The recent median sale price for Downey condos is $505,000, a decrease of 22.3% compared to the previous year (PropertyShark, 2026). During the same period, the overall median price for homes in Downey was $926,000, showing a slight increase of 0.06% year-over-year. The significant drop in condo prices should be viewed in light of the condo market's characteristics, where a few transactions can greatly affect statistics due to low transaction volumes. However, this volatility underscores the need for careful examination of the financial status of the homeowners' association when investing in condos.

Recent market trends indicate a notable increase in condo insurance premiums across California. Rising reinsurance costs and litigation risks are driving up condo insurance premiums nationwide, with California, particularly at risk for wildfires, experiencing even larger increases (Insurance Information Institute). While Downey is not located near the coast or wildfire-prone areas, homeowners' association insurance is often renewed based on the overall risk assessment by insurers across California, making it difficult to be completely insulated from this trend. In 2026, it is projected that rising construction and labor costs, increased wildfire risks, and higher reinsurance costs will continue to drive up homeowners' association insurance premiums (Silver Creek Asset Management, 2026). The increase in insurance premiums will ultimately be passed on to owners through higher management fees or special assessments. Reports indicate that monthly management fee increases ranging from $200 to $700 or special assessments per unit from $1,000 to $5,000 are not uncommon.

The SB 326 balcony law, enacted in 2019, is also linked to insurance costs. External structures like balconies in buildings over three stories must be inspected every nine years, with the first inspection deadline set for January 1, 2025. If repairs are needed, the costs will be reflected in the reserve study, and associations with insufficient reserve funds are likely to resort to special assessments.

This trend also impacts loan eligibility. If a homeowners' association's reserve fund is less than 10% of the budget or if the delinquency rate exceeds 15%, it may be classified as a non-warrantable condo according to Fannie Mae and Freddie Mac standards, making conventional loans more difficult to obtain (Fannie Mae, Freddie Mac Selling Guide). This is why it is essential to review the homeowners' association's financial statements, recent insurance renewal history, and any planned special assessments before purchasing.

Specifically, it is practically helpful to check the following five items in order:

• Review the homeowners' association's financial statements and budget for the past 2-3 years
• Check the results of the reserve study and the reserve fund accumulation rate
• Confirm any pending or planned special assessments
• Review meeting minutes for any history of litigation or disputes
• Check the rate of increase in insurance premiums during recent renewals

These items can be verified by requesting written documentation from the homeowners' association (refer to the NAR condo purchase guide). Especially in a rising insurance premium environment, associations may reduce coverage or increase deductibles to mitigate premium increases, which could lead to a greater burden on individual owners when actual losses occur, making it advisable to also review the insurance policy details.

In markets like Downey, where condo transactions are not very active, it is difficult to make judgments based solely on price statistics. To accurately assess actual holding costs and resale potential, it is necessary to review the homeowners' association's financial statements from the past 2-3 years, the results of the reserve study, insurance renewal history, and any pending litigation. After going through this verification process, it becomes easier to distinguish whether the price decline reflects a broader market trend or specific risks associated with a particular complex. This article does not constitute investment or legal advice, and it is recommended to consult with real estate and insurance professionals before making any actual contracts.