Knox-Henderson & Uptown Condo Market Update

I told a buyer yesterday to skip the condo she loved on Knox Street. Not because of the unit. Because of the HOA reserve study.

Here's what's actually happening in the Knox-Henderson and Uptown condo market right now. Older buildings are sitting on the market close to 90 days, well past what we saw a year ago. Entry points on those older units start around $250,000, which sounds like a deal until you look at the HOA.

Older condo buildings in both neighborhoods are getting hit hard with special assessments right now. Roofs, structural repairs, deferred maintenance that boards put off for a decade are catching up all at once. A special assessment can run a buyer tens of thousands of dollars on top of the purchase price, and it brings down the resale value of the unit considerably.

Before anyone writes an offer on an older condo in this price range, I'm pulling the HOA financials and the reserve study first. Warrantability matters just as much. If a building isn't warrantable, meaning it doesn't meet the standards conventional lenders require, buyers get pushed into cash or higher-rate financing, and that shrinks the buyer pool and the resale value right along with it.

This isn't true of every older building. Some HOAs have funded their reserves properly for years and don't have a structural or roof issue anywhere on the property. Those buildings are still good buys at $250,000. The ones that haven't are the ones costing buyers money they didn't plan for, and they're a big part of why older units are sitting for 90 days instead of moving quickly.

Sellers in older buildings should be paying attention too. A well-documented HOA with a funded reserve is a selling point right now, worth putting front and center in the listing. A poorly funded one is worth addressing with the board before the property ever hits the market, not after a buyer's lender flags it during underwriting.

If you're looking at an older condo in Knox-Henderson or Uptown, ask for the reserve study and the last two years of HOA meeting minutes before you fall in love with the unit.

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