Is It Still a Good Time to Buy or Sell a Condo in Orlando?

If you’re wondering how condo sales are preforming against single-family homes in the Orlando area, keep reading as we are going to be doing a deep dive on what the data has to say! Real estate market data is typically released about a month to a month and a half after the actual sales occur, so while we’re sharing this in February, these numbers provide the most up-to-date and comprehensive view of what happened in December of 2024.

Single-Family Homes vs. Condos – December 2024

Why Are Condo Sales Lower Than Single-Family Homes?

While condos remain an attractive option for buyers looking for affordability, they continue to face unique financing challenges and regulatory hurdles that impact sales volume. Here’s why:

1. Stricter Financing Rules for Condos

Unlike single-family homes, condos must meet strict lending requirements set by Fannie Mae and Freddie Mac to qualify for conventional loans. If a condo community doesn’t meet these guidelines, it is considered "non-warrantable," making it ineligible for most traditional financing. Some of the biggest red flags for lenders include:

• Low Reserve Funds – Florida law now requires condo associations to maintain fully funded reserves for structural repairs, making it harder for some communities to comply.
• Pending Litigation – If a condo building is involved in legal disputes (especially regarding construction defects or HOA issues), lenders may refuse to finance units in that building.
• High Investor Ratios – If a large percentage of condo units are owned by investors rather than primary homeowners, lenders may consider it too risky for a conventional loan.

These restrictions reduce the number of eligible buyers who can finance a condo purchase, leading to fewer pending and closed sales compared to single-family homes.

To see the available Condos that do qualify for FHA lending click here.

2. New Florida Condo Laws After Surfside

Following the Champlain Towers collapse in Surfside, Florida passed new legislation requiring:

• Structural Inspections for Older Buildings – Condos that are 30+ years old must undergo mandatory structural integrity reserve studies to ensure safety.
• Mandatory Reserve Contributions – HOAs must have enough cash reserves to cover future repairs, which has led to increased monthly HOA fees and special assessments.

Higher fees can deter buyers, especially those who might have considered a condo as a more budget-friendly alternative to a house.

3. Special Assessments & Rising HOA Fees

Due to the new laws, many condo associations are passing special assessments to cover required repairs. This means buyers may be responsible for additional costs beyond their mortgage and HOA dues. If an assessment is too high, lenders may even reject a buyer’s loan application.

Result: Some buyers who originally planned to purchase a condo are shifting their focus toward single-family homes, where financing is simpler and fewer extra fees are involved.

Key Takeaways from the Data

1. More Single-Family Homes Selling Than Condos

• Single-family home sales outpaced condo sales (2,384 vs. 753), showing stronger buyer demand in that market.
• There were also more pending sales for single-family homes, indicating steady momentum for future closings.

2. Condos Have a Lower Median Price

• The median selling price for condos ($330,000) is significantly lower than for single-family homes ($445,745).
• This price gap makes condos a more affordable entry point for first-time buyers and investors.

3. Slightly Longer Days on Market for Condos

• Condos sat on the market slightly longer than single-family homes (92 vs. 89 days), which aligns with the additional financing and regulatory hurdles buyers must navigate.
• Cash buyers tend to dominate the condo market, but many still evaluate whether higher HOA fees and potential assessments make sense financially.

What Does This Mean for Buyers and Sellers?

For buyers:

• Condos remain an affordable option but come with added due diligence. Buyers should research HOA financials, reserve studies, and special assessments before purchasing.
• Single-family homes offer easier financing and tend to appreciate faster, making them a more flexible long-term investment.

For sellers:

• Single-family homeowners have an advantage in today’s market, with a larger pool of qualified buyers.
• Condo sellers should ensure their community meets lending standards to avoid financing-related sale delays. Pricing competitively is also crucial, as higher HOA costs may deter buyers.

Final Thoughts

While both single-family homes and condos remain valuable parts of the Orlando housing market, condos are facing greater scrutiny due to financing challenges and new legal requirements. Buyers interested in condos should fully understand the financial health of the HOA before purchasing, while sellers may need to adjust pricing and expectations due to a smaller buyer pool.

If you're considering buying or selling in Orlando, understanding these market trends can help you make the best move.

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