I want to tell you about a breakthrough I had this morning talking with a seller client, Randy. She helped me crack the code of why the condo market is in the state that it is in in our area. We have her lovely condo listed in University Place. Gated community, individual garage, a large and magnificently landscaped pond with waterfalls out the window, and close enough to walk to Trader Joe's without actually having to look at the parking lot. Priced more than fairly for what you get.
Days on market: 187.
We finally got it under contract. And now, after a careful reading of the resale certificate and the reserve study, our buyers have gone wobbly. They may yet walk.
Welcome to the 2026 Tacoma / University Place condo market.
The Split
Right now, single-family homes in Pierce County are going pending at a clip well north of 100% — meaning pretty much every house that comes to market gets scooped, some with more than one offer. Condos? Closer to 40%.
The NWMLS March numbers back it up: Pierce County's median condo price is $393,450, down 5.2% from a year ago, while active listings are up nearly 27%. Houses held their ground; condos slipped. Same city, same buyers, same interest rates — very different markets.
So what changed?
The Rules Changed — Twice
The first change is ours. Senate Bill 5129 took effect January 1, 2026, pulling every Washington HOA and condo association under pieces of the Washington Uniform Common Interest Ownership Act, with full compliance landing January 1, 2028. It sharpens disclosure around reserves, investments, and budgets. Boards can no longer quietly underfund the roof and hope for the best.
The second is federal. On March 18, Fannie Mae and Freddie Mac issued new condo lending rules that start biting August 3, 2026, with a second wave on January 4, 2027. The short version: associations need to contribute at least 15% of their annual budget to reserves — up from 10% — unless they have a recent reserve study funded at the highest recommended level. If a building can't show its math, units there become harder to finance with a conventional loan.
Pile on insurance premiums climbing, utility rates up 4–9% this year, and reserve studies that look undercooked thanks to construction inflation, and you get the same answer from three directions: dues have to go up.
Why Buyers Are Wincing
Higher dues aren't just a line item — lenders fold them straight into the buyer's debt-to-income ratio. A $120 bump in dues can quietly shave tens of thousands off the loan someone qualifies for at the same price. Which is exactly the kind of thing that makes an otherwise happy buyer suddenly quiet. Which brings us back to University Place. The unit is a genuinely good value. The community is well-run, well-located, and well-landscaped. And yet our buyers are sitting at the kitchen table flipping through the resale certificate, weighing whether to stay in.
That's the market.
The Takeaway
Condos are actively being re-priced to reflect all of this. Houses are insulated from all of this because nobody else is voting on your roof budget. BUT THINK ABOUT THIS - if your house’s roof starts leaking, or the furnace goes out, you are squarely on the hook for the whole thing. That’s home ownership. What is happening with condos is actually just softening the blow for owners. I think once HOAs are funded, condos may start to look attractive again!
For Now
If you're a condo seller: price realistically from day one, and have the resale certificate and reserve study in hand before you list — not after you're under contract. Be ready to offer an HOA credit or closing-cost help.
If you're a condo buyer: there is real value in Tacoma's condo market right now. But the building matters more than ever. A well-reserved, well-run association at a fair price is a bargain. A pretty unit in a building with a thin reserve and a big-ticket project coming due might cost you in the form of increasing dues.
Either way — if you're thinking about selling a condo this year, or considering buying one, give us a call.
