Condo Prices Are Dipping in Los Angeles - Here’s Why Assessing the HOA Matters More Than Ever

Condo prices across the U.S. recently posted their biggest decline in over a decade. The data is in and it shows that condo prices are down roughly 2% year over year. In addition to this, condo sales volume has cooled compared to previous peak years.One of the major reasons? Rising HOA costs, aging buildings, insurance increases, and deferred maintenance. If you’re buying a condo or townhome in Los Angeles (or anywhere in California), you’re not just buying a unit — you’re buying into a financial ecosystem called an HOA. Because of this, it’s important to know how to properly assess and evaluate the value of the HOA tied to the community property you’re planning to purchase before-hand.

HOAs have pros and cons:

Pros

• Exterior maintenance handled for you

• Amenities maintained

• Shared costs for large repairs

• Community standards that can protect property values

Cons

• Monthly dues that can increase

• Shared financial risk

• Potential special assessments

• Board management quality varies

That’s why asking the right questions matters. Below are five essential questions every buyer should ask — and what each one actually reveals.

1. How Strong Are the Reserves?

Reserves are the HOA’s savings account for major future repairs such as:

• Roof replacement

• Plumbing repiping

• Elevator upgrades

• Exterior paint

• Parking structure repairs

What This Reveals:

• Whether the HOA is financially prepared

• If large surprise costs are likely

• How responsibly the board plans long-term

Low reserves often mean owners may face extra charges later.

2. Is the Reserve Study Current?

A reserve study is a professional report that estimates repair and replacement costs over the next 20 to 30 years.

In California, HOAs are required to update this regularly.

What This Reveals:

• Whether the HOA is proactively planning

• If projected expenses are realistic

• Whether future dues increases may be coming

An outdated reserve study suggests the board may not be financially organized.

3. Have There Been Any Special Assessments?

A special assessment is a one-time extra charge to homeowners when the HOA doesn’t have enough money saved to cover a major repair.

This can range from:

• A few thousand dollars per unit

• To tens of thousands for structural work or large system replacements

What This Reveals:

• Whether the HOA has a history of underfunding

• If major repairs were unexpected

• Whether future assessments could happen again

A pattern of frequent assessments is a red flag.

4. What Is the Delinquency Rate?

The delinquency rate is the percentage of owners who are behind on their HOA dues.

What This Reveals:

• The financial health of the community

• Whether cash flow is stable

• If lenders may hesitate to finance the building

If too many owners are not paying, the burden often shifts to responsible owners.

5. Are Any Major Repairs Planned Soon?

Ask directly about:

• Roofing projects

• Plumbing replacements

• Balcony or structural upgrades

• Elevator modernization

• Foundation or parking structure work

What This Reveals:

• Whether your monthly costs could increase

• If a special assessment may be coming

• How transparent the board is about future expenses

Even if you just moved in, you share responsibility for these costs.

Why This Matters Right Now

With condo sales slowing and prices dipping nationally, buyers have more negotiating power — but that also means due diligence is critical. If you’re currently in the market for a Condo or Townhome in Los Angeles and would like help with your search, I’m here to help. My team has over 15 years of trusted experience in the Real Estate space - all of which includes the necessary skills to provide you with a educational, professional, and results-oriented experience.

Learn more about my services here.

Keara Peeples, with eXp Realty #02243103