The Seattle condo market just handed you something rare: a divergence.
Single-family homes in King County are up 2.3% year-over-year. Median price: $936K. Market is tight, demand is steady, sellers still have leverage.
Condos? Down 11% in the same timeframe. This divergence creates opportunity for first-time buyers, but also warns investors that condo fundamentals have shifted. If you're considering a condo purchase in Seattle in 2026, you're making a decision in a historically favorable buyer's market—but only if you know which buildings and neighborhoods still work.
Here's what's happening, why it matters, and whether a condo is the right move for you in 2026.
Why Are Condo Prices Down 11% When Single-Family Homes Are Up?
Supply is flooding in.
Active condo listings in King County are up roughly 22% year-over-year. More inventory, more choice, less urgency. Buyers can be selective. Sellers have to be realistic about pricing.
New construction is delivering. Seattle's multifamily pipeline has been active for three years. New units are hitting the market faster than demand is absorbing them. Owners of older condos are facing competition from newer product with better finishes, amenities, and warranties.
Investor selloffs are real.
Landlords who bought condos in 2015–2018 as investment property are facing a choice: hold for marginal cash flow and assume more rent-cap risk, or sell while values are still high and redeploy into single-family rentals or other asset classes.
When investors sell in bulk, it creates price pressure. You're seeing this in neighborhoods like South Lake Union and Capitol Hill, where investor-owned units are flooding the secondary market.
HOA fees are climbing.
Condo owners see rising HOA fees. Building reserves are being funded. Roofs are being replaced. Amenities are being upgraded. Nobody likes paying $400/month in HOA fees that don't build equity. Single-family homeowners don't have this problem.
When HOA fees rise and owners see the bill on their next statement, some hit the market. This is invisible to price sheets but very real to seller motivation.
Warrantability concerns.
Some condo buildings are hitting 30+ years old. Warranties from original construction are expiring. Buildings need major work. Lenders get nervous. Buyers get nervous. The buildings that are hardest to finance become the hardest to sell—and prices adjust down.
This isn't a macro Seattle problem. It's a specific building problem. Some condos are gold. Others are liabilities.
What This Means for Different Buyers
First-Time Homebuyers
A 11% decline is an entry point.
If you were priced out of the single-family market (median $936K, plus closing costs, plus inspections, plus 5% down = real capital required), a condo might now be realistic.
Example: $600K condo instead of $750K townhome. Better finishes. Downtown proximity. Lower maintenance. You actually qualify for the mortgage.
But pay attention to three things:
1. HOA Reserve Funding. Ask to see the reserve study. Is the building well-funded for future major work (roof, siding, foundation)? Or is the HOA underfunded and facing a special assessment in 3–5 years? A $250/month HOA that's about to become $450/month because of deferred maintenance is a hidden cost.
2. Building Age and Condition. Condos built in the 1990s and early 2000s are now 25–35 years old. They need work. Condos built in 2015+ are newer product competing on amenities. Don't assume newer is always better, but understand what you're buying. The most common financing issue: older buildings hitting 30+ years struggle with lender approval, not because they're necessarily worse, but because warranties have expired and reserve levels become crucial.
3. Financing. Lenders are selective about which buildings they'll finance. Some condo buildings are "warrantable"—meaning Fannie Mae, Freddie Mac, FHA will finance them. Others are "non-warrantable"—meaning you need a portfolio lender, jumbo loan, or cash. Non-warrantable financing costs more and has shorter terms. This can wipe out your savings on price. Get a pre-approval conversation with your lender about the building, not just your credit score, before you make an offer.
Ask your lender upfront: Is this building warrantable? If not, get a rate quote for non-warrantable financing before you fall in love with the property.
Have a deal you want me to look at?
Investors (Condo Rentals)
An 11% decline plus 22% more inventory equals cap rate compression and tenant headwinds.
Condo cap rates in Seattle proper (Capitol Hill, Ballard, South Lake Union) are already tight—3.5% to 4.5% gross. When supply increases, occupancy drops. When occupancy drops, rents stagnate or decline. Cap rates get worse.
Should you buy a condo to rent out?
Only if:
- You can cash flow at current cap rates (not projecting 8% annual rent growth—use 9.683% per the state rent cap)
- The building is in strong demand (U District, Ballard, Capitol Hill—not South Lake Union, which is overbuilt)
- The HOA is well-funded and not about to spike fees
- You're in it for 7+ years (condo appreciation is slower than single-family; you need time to make up the difference)
If you're chasing cash flow, single-family rentals in Beacon Hill, Everett, or Bothell are better bets. You'll get 5–6% gross cap rates instead of 4%.
