubble 1, when prices of mid-tier condos exploded by 78%, before collapsing and giving up more than the entire gain by mid-2012.
Baton Rouge, LA: Prices of mid-tier condos fell 0.6% in December, down 1.7% year-over-year, down 4% from the peak of Housing Bubble 1 in September 2008 and back where they’d first been in mid-2007.
Lafayette, LA: Not exactly a bubble market in recent years, just some ups and downs over the two decades since the Housing Bubble 1 spike.
Prices of mid-tier condos in December 2025 were 15% below their peak in January 2008, and were below where they’d been in September 2003, the extent of the ZHVI condo data.
And in case you missed it: Sales of Existing Homes in 2025 Drop to Lowest since 1995, Sellers Massively Yank Listings off the Market, Waiting for Spring
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I got a feeling that tonight’s gonna be a good, good night. – Black Eyed Peas
LOL, great comment! This time no one has this coping ability; it’s going up in flames.
I’ve never considered buying a condo for investment over an SFH or MF until recently but they are probably the most relatively attractive thing right now. Still needs another 20-30% to look good in absolute terms though.
Given birthrates, a SFH is going to be as demanded as Bates mansion style properties are now. Far more single parents with single kids that have no real need for yards, etc.
Yep that’s the other thing, and on the supply side my suburb (like most of them) is full of 3-5 bedroom homes currently occupied by empty nester boomers. Eventually this stuff is going to flood the market. I invested heavily in downtown real estate post GFC and it worked out pretty well, hopefully I get another crack at it because I still think long term the cities are the place to go.
MW: Trump tried to give Powell one last shove out the door. Now he’s likely to stay at the Fed until his term as Governor expires in 2028.
They’re both major a$$holes and deserve each other.
Powell very much a political figure to land the position he has . Trump has a huge ego and always wanted to go into politics and landed the presidency . I don’t love every decision that Trump makes but I believe he tries to make decisions for the future of USA in trying to get manufacturing brought back to USA .
Not easy to go against Wall Street and the Fed . I love a disruption in the path we had been headed .
Condos are bought by a few different types of people – people looking to make a fast profit, medium to low wage earners just wanting a place to call their own, unhappy control freaks who feel a need to control and snoop-on other people, and seniors who want a safe clean place with little yard maintenance.
The HOA fees for many condos are highway robbery. Oh – and the moronic rules are also a nightmare.
That is a strange comment. The two times in my life I lived in a condo I was a well above average wage earner. The first was when I was young and single and loved living in a big city. The second was after my wife and I moved to a different city. We were unsure of where we wanted to live or if we wanted a house (we were doing lots of traveling for both work and pleasure so a house seemed too much). We figured that we would buy a condo and live there for a couple of years and then move to where we decided we wanted to. We figured a condo was easier to sell or would at least be easier to rent out if we had to.
Both times the HOA fees were bargains for the annemities provided.
“Both times the HOA fees were bargains for the annemities provided.”
They aren’t anymore.
It’s a nonprofit structure. Who exactly is committing the “highway robbery” claimed?
Not much insight here.
These statements over generalize condo ownership with some very broad stereotypes that I didn’t experience. I bought a condo after a divorce as I didn’t want to deal with any yardwork, etc. I still own it but now rent it out. It is located in N. County San Diego pretty close to the coast (>1.5 Miles). No medium to low wage earner would ever be able to buy this today and in the 16 years I have owned it have yet to have any issues with unhappy control freaks. Pay around $400/mo for HOA which includes all water usage, trash, exterior home insurance (internal insurance is ~$500/yr) as well as a pool, spa and park area. All of these “costs” are beneath what I pay on my SFH, just separately and less predictably.
HOA rules can be annoying, but they exist to manage shared living spaces and prevent conflicts and as I previously mentioned, I have not had any issues in all of the years I have owned it. I understand that others’ may not have had as positive an experience but the condo I have has turned out to be a great long-term investment for me. No matter whether a condo or an SFH, everyone needs to do their respective due diligence when acquiring any property to make sure it is the right fit for their family.
People don’t understand that HOA fees pay for things most of which you would have to pay for individually if not for the HOA. They think the money just goes into a black hole.
