Should I Sell My Condo Now or Wait? The Condo Market Heading Into 2027 (Diamond Bar, Chino Hills & Walnut)

A few weeks ago, I wrote a letter to homeowners about selling under financial pressure. I talked about the first weakness I’m watching in our market: more people selling because they have to, not because they want to.

Today I want to talk about the second weakness I’m watching. It’s quieter, and it’s showing up mostly in one corner of the market: condos and townhomes.

If you own a condo or townhome in Diamond Bar, Chino Hills, Walnut, Chino, Brea or Yorba Linda, you may already be wondering, “Should I sell my condo now, or wait?” I hear that question a lot lately. So let’s walk through what’s actually happening, and then you can decide what makes sense for you.

Is the condo market slowing down?

Short answer: yes, in one important way. Fewer buyers are going into contract on condos and townhomes.

Here’s what the local MLS data shows for our tri-county area around Chino Hills, Diamond Bar and Brea, where Los Angeles, Orange and San Bernardino counties meet (September 2026, as reported October 15):

• 20 condos and townhomes went pending in September 2026.
• A year earlier, that number was 51.
• That’s a 60.8% drop. Single-family homes slowed too, but not nearly as much: 129 vs. 176 (−26.7%).

Now, I want to be fair about this number. Pending counts often go up a little after the fact, because some agents enter their updates late. And one month is just one month. In fact, condo pendings were actually up from the year before in May, June, July and August.

That’s why I always look at the bigger picture too. Over the last 12 months, condo pendings averaged 42 a month, down 8.7%. Single-family pendings were down only 2.5%. So the slowdown is real, and it’s hitting condos harder.

Why are condos not selling as fast as houses?

The easiest way to see it is to put condos and houses side by side:

A few things jump out at me:

• More condos are sitting on the market. Condo inventory ran 19.4% higher over the past year, and months’ supply averaged 6.6, up 35.2%.
• Houses are going the other way. Single-family homes have just 4.2 months of supply. Condos have 7.2.
• Condos are taking longer to sell. So far this year, it’s taking about 48 days for a condo to go into contract, up 14.3%.

Put simply: fewer condo buyers, more condos to choose from. If you’re selling a condo right now, you have more competition than your neighbor selling a house down the street.

Will condo prices go down in 2027?

I’ll be honest with you: I don’t know, and I’d be careful with anyone who says they do. What I can show you is what the numbers say so far.

Yes, the September condo median was $603,250, down 7.2% from last year. But with so few sales in a month, that number bounces around a lot. Look at the full 12 months and the median was $620,000, down just 0.8%. And the condos that sold in September got 99.4% of their list price, on average.

So no, this isn’t a crash. It’s showing up as fewer buyers and more competition, not big price drops. Condos that are priced right are still selling close to asking. The ones that sit are usually priced like it’s still 2022.

Why are buyers so cautious about condos right now?

Part of it is rates. Freddie Mac’s 30-year fixed average was 7.32% as of October 22, 2026, up from 6.19% a year ago. That alone makes buyers think twice.

And buyers aren’t feeling great in general. The University of Michigan’s consumer sentiment index finished October 2026 at 48.0, after a preliminary reading of 46.3 that was among the lowest in the survey’s history. Survey director Joanne Hsu said sentiment is about 10% below a year ago, as frustration over the cost of living builds. When people feel that uneasy, a big purchase like a home often gets put on hold.

But condo buyers have something extra to think about that house buyers don’t: the HOA. Here’s what I mean.

1. Why HOA dues keep going up

Right now, three things are pushing HOA dues higher at the same time.

Deferred maintenance is catching up. Many complexes put off big repairs for years, and now roofs and balconies are coming due at once. California law (SB 326) required most condo HOAs with wood-supported balconies, decks and walkways to finish safety inspections by January 1, 2025, and any repairs found have to be made. Insurers are also looking harder at building condition, and many now ask for proof of a completed balcony inspection before they’ll issue or renew a policy. Those big repair bills come straight out of reserves.

