My HOA Went Up — Can I Still Sell My Condo? What Buyers Are Doing in Escrow (Southern California, 2026)

My HOA went up — can I still sell my condo? It’s the question I’m hearing most from condo and townhome owners in Yorba Linda, Diamond Bar, Chino Hills and Brea this fall. The short answer is yes. Condos are still selling across Southern California. But how yours sells now depends on a document most owners have never opened, and in the last two weeks I watched two of my own buyers walk away from two different condos after reading it.

I’m not writing this to alarm anyone. I’m writing it because three things changed this year that affect how a buyer looks at your unit, and most owners haven’t had a reason to look at them yet. Here’s what happened in those two escrows, what’s changing between now and January 2027, and how to think it through as an owner.

Why did two buyers walk away from two condos in two weeks?

Different families, different communities, same document. Both liked the unit. Both opened escrow. Both made the same decision after reading the HOA packet.

A step most owners never see: a few days into escrow, the buyer receives a packet from the HOA — the budget, the financials, the meeting minutes, the insurance summary. Buried in there is the reserve study. In one sentence: the reserve study is the community’s plan for its big-ticket repairs (roofs, paving, plumbing, exterior paint), it states how much should be set aside right now to cover them, and then it shows how much actually is.

Case one: two sisters buying a condo for their mother

Two sisters were buying a condo for their mother, to move her closer to them. Not an investment — a home for mom, near her daughters, without surprises. We found one: good community, walking distance to restaurants and a market, and we negotiated a price below the appraised value. Price right, place right. We opened escrow.

Then the packet came. The amount set aside in reserves was well below what the study said it should be. I didn’t tell them what to do; I explained what the document meant. Here’s what the study recommends, here’s what’s there, and here’s how the difference usually gets paid: higher dues over time, a one-time special assessment to owners, or both.

They could see where it was headed. An under-reserved community has to catch up eventually — not because of any new rule, just because the money has to come from somewhere. They didn’t want their mother’s monthly cost to be a moving target, and they didn’t want to be the ones covering the gap. They decided it wasn’t the right one.

Worth sitting with: we were under appraisal, mom could walk to dinner, and it still wasn’t enough — because of one document. Nothing about that community changed recently. What’s different is that buyers are reading the reserve study now, carefully, and drawing that conclusion themselves.

Case two: an elderly couple buying near the grandkids in Yorba Linda

A week later, an elderly couple who already have their home wanted a second place near their kid and grandkids — close enough to stay overnight whenever they liked. We found a unit around $550,000 in a hillside community in Yorba Linda. Beautiful, well-kept, the kind of place you’d bring family to. It’s also an area the state maps as a higher fire risk, and that’s where the story starts.

About three years ago, the community’s master insurance policy — the coverage the HOA carries on the buildings — came up for renewal and the premium jumped. The association couldn’t carry it, and for a period the community was uninsured. A lender won’t make a loan on a condo in an uninsured building, so the only buyers were cash. Units that had sold in the mid-$500,000s dropped to around $485,000.

The way out was the California FAIR Plan, the state’s insurer of last resort. Once the association had coverage, the community was insurable and financeable again, and values came all the way back to about $550,000. But getting there cost money: a special assessment to owners and a large dues increase to carry the new premium. And a number of owners either couldn’t come up with the assessment or won’t pay it — so three years later the community is still under-reserved, not because the board didn’t act, but because the money didn’t all come in.

On top of that history, the budget showed dues going from $600 to $725 a month. My buyers asked the reasonable question: does this keep going? For a second home in retirement, a monthly number that has moved this much and is still moving was more than they wanted to take on. They’re still looking. They just want to know what it costs.

How does an HOA dues increase change what a buyer can pay?

A buyer’s lender doesn’t look at dues separately; it looks at total monthly housing payment. At today’s rates, $125 a month in dues is roughly the same monthly cost as borrowing about $20,000 more. So from a buyer’s point of view, a unit whose dues rose $125 now costs about $20,000 more than it did before — even though the list price never changed. That’s not a judgment on the community. It’s how the math works.

And the bigger lesson from that Yorba Linda community: it went from $550,000 to $485,000 and back to $550,000, and the units never changed. What changed was whether a lender would make a loan there. Insurance and reserves decide whether a unit is financeable, and that decides what it’s worth.

What is changing for condo owners between now and January 2027?

Three things. None are secrets, but they’re not widely known yet.

