Condo owners facing historic price declines discover that renting out their units is an equally devastating trap

If you’re a condo owner contemplating whether to sell or rent out your unit, we have sobering news: 2026 may be the worst year in over a decade to own a condominium, and renting it out won’t save you.

According to recent Wall Street Journal reporting, U.S. condominium prices experienced their largest annual decline since 2012, falling 1.9% from a year earlier in September and October. More alarming still, over 10% of condos nationwide are now worth less than their most recent sale price. In some markets like Austin, San Antonio, Cape Coral, San Francisco, and Portland, that figure exceeds 25%.

For desperate owners, the natural instinct is to wait it out and rent the property. But this strategy leads straight into what can only be described as a perfect storm.

The Numbers That Don’t Work

The fundamental problem facing condo owners is simple mathematics. Rising homeowner association fees, driven by surging insurance premiums and maintenance costs, are making these properties financial albatrosses. Monthly HOA dues that once ranged from a few hundred dollars now frequently exceed $1,000 per month in many buildings.

When you factor in mortgage payments, property taxes, HOA fees, and maintenance reserves, the break-even rental rate becomes impossibly high. Meanwhile, rental rates in most condo-heavy markets have softened or remained flat, creating a brutal mismatch between what owners need to charge and what the market will bear.

For owners who bought at peak prices in 2021-2022, the situation is particularly dire. They’re facing negative equity while trying to generate positive cash flow in a rental market that has turned decisively against them.

The Competition You Can’t Beat

Perhaps the most devastating reality for individual condo owners is the nature of their competition. Professional institutional operators like Greystar have spent decades perfecting the rental apartment business. They operate at scale, constantly upgrading their buildings and units, employing sophisticated marketing, and maintaining 24/7 management infrastructure.

As an individual owner trying to rent out a single condo, you’re not just competing with these professionals today. You’re falling further behind every single day. While institutional operators implement new amenities, renovate common areas, upgrade building technology, and optimize their operations, your condo building is aging, and your unit is depreciating.

The gap between professional rental operations and individual condo rentals is widening, not narrowing. Every month you hold onto the property hoping for a market recovery, you’re competing against operators who are getting better while you’re standing still.

The Demographic and Political Headwinds

Beyond the pure financial challenges, many condo-heavy markets are experiencing significant demographic and political shifts that are fundamentally changing renter preferences. Urban downtowns, once the crown jewels of condo development, have lost much of their appeal in the work-from-home era.

Meanwhile, renters who have been living in apartments for the past six years are increasingly seeking houses or townhomes when they find value. The psychological shift toward space, privacy, and control over one’s living environment has accelerated dramatically. Condos represent the opposite of what today’s rental market values.

Political uncertainty and policy changes in many urban markets have also created additional risks for landlords, making the already-challenging condo rental proposition even less attractive.

The Florida Situation: A Warning Sign

Florida’s condo market deserves special attention as a cautionary tale. Following the tragic Surfside collapse in 2021, lenders have dramatically tightened their scrutiny of condo buildings. New state requirements for structural soundness have created both direct costs and financing challenges.

Higher insurance costs and hurricane risks have further spooked both buyers and renters. The result is a market where owners are trapped with properties that are simultaneously difficult to sell and difficult to rent profitably.

What’s happening in Florida today may be a preview of what’s coming to other markets as aging condo buildings across the country face mounting maintenance and insurance challenges.

For Real Estate Professionals: The Hard Conversation

If you’re representing condo owners, it’s time to have the difficult but necessary conversation. The rental escape hatch that seems so attractive is actually a trap that will only get worse. Here’s what you need to tell your clients:

First, acknowledge their pain. Many owners are facing losses on properties they purchased just a few years ago. That’s a real and difficult situation.

Second, be honest about the rental math. Show them the real numbers, including vacancy rates, management costs, maintenance reserves, and the inevitable special assessments that many aging buildings will face.

Third, explain the competitive landscape. Help them understand that they’re not just competing with other individual landlords, but with some of the most sophisticated real estate operators in the world.

Most importantly, make the case for selling now, even at a loss.

The condo market is not experiencing a temporary dip. The fundamental forces driving prices down changing work patterns, demographic preferences, rising operating costs, stricter lending standards, and competition from purpose-built rentals are structural, not cyclical.

Every month an owner waits, hoping for conditions to improve, they’re paying HOA fees, insurance, property taxes, and potentially mortgage interest on a depreciating asset. They’re also missing opportunities to deploy that capital elsewhere in a more favorable market.

The Path Forward

The reality is that 2026 is shaping up to be a brutal year for condo owners. The confluence of falling prices, rising operating costs, intense rental competition, and shifting market preferences has created a genuine crisis.

For owners still hoping to rent their way through this downturn, the hard truth is that you’ll be competing against the best operators on the planet who are constantly improving their product while you fall further behind. The math doesn’t work. The competition is overwhelming. The market has moved against you.

The difficult but correct advice for most condo owners is to sell now, accept the loss, and move on. Waiting will only make the situation worse.

For agents: your job is to deliver this hard truth with empathy but clarity. Your clients need honest advice, not false hope. The rental strategy that seems like a lifeline is actually an anchor. Help them cut it loose before it drags them under.

Market data and condo price information sourced from: Nicole Friedman, “The Condo Market Hasn’t Been This Bad in Over a Decade,” The Wall Street Journal, January 1, 2026.