As we enter the budget season for co-ops, condos, and homeowners’ associations (HOAs) across New York and the United States, there’s a growing concern about rising maintenance fees, common charges, and HOA dues. If you’ve been watching your building’s financials or browsing new listings, you’ve likely noticed that maintenance charges and condo fees have risen significantly over the past year or more.
This upward trend is especially true in New York City, where we see increased special assessments to fund much-needed capital repairs to the city’s aging housing stock. While these increases are a nationwide concern, New Yorkers, in particular, feel the squeeze as more buildings confront the realities of maintaining and upgrading their aging structures.
The Rising Costs: Why Maintenance and Common Charges Are Going Up
Across the U.S., homeowners in community associations—including co-ops, condos, and HOAs—are seeing their monthly fees rise faster than inflation. According to a recent article in The Wall Street Journal, maintenance fees for recently sold co-ops in Manhattan rose 27% in the third quarter of 2024 from just four years earlier, and condo fees rose 41% in the same period. These increases are primarily driven by the skyrocketing insurance, repairs, and maintenance costs, which have pushed fees to levels many homeowners weren’t expecting.
Nationally, HOA dues have also seen a significant jump. In areas like the Seattle metro, dues have more than doubled over the past year, while condo association fees have increased by 6% nationwide. In parts of Florida, increases have been as high as 15%.
Why Are Fees Rising?
Several factors are contributing to this rapid rise in fees:
- Increased Insurance Costs: Natural disasters like flooding and hurricanes have increased insurance premiums, forcing many co-ops and condos to pass those costs on to owners.
- Repairs and Maintenance: Many buildings, particularly in older cities like New York, face more frequent and expensive repairs, such as roof replacements, boiler repairs, and upgrading plumbing systems to meet modern standards.
- Capital Improvements: In response to rising costs and aging infrastructure, many buildings are implementing or updating special assessments to fund major capital repairs. This is particularly true in New York City, where the city’s housing stock requires continuous investment to stay safe and livable.
- Higher Labor Costs: Labor shortages and wage increases for maintenance staff, property managers, and contractors have also increased maintenance charges and HOA dues.
The Impact on Buyers and Sellers
As buyers consider purchasing a co-op or condo in the coming months or sellers prepare to list their properties, it’s essential to understand how these rising costs will impact the market. Buyers will closely scrutinize maintenance and common charges directly affecting monthly housing expenses. Additionally, with mortgage rates remaining high, prospective buyers are more sensitive to total monthly costs, including their mortgage payment and ongoing maintenance or HOA fees.
Sellers must provide up-to-date financial information about their building, including maintenance fees, special assessments, and any upcoming budget changes. As a real estate professional, you must be prepared to explain these rising costs to buyers in the broader context of national and local trends. Buyers will often view a co-op’s history of maintenance increases as an indicator of the building’s financial health, so it’s essential to be transparent and proactive in explaining any increases.
Many buildings are already announcing new special assessments to address increasing capital repairs. These assessments—often for significant repairs like façade work or elevator upgrades—can range from several hundred to several thousand dollars. Buyers should be aware of these potential costs when considering a property, and sellers should be prepared to discuss how these assessments may impact the overall cost of ownership.
Strategies for Navigating Rising Costs
- Review the Building’s Financial Disclosures: Buyers should always review financial statements, board meeting minutes, and any special assessments that have been approved or are being discussed. This will provide a clear picture of what’s coming down the pipeline and how much fees will likely increase.
- Be Transparent with Buyers: Sellers and real estate agents should ensure that buyers are provided with updated information about maintenance fees, special assessments, and future capital projects upfront. This can help avoid unpleasant surprises later in the process.
- Understand the Long-Term Trends: The rising costs for co-ops, condos, and HOAs are part of a more significant trend. In many cases, fees will continue to increase to keep pace with inflation and rising repair costs. Both buyers and sellers need to recognize that these costs aren’t going away, and the best course of action is to plan accordingly.
- Consider Buyer Incentives: Sellers facing high fees or special assessments may want to consider offering incentives, such as credits toward closing costs, to make the property more attractive to buyers concerned about rising costs.
Looking Ahead: What Buyers Should Know
As we approach the new year, monitoring budget updates from building boards and homeowners’ associations is important. These budget decisions will directly impact the market, especially in NYC, where special assessments are becoming more common. Rising costs—combined with higher mortgage rates—can potentially dampen pricing in certain areas. But for savvy buyers who understand the financial landscape, there are still opportunities to invest wisely.
As we continue into this budget season, buyers and sellers should stay informed about these rising costs and plan accordingly. Real estate agents, property managers, and board members must proactively communicate these changes, as they will influence the market and the home-buying experience for the foreseeable future.
If you have questions about how these rising fees may affect your home purchase or sale or need advice on navigating the NYC market during this budget season, please contact me. I’m here to help!
#NYCRealEstate #HOAFeeIncreases #CoOpLiving #CondoLife #SpecialAssessments #RealEstateMarketTrends #PropertyManagement #RealEstateAdvice #HomeBuyersGuide #NewYorkRealEstate
Related Article: Navigating Rising Maintenance and Common Charges in NYC and Beyond: What Buyers and Sellers Need to Know