October 15, 2026 — California FAIR Plan rates increase

The state approved an average increase of roughly 29% on FAIR Plan policies, effective for policies written or renewed on or after October 15, 2026 — with a wide range by ZIP code. If a community’s master policy is on the FAIR Plan, that shows up at the next renewal and then in the following year’s budget. October 15 is an effective date, not a deadline; a policy renewing in February sees it in February.

A related fact: under California’s Davis-Stirling Act, an HOA board can raise regular dues up to 20% a year without a member vote. A 2026 bill to lower that cap to 8% (SB 1007) did not advance. Boards have room to pass along higher costs, and many will need to.

January 4, 2027 — the condo lending change

For loan applications dated on or after January 4, 2027, Fannie Mae and Freddie Mac require a condo association to put at least 15% of what it collects in dues into reserves — up from 10% today. The alternative is to fund at the level the community’s own reserve study recommends, provided that study is less than three years old — and that number is often higher, not lower. (Separately, the “limited review” shortcut for established condo projects ended on August 3, 2026, so lenders are already pulling budgets, reserve studies and insurance certificates on most condo loans.)

This applies to every condo and attached-townhome community with an HOA, in or out of a fire zone. Communities that meet the standard will be fine. Communities that don’t may find some buyers can’t get conventional financing there and need a different, more expensive kind of loan.

Already in effect — the balcony inspection disclosure

California’s SB 326 required condo associations (three or more units) to have balconies, decks and elevated walkways inspected by a structural engineer or architect by January 1, 2025. As of January 1, 2026, SB 410 added that inspection report to the HOA disclosure packet a seller must provide under Civil Code section 4525. If the report is clean, that’s a plus. If it found work to do, that becomes part of the reserves conversation. If the inspection was never done, buyers will notice.

What has this meant for condo prices so far?

Using the latest regional Southern California data: over the last four years, condo prices are up about 2%. In the four years before that, they rose about 47%. Single-family homes over the same recent stretch are up about 15%. Earlier this year condo prices posted their largest year-over-year decline in about 14 years, and the 12-month condo sales pace was the slowest in more than two decades.

So the gap between what a house sells for and what a condo sells for has been widening — not collapsing, widening — and it’s fair to say the changes above haven’t fully shown up in the numbers yet. That’s the honest picture. It isn’t a reason to panic. It is a reason to know where your community stands.

How should a condo owner think about this?

It depends on two things: your community, and your plans.

Start with your community. Ask two questions at the next board meeting or of your management company: When was our reserve study last updated? and Are we funding it at the level it recommends? If the answers are “recently” and “yes,” you’re in a well-run community — exactly the kind of place buyers like the two families above are looking for. You have time.

If the answers are unclear, it’s better to know now than in escrow, because a community can fix it. Boards adjust when owners show up and ask. Getting reserves to where the study says they should be is what keeps a community easy to finance.

Then look at your plans.

• Staying put: this is mostly about staying informed and being part of the conversation at your HOA.
• Already thinking about moving up to a house: this is a year worth running the numbers. Your condo’s value is tied to how buyers read your HOA packet, and buyers will have more to read after January. Houses in Diamond Bar, Walnut, Chino Hills and Brea have held value more steadily. If you’re 55 or older, Prop 19 may let you carry your property tax base to the new home, which changes the math considerably. Not every condo owner should sell — plenty shouldn’t — but if the move-up was already on your list, see what the trade looks like in real numbers.
• Renting it out instead: workable if the rent covers the mortgage, the taxes and the dues — and the dues are the number that’s moving. Run it honestly.

The one thing I’d suggest against is not looking. Whatever you decide, decide it with the packet in front of you.

What can I do for you as a condo owner?

If you own a condo or townhome in Brea, Yorba Linda, Chino Hills, Diamond Bar, Walnut, Rowland Heights or La Habra, send me your community name and I’ll do two things:

1. Tell you what a buyer is going to see in your HOA packet today — reserves, insurance, whether the balcony inspection was done — and whether it’s the kind of thing that made my two buyers cancel.
2. If you’re curious about the move-up, run your net proceeds on the condo against what a house costs right now. No pressure either way. Just the numbers.

Frequently asked questions

Buyer examples are from real transactions with identifying details removed. Market figures reflect the latest regional Southern California data and general trends; they are not a guarantee for any specific property or community. Insurance and lending rules are summarized for general information and can change — verify with your HOA, insurer and lender. Jack Ma is a licensed real estate broker, not an attorney, CPA, insurance agent or lender; this is not legal, tax, insurance or financial advice.