If you are considering the purchase of a condo in Cape Coral or Fort Myers which are both in Lee County Florida make sure you understand the threat of flooding. After recent damage from hurricanes city, county and federal rules and guidelines are being updated or have been updated. Familiarize yourself with the FEMA Flood Map Service and the the Cape Coral Flood Protection portal and be certain your property is covered by the National Flood Insurance Program (NFIP) or a reliable insurance provider.
Keep in mind Cape Coral is built upon dredged coastal wetlands.
Always read the condo docs before pushing the buy button. After hurricane Ian hit Punta Gorda, the condo owners were hit with a $125,000 per unit assessment. Many were caught unaware that fee was to cover just the insurance deductible.
Right Arm G:
When I was estimating tons and tons of Condo rehab, especially the structural updates clearly needed in the early oughts, mostly very badly needed for condos built in FL, it was frequently necessary to be very clear about the very clear deficiencies, especially those built prior to local adoption of the 1994 code. I have read in retirement that this has become even more exacerbated since the collapse a few years ago in SE FL…
Many times, the assessment was actually MORE than the original price to buy.
And, IMVHO, this is a distinct possibility going forward for any condo in FL..
Condos are doing very well here in the Swamp. Prices are holding up for the most part.
A lot of people I used to know in this area used to be single family homeowners. I see them occasionally in diners and shopping. Most have moved to high rise condos in their retirement years. Perhaps they don’t like to, or can’t do all the home maintenance. Some are still able bodied.
I find this strange, as in retirement, one has much more free time to do the outside maintenance, and landscaping. I for one like having a lot with green space around me. I contract out a lot of the routine maintenance and do only the things I like to do.
10-4 SC:
I am in the same focus, with a couple dozen ”bearing” bananas, three or four bearing mangoes, 3 bearing avocadoes, a couple of bearing figs, and a couple of bearing papayas here in the ”saintly part” of the greater TPA bay area..
Perhaps Voltaire said it best in ”Candide” eh?
Heck, why retire? If it’s so much fun just change to being a landscaper.
Hmm…I wonder what a growth line (starting at 2003) with a 2% upward slope might look like on all these charts.
The ZIRP-induced speculative madness/volatility has been going on so long, we tend to forget that for most of the time historically RRE might gain 2% per year (not 20%…)
“Been up and down this highway, haven’t learned a goddamn thing.”
I am very familiar with the Chicago real estate market. In the last 30 years the developers have built a lot of condos. A lot of condos are just converted apartments.
Now on top of that situation. There is a huge boom of brand new luxury apartment buildings.
Condos are a risky proposition in fire and hurricane prone areas. Many HOA are going bust insuring the properties. If prices drop to back below pre-pandemic levels, it’s prudent to check the HOA balance, current special assessments and just the overall condition of the exteriors, parking and common areas.
I spoke with a realtor on Tuesday about the Orange County, CA condo market. One specific unit was about 30% over priced without even considering the HOA is using special assessments to cover the increase in insurance which apparently lapsed last year. I imagine the reserves have been depleted and the board doesn’t know what to do.
True, as the older condos in Florida are having to pay for special assessments for structural repairs. Hence these condo prices will decrease. That is why I would not live in a condo that has more than 3 stories.
Fortunately due to insurance reforms signed into state law, property insurance in Florida has decreased. For our townhome about 2 miles from the beach in the Florida panhandle (eastside of Panama City Beach), we are paying about 25% less this year compared to last year in the HO-3 premium.
Our HOA regular assessment decreased about 10% this year compared to last year. I noticed the same for other townhomes as far as decrease in property insurance and HOA regular assessment, and sales volume has increased for townhomes priced at 2021 levels (about 20% below all time high price set in 2022).
I’m in Florida now making low-ball cash offers on condos. Lots of talk on the Internet. I do.
My brother is in the process of selling his home in Silicon Valley. It will most likely sell for a couple of million. He’s moving to a senior community near his grandchildren, just north of San Francisco in Marin County. He is paying just $85,000 for a one-bedroom condo!!! He said that the price collapse since Covid is the reason. They were offering at $140K. Similar condo prices before Covid could reach $400,000. He will do some refurbishing and new appliances, but it is still a bargain in the area. Could be an outlier.