What Every Condo Owner in San Diego Should Know Right Now

First off, I am not an economist. I don’t pretend to have a crystal ball to predict the future and I never make guarantees about future outcomes. There are times that lend themselves to make educated guesses about what the future may bring based on trends and other market factors, and this may prove to be one of those.


If you read my last article, you are aware that market forces are pushing residential real estate prices down and we’re in the midst of what I’ve deemed and “Affordability Bubble Burst.” Despite our robust economy, prices appear to be in decline, but not at the speed or depth of what we saw in 2008.  Many homeowners are questioning what they should do: Should you wait it out? Sell and go rent? Keep it and rent it out? Sell and Upgrade? Downsize? Every situation is uniquely different and motivated by your goals and current lifestyle, thus generalized answers are not suitable. That being said, if you’re a condo owner, I have some info to share with you.


Condominiums can be great investments and are truly a good way for first-time-home-buyers to get into home ownership. Condos are typically less expensive than single family residences (SFR) and often provide homeowners with wonderful amenities. They do go up and down in value, just like a single-family home; but the increases in value typically are not as large and the decreases tend to be big and fast.


Since we’re in a market with declining prices, I recommend being extremely vigilant of condo property values. If you’re of the mindset that you are happy where you are and in a good position, then market values do (up or down) won’t affect you much. However, if you’ve been contemplating selling your condo/s over the last year or so, then you need to pay close attention to what the market is doing.


If you own a condo that was purchased between 2010 and early 2016, you’ve probably seen some sizeable equity gains. NOW, may be the time to sell that condo!…especially if your condo is in a complex with an expensive monthly Homeowners Association (HOA) fee. Doubly so, if the property also sits in a high mello-roos district! Why? Mainly because of the reason stated above, a faster decline in values compared to SFRs. So, you want to hedge against steep declines in equity.


Additionally, if you find yourself with a high HOA fee (in the neighborhood of $375/month or higher), getting rid of that monthly cost could translate into more purchasing power – especially if your primary residence is your condo and you’re looking to upsize and buy a single family home! If this is you, this may be the time to act as you transfer your equity to your home purchase and rid yourself of a large monthly condo HOA cost! Again, everyone’s situation is different, and you should consult a tax and legal consultant. 


* This article expresses the opinions of the author and is NOT  to be considered as legal, tax or financial advice.*

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