California Condo Owners Are Getting $26,000 Special Assessments; HOA Fees Are Soaring; Why Buyers Need to Underwrite the BUILDING Too
California condos have always been the “more affordable” way into a lot of expensive markets.
But there is a problem getting harder to ignore:
The monthly mortgage payment is only part of the cost.
HOA dues are rising.
Insurance costs are rising.
Buildings are aging.
Reserve accounts are getting tested.
And some owners are getting hit with massive special assessments.
The Los Angeles Times reported today that owners at a San Clemente condo complex
were recently assessed $26,000 per unit for roof replacement. Experts quoted in the
story said assessments above $20,000 are becoming more common as buildings age,
insurance costs rise and required repairs catch up with associations. Los Angeles Times
That is not a rounding error.
That can change the economics of owning the condo overnight.
And for buyers, it is exactly why I keep saying:
You are not just qualifying for the unit.
You are qualifying for the building.
I. HOA FEES ARE BECOMING A BIGGER
AFFORDABILITY ISSUE
California condo buyers already have a tough affordability equation.
According to the California Association of REALTORS®, the median condo or townhome
price in the second quarter of 2026 was $670,000.
A buyer needed roughly $166,800 of annual income to qualify for the estimated
monthly payment, assuming 20% down and the rate used in C.A.R.’s affordability
calculation. California Association of Realtors
And that is before we start talking about a surprise assessment.
A condo with a $500 monthly HOA payment can feel very different from one with a
$900 payment.
A condo with a $26,000 assessment is a completely different conversation.
The question is not just:
“Can I afford the mortgage?”
It is:
“Can I afford the mortgage, taxes, insurance, HOA dues and the building’s
financial risk?”
II. WHY ARE THE FEES RISING?
There is not one reason.
California has a large number of aging condo projects.
Buildings need roofs.
Balconies need inspections and repairs.
Elevators need maintenance.
Plumbing wears out.
Insurance has become more expensive.
And some HOAs spent years keeping dues artificially low because nobody wanted to be
the board that raised fees.
That feels great until the reserves are not there when something major breaks.
Then the owners get a letter.
The Los Angeles Times reported that experts are increasingly seeing emergency
assessments above $20,000 per unit, including a reported $49,000 assessment at
another Southern California condo community. Los Angeles Times
That is why a low HOA payment is not automatically a good thing.
Sometimes it means the association is exceptionally well run.
Sometimes it means somebody has been kicking the maintenance bill down the road.
III. THE HOA BUDGET CAN MATTER AS MUCH AS
YOUR CREDIT SCORE
This is where buyers and agents get surprised.
A borrower can have:
Excellent credit.
Strong income.
Plenty of assets.
A large down payment.
And still have trouble financing the condo.
Why?
Because lenders are also looking at the project.
Depending on the loan and project, issues can include:
Insufficient reserves.
Major deferred maintenance.
Pending special assessments.
Litigation.
Insurance problems.
Structural or safety concerns.
Too much commercial space.
Delinquent HOA dues.
And other project-level risks.
This is why I like getting condo documents reviewed as early as possible.
The loan officer saying:
“Your buyer is approved.”
Does not necessarily mean:
“This condo project is approved.”
Those are two separate things.
IV. A CHEAPER CONDO CAN ACTUALLY BE MORE
EXPENSIVE
Here is the trap.
A buyer compares two properties.
Condo A is $650,000 with a $450 HOA payment.
Condo B is $625,000 with an $850 HOA payment.
The second condo is $25,000 cheaper.
But the monthly housing cost may still be higher.
And if Condo B also has a weak reserve position or a pending assessment, that “better
deal” can disappear fast.
That is why I would rather compare:
Purchase price.
Mortgage payment.
Property taxes.
Insurance.
HOA dues.
Known assessments.
And the financial health of the association.
That is the real housing cost.
Not just the MLS price.
V. AGENTS SHOULD BE ASKING FOR HOA
DOCUMENTS EARLIER
This is becoming a bigger deal for listing agents too.
If I am listing a condo, I want to know before we get into escrow:
Is there a current special assessment?
Is another one being discussed?
How healthy are the reserves?
Is the master insurance policy current?
Is there litigation?
Are there major repairs planned?
Have balcony or structural inspections identified issues?
Because finding this stuff late can kill a deal that looked completely fine on day one.
And if you are representing the buyer, you want those answers before your client gets
emotionally committed to the property.
The cheapest problem is still the one you discover early.
THE BOTTOM LINE
Condos can still be one of the best ways to buy in expensive California markets.
They can offer a lower purchase price, less exterior maintenance and access to areas
where single-family homes may be out of reach.
But buyers need to understand what they are actually buying.
You are buying the unit.
And you are buying into the association.
The HOA budget matters.
The reserves matter.
The insurance matters.
The maintenance history matters.
The special assessments matter.
And the financing eligibility of the project matters.
So before you make an offer on a condo, do not just ask:
“Can I qualify for this payment?”
Ask:
“Can this building qualify too?”
That question can save you a lot more than $26,000.
About Michael Belfor
Michael Belfor is a Branch Manager and Loan Originator with approximately 24 years of
mortgage experience.
He has been recognized in American Pacific Mortgage’s President’s Club and among the company’s Top 1% producers since 2017.
Michael works with homebuyers, homeowners, real estate investors and real estate professionals on conventional, jumbo, FHA, VA, down-payment assistance, self-employed and Non-QM financing, DSCR/investment loans, TICs, condos, renovation financing, HELOCs, home-equity loans, construction financing and other complex mortgage scenarios.
California condo owners are facing rising HOA dues and large special assessments. Learn what buyers should check before making an offer and why the condo project itself can affect financing.
California condo financing, HOA special assessment, California HOA fees, condo mortgage California, non-warrantable condo, condo reserves, HOA insurance
Comments