Florida Homeowners Scramble to Sell as Condo Market Becomes ‘Catastrophic’

Many Florida homeowners are seeking to sell their condos as homeowners association (HOA) expenses have risen greatly in price thanks to a new law.

This regulation was first introduced in 2022 after the Champlain Tower South in Surfside collapsed, resulting in the deaths of 98 people.

This was all done in an attempt to avoid special assessments. As a result, the condo ended up collapsing and killing many. Florida’s newest regulation is attempting to keep this from ever happening again.

These associations also must run proper inspections in a timely manner, especially as they need to be aware of any repairs that need to be done.

Enforcement officials could deem the building unsafe for human occupancy, which would lead to condo association directors receiving a civil lawsuit.

This deadline has caused many condo associations and condo owners to panic.

Much of these expenses are, in turn, being put on condo owners. As a result, many Floridians who own condos have seen their condo expenses skyrocket out of control. Many cannot pay what condo associations are asking for.

For example, condos that used to have a monthly maintenance fee of $400 now cost $700. This has led sellers to rethink where they live and is deterring buyers from purchasing the property.

For example, some people pay $340 for a special monthly assessment and $890 in monthly condo HOA fees. They are now expected to pay an extra $730 toward HOA reserves, equating to $1,960 a month on HOA fees alone.

Experts have stated that the number of condos up for sale will likely continue to greatly rise in the near future. In certain areas of Florida, such as South Florida, the condo market will see listings skyrocket.

This is up from 2023’s 8,353 condos for sale.

Ivan Rodriguez bought his condo for $190,000 in 2019 and initially listed it for $350,000. As he had no takers, he kept reducing the price until it was eventually sold for $110,000, which is 42% less than what he paid for it.

Anyone interested in buying a condo wants a unit 10 years old or younger, as these aren’t affected by the new law. However, not many of these are on the market, and any that do come up are snapped up pretty quickly.

One couple was refused a mortgage by the bank unless they were willing to put a 25% down payment on the condo they were considering buying due to the building having no reserves. This immediately put them off, so they decided to look elsewhere.

Craig Studnicky, the CEO of ISG World, stated that he’s “very concerned” about South Florida’s condo market, especially as it could soon become worse.

This is all down to there being more supply than demand. If people can’t get rid of their condo by selling it, they would prefer to abandon it in the hope of avoiding the high costs.

This includes uncertainties around the condos and banks refusing to lend to various communities based on the reports, which isn’t helped by those who could address the reports being underfunded. This all results in various consequences.

Studnicky explained, “A lot of these folks that live in these buildings are older, most are retired. They’re on fixed income. They do not want to write those checks for special assessments. They’re hoping that somebody’s going to come in and buy them, but there’s nobody out there that wants to take that risk right now.”

Many retired condo owners feel that if they do this, they will be forced to sell their homes. This is the last thing they want to do, but they might have no other choice.

Studnicky explained that this surge in condos up for sale in Florida is “a mass exodus driven by fear, with retirees caught in the crossfire.”

It is believed that should this happen, it will primarily affect coastal condos in various states. This has already led to calls for other state governments to address these issues before it’s too late.

However, not much else can be done unless local government officials decide to intervene and resolve the situation.

The issue is that DeSantis is the only person who can call a special session, so critics are waiting with bated breath in the hope that this does happen.

Brandes said, “Lawmakers need to take immediate action to alleviate this crushing financial burden that will bankrupt Floridians, especially our seniors, to protect condo owners from this state sanctioned/caused disaster.”