Condo and Townhome Sales Hit Lowest Level Since 2009

The condo and townhome sector continues to contract, and the latest annual sales numbers make that trend clear. While some nearby markets have shown encouraging momentum in other property types, attached housing is moving in the opposite direction. The most recent annual total stands at 9,259 sales, down from 9,595 one year earlier and marking the lowest level of activity since 2009. This is not a short term fluctuation but part of a longer running decline that has steadily eroded this segment of the market.

Several structural factors have made condos and townhomes more difficult to buy and sell, and these challenges are not unique to Arizona. Financing attached properties has become more restrictive, with lenders often requiring larger down payments in the range of fifteen to twenty percent. Underwriting standards have tightened, and lenders now apply greater scrutiny to building conditions and homeowners associations, adding more friction to the approval process.

Insurance has also become a major obstacle. Premiums for attached properties have risen sharply, and in some cases HOAs have been forced to reduce coverage to manage costs. Certain lenders will not accept the insurance policies negotiated by HOAs, which can derail transactions late in the process. At the same time, HOA dues and special assessments for condos and townhomes have frequently increased faster than general inflation, further pressuring affordability.

Buyer preferences have shifted as well. Demand has increasingly favored homes that offer more space, privacy, and separation from neighbors, leaving densely packed developments at a disadvantage. Although condos and townhomes often carry lower sticker prices than single-family homes, the true monthly cost can be surprisingly high once HOA fees, insurance, and assessments are factored in. For many buyers, these hidden costs outweigh the initial price advantage, contributing to the continued weakness in this market sector.

“To know is to know that you know nothing. That is the meaning of true knowledge.”
一 Socrates

Have a great week, everyone!