How often that is used to say that non-Christians are doomed to Hellfire... but let's have a slightly different look at this.
Looking at the Greek original text, Jesus is saying is that people who don't believe in Him are ALREADY past the dividing line (krisis - base Greek word of crisis, meaning juncture) of "the realm of the living" vs. "the realm of the dead." In other words, the "condemnation" Jesus talks about is already happening right now and these people are already in that state RIGHT NOW.
But what about the second part of the quote? What does it mean to believe in Jesus? It means to believe in His Name and His Word (to use Christian catch-phrases). But what do these phrases really mean? I believe His Name Yeshua means "God saves/God rescues" (click on link for more) and His Word (a.k.a. concept/teaching/thought) is "Love God, love your neighbor, love your enemies, forgive!" (Scriptural, from the Gospels of Mark, Matthew, and Luke).
So the "condemned" are the people who do not believe in these concepts, which means they are spiritually "lost" and in the realm of the "dead" already, even while alive in the flesh - they are the prodigal (extravagant) sons wasting their lives. The condemnation really means they are already in the wrong lifestyle and believing the wrong things.
Is this true? We know from watching the world around us that indeed, people who lay their treasure up on Earth in the form of riches, power, wealth, etc., are like the walking dead. We know also those who do not forgive are likewise caught up in that trap of negativity; we've seen the destructive effects. So we can see (right here on Earth!) for ourselves that the statement is TRUE RIGHT NOW. Just as Jesus said: already on the wrong side of the decision line.
And so the "condemned" suffer (spiritually) during their lifetimes, mistaking worldly wealth for happiness, and finding misery instead. What happens after physical death?
And if anyone hear My words, and does not believe, I do not judge him; for I did not come to judge the world but to save the world. He who rejects Me, and does not receive My words, has that which judges him - the word that I have spoken will judge him in the last day." John 13:47-48.
"You judge according to the flesh; I judge no one." John 8:15
"Do not think that I shall accuse you to the Father; there is one who accuses you - Moses, in whom you trust." John 5:45
Just as Jesus says in John 13:47-78, when such people die they are judged by the measure they judged by (what Jesus warned about in his "word," his teachings) - they feel the result of all their unloving actions, all their lack of forgiveness, and so on, and they feel the horrendous knowledge that their treasure was laid up on Earth and not Heaven. This is actually what a lot of NDEers testify as well: the measure we measured by in life is what is measured back to us (this is also Scriptural). Those who love Jesus, though, know that He forgives them, and thus they escape judgment because they go to Him out of love, and they know that God rescues and forgives, so they receive rescue and forgiveness. Otherwise, the measure is used against them. Or even worse, according to John 3:19-20:
"And this is the condemnation, that light has come into the world, and men loved darkness rather than light, because their deeds were evil. For everyone who does evil hates the light and does not come to the light, lest his deeds should be exposed." John 3:19-20
The ultimate "condemnation" (meaning, having already missed the mark and being on the wrong side of the decision line) is that the ones who love darkness WILL NOT COME TO THE LIGHT OUT OF FEAR OF EXPOSURE (very consistent with some NDE testimony about souls that avoid the Light). And that means when they die they don't go to God or to Jesus, and we KNOW what it means to willingly stay away from God - it is to be deprived of love, which is to be in Hell. That is also what a lot of NDE people have seen: Hell is the state of being away from God, and so many souls automatically avoid God and hence choose Hell because they do not want to be exposed in the Light. Just as Jesus said. How consistent it is!
"If I do not do the works of My Father, do not believe Me; but if I do [the works of God], though you do not believe Me, believe the works, that you may know and believe that the Father is in Me, and I in Him." John 10:37
"Thomas, because you have seen Me [resurrected from the dead], you have believed." John 20:29
"Unless you see signs and wonders, you will by no means believe." John 5:48
Jesus answered and said to [Nathanael], "Because I said to you, `I saw you under the fig tree,' do you believe?" John 1:50
[The Samaritan woman] "Come, see a man who told me all the things I ever did. Could this be the Christ?"... And many of the Samaritans of that city believed in Him because of the word of the woman who testified, "He told me all that I ever did." John 4:29 and 4:39
Jesus answered them and said, "Most assuredly, I say to you, you seek Me, not because you saw the signs, but because you ate of the loaves and were filled." John 6:26
"Believe Me that I am in the Father and the Father in Me, or else believe Me for the sake of the works themselves." John 14:11
And in my opinion, most of us are terribly, terribly blind....