If you're chasing appreciation, same answer: buy single-family in neighborhoods with structural demand (light rail, density zoning, job center proximity) instead of betting on condo value recovery.
Investors selling condos are doing it for a reason. Usually because the math got worse, not better.
Downsizers (Selling a Home, Buying a Condo)
This is your moment.
You're selling a single-family home (up 2.3%, strong market). You're buying a condo (down 11%, buyer's market). The delta works for you.
A downsizer who sells a home for $1.2M and buys a condo for $800K just captured $400K of equity. Lower maintenance. Lower property tax. Lower HOA than you'd think (some condos have excellent fee structures).
The gotcha: make sure the condo is the right condo. Don't buy a deal just because it's down in price. Buy it because it solves the life problem you're trying to solve (no yard, no maintenance, walkable neighborhood, strong community).
Price is leverage, not destiny.
Neighborhoods Where Condos Are Still Strong
Not all Seattle neighborhoods have condo supply problems. Some are still solid.
U District. Student housing demand never ends. Rentals perform. New construction is absorbing inventory but so is UW enrollment. Cap rates are compressed, but fundamentals are predictable.
Capitol Hill. Dense, young, walkable. Condos here appreciate steadily. Cap rates are tight, but the neighborhood is strong. If you're buying for long-term appreciation, it's reasonable.
Ballard. Waterfront upside. Walkability. Market is efficient (prices are fair, not cheap). But fundamentals are solid.
Downtown Seattle / Pioneer Square. Mixed results. Some buildings are strong (waterfront, modern). Others are empty windows and surface parking. Know the specific property.
South Lake Union. Overbuilt. New construction is still delivering. Rents are declining. Occupancy is weak. Not a bet I'm making in 2026.
Neighborhoods where condos are struggling: South Lake Union, First Hill, parts of Capitol Hill where new construction is still absorption-phase.
Financing Condos in 2026
Condo financing is tighter than single-family.
Warrantable buildings: Standard rates, 30-year terms, conventional financing. No problem. Fannie Mae will buy the mortgage.
Non-warrantable buildings: Portfolio lenders, jumbo loans, 20-year terms, 0.25–0.50% rate premium. Still doable, but more expensive and shorter term.
Buildings with condo-specific issues (special assessment coming, underfunded reserves, aging infrastructure): Some lenders will pass. You'll need a portfolio lender, and rates will be higher.
This is why pre-approval conversations matter. Lenders don't pre-approve the borrower the same way they pre-approve the property. Get pre-approved by a lender who will give you honest feedback on the building, not just your credit score.
Have a deal you want me to look at?
Is a 11% Price Decline Reason Enough to Buy a Condo?
Price decline is context, not conviction. The real question is: Does this condo solve my problem at a fair price?
If you're a first-time buyer and a condo solves your problem (affordability, location, no maintenance), then the 11% decline is a bonus—you're getting a deal on top of solving your life problem. For first-time buyers in Seattle specifically, a condo in a building with strong reserves and warrantable financing can be the most affordable path to ownership.
If you're an investor and you're buying based on price decline alone, you're chasing the wrong thing. You should be buying based on cash flow and fundamentals. If those numbers don't work, the price decline doesn't matter.
If you're a downsizer and you want a condo for the lifestyle, not the investment, then buy when the neighborhood and unit are right. Price matters, but it's not the primary decision. Downsizers selling a home in King County have leverage; the 11% condo decline creates opportunity to capture equity.
What Comes Next
The Seattle condo market in 2026 is a buyer's market. Inventory is up. Prices are down. Selection is high.
This is rare. It doesn't last forever.
If you've been waiting on the sidelines because Seattle condos were "too expensive," this is the window to actually look at neighborhoods and buildings and ask yourself: does this make sense for my situation?
The answer might be yes. It might be no. But at least you can make that call from a position of optionality instead of FOMO.
I've closed first-time buyer transactions and investor deals across Seattle's condo market. I know which buildings finance clean, which neighborhoods have real demand, and what the hidden costs actually are.
If you're thinking about buying a condo in 2026, let's run the numbers.
Ben Record is a licensed WA Realtor with Lions Realty Group and Commercial Financing Advisor at AAI Financial Group. He's closed 40+ residential transactions across King County, including 15+ first-time buyer deals. His job is to tell you what the market actually means for your situation.