Insurance costs are climbing. In a 2025 survey by the Foundation for Community Association Research, 91% of community associations said their premiums went up, and 17% saw them more than double. When the HOA’s insurance bill goes up, owners pay for it through higher dues.

Reserve requirements are going up. Starting in January 2027, Fannie Mae will require HOAs to set aside more for reserves (more on that below). Rebuilding reserves that were just drained by roof and balcony work usually means higher dues, a special assessment, or both.

For a buyer, every one of these shows up as a higher monthly payment on the exact same price. I dug into this more in My HOA Went Up. Can I Still Sell My Condo?

2. More owners are falling behind on HOA dues

These are national numbers, not local ones, but they show where things are heading:

• 284,933 HOA liens were recorded nationwide in 2025, about one every 90 seconds. That’s up 8.6% from 2024 (Benutech data, reported by HousingWire, April 2026).
• HOA-related foreclosures were up nearly 40% compared with two years earlier (ATTOM data, reported by The Wall Street Journal, August 2026).
• 74% of associations in Association Reserves’ reserve-study data were less than 70% funded (November 2025). That’s from the firm’s own client studies, not a random national sample, but it’s a big data set.

3. Why your neighbor’s unpaid dues can become your problem

This is the part I really want condo owners to understand. It works like a chain reaction:

1. Some owners stop paying their dues.
2. The HOA has less money coming in, so its savings (reserves) fall behind.
3. To make up the gap, the board raises dues or approves a special assessment.
4. If enough owners fall behind, or reserves get too low, the complex can become harder to finance. You may hear this called “non-warrantable.”

For conventional loans, Fannie Mae generally wants no more than 15% of units to be 60 or more days behind on dues. Above that, the project doesn’t meet Fannie Mae’s eligibility requirements. And when a buyer can’t get a regular loan, most of them just move on to the next listing.

4. A new reserve rule starts in January 2027

Fannie Mae is raising the bar. Under Lender Letter LL-2026-03, HOAs will need to set aside at least 15% of their annual budget for reserves, up from 10%. It applies to loan applications dated on or after January 4, 2027, and Freddie Mac made a matching change. HOAs that come up short may have to raise dues or rework their budgets. I break it all down in Fannie Mae’s 2027 Condo Reserve Rule.

5. Lawsuits involving the HOA

This one surprises a lot of people. If your HOA is part of a pending lawsuit, Fannie Mae generally treats the project as ineligible, with limited exceptions for minor matters a lender can document. That can include lawsuits owners file against their own HOA. If your complex is in litigation, the buyer’s lender will likely find out, and it can change who’s able to buy your home.

Can low HOA reserves make it more expensive to sell my condo?

Yes, and this is the part most condo owners don’t see coming.

Think about where an HOA’s money actually comes from. Mostly two places: your monthly dues and special assessments. There are also some fees when a home sells, like the charge for the HOA document package California requires sellers to provide and the cost to update the HOA’s records. But California law generally limits those sale-related charges to the HOA’s actual costs, so they’re not a real way to rebuild reserves.

So when reserves run short, the money has to come from owners. And if you’re selling, that can show up in your bottom line in a few ways:

• Special assessments. Anything you owe the HOA at closing is typically paid out of your proceeds. And if a special assessment has been approved but isn’t due yet, buyers will see it in the HOA documents, and many will ask you to cover it with a credit.
• Higher dues, lower offers. Buyers think in monthly payments. Every dollar of dues is a dollar they can’t put toward the price.
• Fewer buyers who can get a loan. If low reserves or high delinquencies make the complex harder to finance, your buyer pool shrinks. That often means more time on the market.
• More months of carrying costs. Every extra month on the market is another month of mortgage, dues, property taxes and insurance coming out of your pocket.

