Rising HOA Fees Are Becoming a Deal Breaker in Real Estate

HOA fees used to be a line item people glanced at and moved on from, especially when the monthly number looked manageable. Lately, HOA costs are showing up as a real friction point in deals because the increases are not small in some communities, and buyers are paying closer attention to what they are actually getting for the money. Realtor.com reported that the median monthly HOA fee for existing homes was $148 in 2024, up 14.7 percent from 2023, and that the share of listings with an HOA fee has also been creeping upward. (Realtor.com via HousingWire, https://www.housingwire.com/articles/realtor-com-hoa-fees-are-on-the-rise-among-all-home-types/)

That national view matters, but the bigger story is how uneven this has become. In some markets and property types, the jump is modest and predictable. In others, condo fees and special assessments are pushing ownership costs into a range that changes who can buy, how long a home sits, and what people are willing to pay.

Why HOA Fees Are Rising and Why It Is Not Always About Amenities

Plenty of associations are raising dues for straightforward reasons like labor costs, landscaping, utilities, and vendor contracts. Insurance has become a major driver too, especially for condo buildings where the master policy can move sharply year to year. Some associations are also catching up on deferred maintenance, which often reads like a sudden spike even when the underlying problem has been building for years.

South Florida is a clear example of how extreme this can get in high rise condo buildings. WLRN reported that an annual review of certain high rise condo buildings managed by FirstService Residential found average monthly association fees in Miami Dade up nearly $500 per month compared with the prior year, with average monthly assessments running more than $1,900 for those buildings, and around $1,800 for similar buildings in Fort Lauderdale and Palm Beach. (WLRN, https://www.wlrn.org/business/2025-12-05/hoa-condo-costs-florida)

Safety and reserve requirements are also part of the fee conversation in Florida condos. The State of Florida’s announcement about HB 913 and HB 393 describes changes aimed at condo regulation, transparency, and financial relief tied to mandated safety measures, which connects directly to the reserve and repair funding that feeds into association budgets. (State of Florida press release, https://www.flgov.com/eog/news/press/2025/governor-desantis-signs-legislation-delivering-relief-condo-owners) A legal overview of Florida condominium budget reform also notes ongoing legislative and budget rule changes that affect reserve funding and association planning going into future budget cycles. (Varnum LLP, https://www.varnumlaw.com/insights/2025-florida-condominium-budget-reform/)

None of this means every HOA is suddenly unaffordable. It does mean buyers are more likely to treat HOA costs as part of the purchase decision, not an afterthought, and sellers are finding out that a higher monthly fee can narrow the buyer pool even if the home itself is attractive.

How Rising HOA Fees Change Affordability Without Touching the Price

A buyer can love a property and still walk away when the monthly HOA number lands on the table. That is not always because the buyer cannot technically afford it. It is often because the cost feels open ended, especially when the buyer sees a history of rapid increases, deferred maintenance, or a building that looks like it is headed toward a major project.

This shows up in contracts and negotiations in a few consistent ways. Appraisers are seeing more transactions where buyer hesitation is not about the unit, but about the ongoing ownership cost profile once dues, insurance, and reserves are considered together. That hesitation can translate into longer marketing time, more price reductions, or a narrower set of competing offers compared with similar homes that have lower dues or fewer financial unknowns.

There is also a perception issue that is hard to ignore. HOA fees feel like a permanent bill that does not build equity, and that mental framing affects behavior even when the fee is paying for legitimate items like a roof reserve, structural repairs, or insurance coverage. When buyers compare two similar options and one has a higher monthly HOA cost, many will treat it like a higher purchase price even if the list price is the same.

What Appraisers Are Seeing in HOA Heavy Markets

Rising HOA fees do not automatically reduce market value, and an appraisal is not supposed to guess at future fee increases. Appraisals are grounded in market evidence, and the question becomes whether the market is already reacting to the fee level, the financial health of the association, and the perceived risk of upcoming assessments.

Here are a few real transaction patterns that come up.

A condo unit goes under contract at a price that looks consistent with prior sales, then the buyer receives the condo documents and sees a major budget change or a special assessment schedule. The buyer tries to renegotiate, the seller resists, and the deal either resets to a lower number or falls apart. If several similar units have recently experienced the same pattern, the market starts to show it through longer exposure, a wider spread between list price and sale price, or fewer qualified offers.

A second scenario is an appraisal assignment where two comparable sales look similar in size and condition, but one is in a building with much higher dues and a known assessment history. The sales can still be valid comparables, but the analysis has to pay attention to whether the fee difference is already baked into what buyers paid, which sometimes shows up as a consistent pricing gap between buildings that outsiders assume are interchangeable.

A third scenario involves a detached home in a planned community where the HOA fee is rising because the association is funding infrastructure, amenities, or storm related repairs. Buyers often accept a moderate HOA fee for a gated entry and landscaping, but the psychology changes when the monthly number starts to resemble a car payment. In those communities, appraisers are watching whether sales volume shifts toward non HOA alternatives, or whether the community maintains pricing strength because the amenities still command a premium in that location.

Practical Steps Buyers and Sellers Can Take

The most useful move is treating HOA review like a normal part of due diligence, not a box to check at the end. Buyers should ask for the current budget, reserve information, and recent meeting minutes early, then look for signs of deferred maintenance, insurance strain, or a pattern of special assessments. A buyer does not need to become an association expert to spot red flags like repeated emergency assessments, large unfunded projects, or vague disclosures about upcoming repairs.

Sellers can get ahead of this by being prepared to share clear, organized association information. A clean document package does not fix a high HOA fee, but it reduces uncertainty, and uncertainty is what often kills deals faster than the actual number.

Agents can also help by setting expectations up front. When a listing has a high monthly fee, pricing and marketing tend to work better when the fee is explained in terms of what it covers and how the building is managing reserves, rather than hoping buyers ignore it until after they are emotionally invested.

Why Professional Appraisal Services Matter When HOA Costs Are Rising

HOA fees are part of the ownership cost landscape that buyers react to, and that reaction can show up in sales data long before it becomes obvious in headlines. A professional appraisal helps separate perception from measurable market behavior by analyzing comparable sales, marketability signals, and how buyers are actually pricing these communities in real transactions.

If HOA costs or assessments are becoming a sticking point in a purchase, refinance, estate, or dispute, Gulf Stream Residential Appraisal can provide a clear valuation that fits the property type and market context. Getting a quote or scheduling a consultation is a practical next step when the numbers need to be supported, not guessed.