Rising Homeowner Association Fees Another Barrier to Ownership

Chicago condo buyers are feeling the squeeze of inflation as rising homeowners’ association fees increase their cost of homeownership.

HOA fees for condominiums rose by 9.3 percent last year, marking the highest increase among the various housing types, Crain’s reported, citing a recent Realtor.com analysis. Furthermore, 83 percent of all condo listings during the 12-month period required fees.

The average monthly fee for condos was $375, significantly higher than single-family homes, where HOA fees averaged just $58 per month.

More than 40 percent of nationwide listings required HOA fees last year, an increase from 39.2 percent in 2023. The median monthly HOA fee is also up, climbing to $125 last year from $110 the year before.

Inflation has affected HOAs in the same way it’s affecting everyone’s personal or business expenses, said Tom Skiba, CEO of the Community Associations Institute.

Areas with older high-rise buildings and lower property values often face higher property fee burdens. In South Commons, property fees constitute 57 percent of total monthly homeownership costs, while Hyde Park and South Shore see 56 percent and 54 percent, respectively.

In contrast, neighborhoods with higher property values and more modern buildings tend to have lower property fee percentages, as costs are distributed among more owners and property values are higher.

Chicago’s luxury condo market is active so far this year. This month, three units at the St. Regis Chicago sold for a combined $17.1 million. The transactions involved units on the 52nd and 60th floors, priced at $6.48 million, $6.3 million, and $4.34 million.

These sales gave a financial boost to the 363 East Wacker Drive tower, which has struggled with challenges exacerbated by interest rates, inflation, stricter lending standards and declining demand.

— Andrew Terrell