by Jennifer Jordan
For decades, buying a condominium was often viewed as one of the simplest ways to enter the housing market.
Buyers compared floor plans, admired the views, looked at the monthly HOA dues and moved on.
Those days are over.
The collapse of Champlain Towers South in Surfside, Florida, fundamentally changed the way lenders, engineers, insurers and buyers view condominium ownership. Since that tragedy claimed 98 lives in 2021, thousands of condominium buildings across the country have undergone new structural inspections, reserve studies and engineering reviews. In Florida alone, hundreds of buildings have faced major special assessments, soaring HOA dues or difficult questions about their long-term structural integrity.
Now, those concerns are reaching every state—including South Carolina.
This month, new rules from the Federal Housing Finance Agency require Fannie Mae and Freddie Mac lenders to conduct far more extensive reviews before approving condominium mortgages. Lenders must now examine not only a building’s insurance coverage, but also its reserve funding, budgets, litigation history and overall financial health. Condo associations are also being required to maintain stronger reserve funding for future repairs.
The goal is simple.
Protect buyers from purchasing into buildings that have ignored maintenance for years.
Dockside Is Charleston’s Wake-Up Call
Charleston doesn’t have hundreds of aging high-rise condominiums like South Florida.
But it now has something just as important.
A cautionary tale.
Dockside, one of Charleston’s most recognizable waterfront condominium communities, is preparing for redevelopment after structural deficiencies ultimately proved too extensive to repair economically. More than 100 owners lost not only their homes, but years of equity, certainty and financial security while bankruptcy proceedings and insurance litigation continue.
Dockside is an extraordinary situation.
But it reminds buyers that purchasing a condominium isn’t just buying four walls.
You’re buying into the financial health, engineering decisions and governance of an entire homeowners association.
Is This the Beginning of the End?
Some industry observers have asked whether America is entering the beginning of the end for condominium ownership.
The better question may be this:
Is it the end of buying condos without asking difficult questions?
Probably.
And that’s a good thing.
Well-managed condominium communities have nothing to fear from greater transparency. In fact, stronger reserve funding, better engineering oversight and more thorough financial reviews should make quality buildings even more desirable over time.
Buildings that have postponed maintenance, underfunded reserves or failed to plan for major repairs, however, may find financing becomes more difficult and buyers become far more cautious.
Opportunity Has Never Been Greater
Ironically, periods of uncertainty often create tremendous opportunity.
As buyers become more selective, well-managed condominium communities with strong financial reserves, proactive boards and documented maintenance programs may stand out from the competition more than ever before.
Some outstanding Charleston condominium communities have exceptionally well-run homeowners associations that have invested for decades in maintaining their buildings. Others have deferred difficult decisions or kept dues artificially low at the expense of long-term financial health.
Knowing the difference has never been more important.
Research Has Become the Most Valuable Amenity
Bryan Crabtree, a luxury real estate broker with IndigoOak | Christie’s International Real Estate, and one of the areas top experts on condo sales, says buyers should spend as much time evaluating the homeowners association as they do evaluating the condominium itself.
“Buying a condo today involves far more than comparing kitchens, views or amenities,” Crabtree said. “You’re investing in the financial strength of an HOA, the quality of its leadership and its commitment to maintaining one of your largest investments. Some Charleston condominium communities are exceptionally well managed with healthy reserves and proactive boards. Others carry far more risk. The difference isn’t always obvious until someone knows where to look.”
Crabtree, who has represented buyers and sellers throughout the Charleston area for nearly three decades, says today’s due diligence extends well beyond the property inspection.
“I tell every client that condos require a different level of research than almost any other property type. Budgets, reserve studies, engineering reports, insurance coverage, pending litigation, owner occupancy and even board meeting minutes can tell you as much about the investment as the unit itself. My job is to uncover those answers before my clients make one of the biggest financial decisions of their lives.”
The Condo Market Isn’t Ending—It’s Growing Up
Condominiums remain one of the best ways to enjoy low-maintenance living, waterfront locations and walkable lifestyles that would otherwise be unaffordable for many buyers.
But the era of buying a condo based solely on location may be ending.
The future belongs to buildings that embrace transparency, maintain adequate reserves and invest consistently in long-term maintenance.
For buyers, that’s actually good news.
It means the safest condominium communities will become easier to identify.
And with experienced guidance, today’s uncertainty may create some of the best buying opportunities Charleston’s condo market has seen in years.
The question isn’t whether condos are becoming too risky.
The question is whether buyers are asking the right questions before they buy.
Leave a Reply