The one-two punch of increasingly intense natural disasters and the aftershocks of the 2021 Surfside condo collapse have punched major Florida metropolitan areas right in the housing market, with condo prices and sales dropping and insurance and HOA fees increasing astronomically.
So says a new report from real estate brokerage firm Redfin, which notes that Florida’s sellers are the mirror opposite of the national picture, where condo prices are rising, new listings are slowly increasing, and sales have stayed steady.
In Miami, for example, condo prices dropped 3%, sales fell 9%, and new listings increased 27%. Compare that to the Magic City’s single-family home market, where median sale prices rose over 10% from last January, with sales up 9% and new listings up 13%. The cautionary tale, though, is Jacksonville, where the condo market experienced a 7% price drop year-over-year in January, compounded with a 27% drop in sales and a 32% jump in new listings.
HOA issues
As if this wasn’t enough, even just owning a condo is getting more expensive. The average cost of homeowners’ insurance in Florida rose by around 40% in 2023 alone, with HOA fees increasing in price and number. Add in slow demand, and it’s no wonder prices are depressed.
“Condo costs are shocking,” said Juan Castro, a Redfin Premier Agent from Orlando in a report. “Condos that used to have a $400 monthly maintenance fee may now have a $700 fee. It’s causing buyers to rethink their plans.”
There is some good news: condo prices are still higher than pre-pandemic. For now.
Market still reeling from Surfside tragedy
That said, the aftershocks of the 2021 Surfside condo collapse continue to rock the Florida market. New condo regulations require HOAs to regularly assess building safety, but this good deed ends up costing condo owners in both higher maintenance fees (HOAs may be required to charge for maintenance and repairs) and each owners’ percentage of the HOA’s exterior-building insurance costs.
Worse yet, just getting into a condo is becoming more difficult. Lenders are now determining not just a buyer’s ability to pay not just the condo’s mortgage, but also the constantly rising HOA fees. Plus, lenders are now judging the health of condo buildings themselves.
Once the sale is made, buyers have to purchase homeowner’s insurance in the most expensive state in the union. Florida’s policies cost three times the national average. And it doesn’t look to get any better soon: the growing intensity of hurricanes and other natural disasters already have driven some insurance companies out of the state.
