Some Condo Fees as High as Mortgage Payments

By Sally Deneen

Most condo owners pay at least $300 monthly for condo dues on top of the monthly mortgage payment, according to a national report, and a review of Philadelphia condos on the market suggests $300 would be a bargain for some residents.

A look at condos for sale locally in April found monthly fees hovering just above $300 and pushing closer to $400, while some bigger tabs exceeding $740 resemble mortgage payments, thanks to their luxury addresses.

At The Residences at The Ritz-Carlton in Center City – an extreme example – the whopping $1,259 monthly homeowners association fee includes such amenities as chauffeur-driven short trips in a Mercedes sedan, a fitness center with a lap pool and a 12-foot waterfall in the private landscaped park.

The steady rise in fee-paying homeowners "has important implications for the affordability of homes nationwide, particularly condos, which are an increasingly popular option for first-time homebuyers," said Zillow senior economist Aaron Terrazas in a recent report, adding that four out of 10 first-time homebuyers live in condos, up from about three out of 10 back in 2001.

It's important to look at such fees when condo shopping.

"What may initially seem like an afterthought can make a substantial difference in affordability," Terrazas said.

Such dues are money out of your pocket that you'll never see again, notes real estate agent Brendon DeSimone, who spells out tips on how to lower fees. He recommends joining the Homeowners Association Board to review finances to find ways to lower its costs.

"They can have a huge impact on your decision to buy, or not buy, a particular condo," Desimone said. "For example, you might have fallen in love with a condo in a big complex but decided you just can't afford the HOA dues. Also, high HOA dues can be a deterrent to future buyers, too, when you go to sell later."

Meanwhile, single-family homeowners tend to pay much lower fees – a median of $40 to $49 monthly nationally – if they pay any at all, though 7 percent of them do pay at least $300 monthly in homeowner association dues, the report found.

Why do multi-family residences have higher fees?

"In part, because they tend to cover more services," Terrazas said.