Here’s a real example that made the news this fall. At the Villa Moura condo complex in San Clemente, owners of the 198 units were hit with an emergency special assessment of more than $26,000 each for roof replacements, according to ABC7. The board offered a lump sum, two payments, or more than $2,000 a month for six months. Owners have pushed back, arguing it’s deferred maintenance rather than an emergency, and the dispute is ongoing.

Imagine trying to sell in the middle of that. Buyers would see the assessment in the HOA documents, and most would either walk away or ask you to cover it.

San Clemente is in south Orange County, but the same pressures (aging roofs, balcony repairs and rising insurance) can apply to complexes in Chino Hills, Diamond Bar, Brea and the surrounding area. That’s why the reserve study matters so much.

That’s why I always suggest getting the HOA’s reserve study and budget before you list. If there’s an assessment coming, it’s much better to plan for it in your pricing than to get surprised in escrow.

Quick note: I’m not a lender or an attorney. A lender needs to confirm whether a specific complex meets loan guidelines, and legal questions about your HOA or its fees should go to a qualified attorney.

How do these two weaknesses connect?

Remember the first weakness from my letter? A new group of sellers feeling financial pressure:

• Long-time owners who are house-rich but cash-poor as taxes, insurance and everyday costs climb.
• People who bought between 2022 and 2024 and were counting on a refinance that hasn’t happened.
• Small business owners whose business and home finances are tied together.

A lot of these owners live in condos and townhomes, because that’s often been the more affordable way into our area. So here’s how the two connect: more condo owners who may need to sell, plus fewer condo buyers, equals more competition for every condo seller.

That doesn’t mean you need to rush. It just means having a plan matters more now than it did a year ago.

Is it a good time to sell a condo?

It can be, if you go in prepared. If you were my client, here’s what I’d walk you through before we ever put a sign out front.

Step 1: Get your HOA paperwork first

Ask your HOA for:

• The delinquency rate (how many owners are behind on dues)
• The latest reserve study and current budget
• The HOA’s insurance details, plus any recent premium increases
• Any pending lawsuits or planned special assessments

Here’s why: the buyer’s lender is going to ask for most of this anyway. You’d much rather find a problem before you list than three weeks into escrow.

Step 2: Price against the competition, not last year’s sales

With 7.2 months of condo supply, buyers have options, and they’ll compare your home to every other condo in your price range across Chino Hills, Diamond Bar, Brea and nearby communities, HOA dues included. Pricing is part of your marketing. The right price builds momentum. An optimistic one usually just builds days on market.

Step 3: Make your condo the easy choice

When buyers have more choices, the little things matter more: condition, great photos, and HOA documents that are organized and ready to go. When a buyer feels confident about your home and your HOA, they’re much more likely to move forward.

Step 4: Think about timing, especially the holidays

Here’s something a lot of sellers don’t realize. Last year, only 69 new condos and townhomes hit the market in November and just 50 in December. Compare that with 96 to 131 a month from March through July this year.

Fewer listings over the holidays can mean less competition for a well-prepared condo. And with condo supply already elevated, spring 2027 could get crowded. That’s a pattern, not a promise, but it’s worth thinking about.

What if I’m not ready to sell?

That’s completely fine. If your finances are steady, your HOA is healthy and your plans haven’t changed, staying put may be the right move. The goal isn’t to sell. It’s to make your decision with clear information.

If you’re just curious what you’d walk away with, a net proceeds analysis is an easy, no-pressure first step.

Frequently asked questions

Disclaimer: This article is for general informational purposes only and is not legal, tax, lending or financial advice. Local market data is from the Tri-Counties Association of REALTORS®; CRMLS data via ShowingTime Plus, September 2026, current as of October 15, 2026, and may be revised. HOA lien, foreclosure and reserve figures are national. Lending guideline summaries are general; a lender must confirm eligibility for any specific condo project. Market conditions change and no price or outcome is guaranteed.