The dearth of for-sale inventory at the starter-home level has kept homeownership out of reach for too many people.
However, two recent reports show that condominiums may present the opportunity first-time home buyers have been waiting for, especially with mortgage rates hovering near six-month lows.
Find your lowest rate. Start hereCondo opportunities?
Spring home buying season is underway and hope springs eternal for house hunters.
This year could be big for first-time buyers as estimated annual home price growth slowed to 2.2% in March from 2.7% in February, according to Intercontinental Exchange’s latest Mortgage Monitor. Even more, condo prices project to dip 0.3% in March from a 0.4% rise in February.
“Analysis of ICE HPI data shows a broad-based cooling of home prices, with 90% percent of U.S. markets experiencing slower home price growth compared to three months ago,” said Andy Walden, head of mortgage and housing market research at Intercontinental Exchange.
“Early March data shows condo prices dropping for the first time in more than a decade, with the largest impacts in the Sunbelt, most notably in Florida. While falling condo prices can erode equity levels among existing condo owners, they also afford modest relief to those looking for prospective home buyers. In fact, 95% of U.S. markets have experienced at least slight improvements in affordability compared to a year ago.”
Among the top 100 housing markets, Florida condos had the largest year-over-year price declines. North Port led the way with a 9.4% drop, followed by 7% in Lakeland, 6.5% in Palm Bay, and 6% in both Cape Coral and Deltona. Further, condo values fell in 27 of Florida’s 28 core-based statistical areas.
Outside of the Sunshine State, condo prices fell most in Little Rock, Ark. (-6%), Austin, Texas (-5.6%), Colorado Springs, Colo. (-4.4%), Memphis, Tenn. (-4.2%) and Denver (-3.9%).
The reasons for the decreasing condo prices are multifold. According to the report, upwards of 600,000 multifamily units were completed in 2024 (a level not seen since the 1970s). Condo prices also tend to lag single-family homes in a cool market and best them in hot markets.
For Florida in particular, sellers grapple with ballooning insurance costs and potentially being blacklisted due to the amplifying effects of climate change. Home buyers should always research and talk with their mortgage professional about any property they’re interested in to go over potential environmental impacts from global warming.
Separately, a report from Redfin showed 68.4% of condos sold below their asking price in February compared to 63.3% the year before. It also marked the highest level for a February since 69.1% in 2020. Comparatively, single-family properties sold below asking rose to 64.2% from 61.2% and townhouses went to 59.4% from 54.7%.
“The Florida condo market is in uncharted territory,” said Tim Harper, an Orlando-area Redfin real estate agent. “We’re seeing a massive influx of condo inventory because a lot of senior citizens on fixed incomes can no longer afford their monthly payments, and a lot of other condo owners just want to move because they’re tired of dealing with rising HOA fees and special assessments.”
The table below shows the top-20 cities by condo share sole below list price in February among 52 metro areas with at least 100 sales, according to Redfin:
| U.S. metro area | Share of homes sold below original list price | Y/Y change in share of homes sold below original list price | Median original list price | Y/Y change in median original list price | Average sale-to-original-list-price ratio |
|---|---|---|---|---|---|
| Miami, FL | 92.5% | 6.9 ppts | $450,000 | 7.9% | 91.3% |
| Fort Lauderdale, FL | 92.1% | 5.9 ppts | $257,000 | -3.0% | 88.7% |
| West Palm Beach, FL | 91.1% | 4.9 ppts | $290,000 | -4.1% | 87.7% |
| Cape Coral, FL | 90.4% | 0.9 ppts | $339,000 | -5.7% | 89.7% |
| Jacksonville, FL | 89.8% | 6.7 ppts | $287,900 | 3.2% | 91.7% |
| North Port, FL | 87.0% | 3.1 ppts | $341,997 | -11.2% | 90.6% |
| Tampa, FL | 86.7% | -0.5 ppts | $249,000 | -6.0% | 90.0% |
| Dallas, TX | 85.7% | 12.2 ppts | $294,000 | 6.9% | 92.2% |
| Orlando, FL | 84.8% | 5.1 ppts | $238,710 | -0.5% | 90.8% |
| Houston, TX | 84.3% | 4.4 ppts | $195,000 | 8.3% | 92.0% |
| Austin, TX | 81.4% | -2.9 ppts | $399,950 | -4.7% | 92.2% |
| Minneapolis, MN | 80.4% | 13.5 ppts | $207,500 | 3.8% | 93.5% |
| Des Moines, IA | 77.4% | 4.4 ppts | $242,400 | 1.6% | 96.2% |
| Denver, CO | 77.2% | 17.2 ppts | $354,000 | 1.1% | 94.3% |
| Atlanta, GA | 77.2% | 13.0 ppts | $315,000 | 5.4% | 95.0% |
| Phoenix, AZ | 76.4% | 2.3 ppts | $375,000 | 15.4% | 94.1% |
| Indianapolis, IN | 75.8% | 5.2 ppts | $230,000 | 7.0% | 94.6% |
| Las Vegas, NV | 75.4% | 3.5 ppts | $265,000 | -2.6% | 96.0% |
| Charlotte, NC | 74.4% | 15.3 ppts | $310,000 | 0.0% | 95.6% |
| Nashville, TN | 72.7% | 13.2 ppts | $449,900 | 2.2% | 95.8% |
| Overall U.S. | 68.4% | 5.1 ppts | $349,000 | 4.2% | 95.4% |
The bottom line for home buyers
If you’re a first-time buyer, condos might offer you an affordable path to homeownership.
“The good news if you’re a prospective condo buyer is that sale prices are now falling in some areas, and sellers are offering up concessions, meaning you might be able to get a good deal,” said Asad Khan, senior economist at Redfin.
If you’re ready to buy a home, prepare yourself and talk to a local mortgage professional today.
