What Eating Florida Condo Values?

Condo ownership in Florida is becoming less affordable due to the country’s high property insurance premiums constantly rising. As a result, condo owners, many of whom are older and on fixed incomes, are burdened with high homeowners association fees every month. To make matters worse, a new state law requires condos to set aside funds for their most significant maintenance expenses, which means HOA fees are likely to increase even more.

This law was passed in response to the deadly 2021 collapse of Champlin Towers in Surfside, which exposed condo boards’ flawed practice of deferring capital expenses. This is putting a significant financial strain on Florida’s condo owners, resulting in many of them attempting to sell their properties and causing prices to drop.

Redfin has reported that there has been a surge in new condo listings in Florida as property owners attempt to sell their units. This contrasts with the rest of the United States, where condo prices increase, sales remain stable, and new listings grow slower. In its Florida report, Redfin analyzed condo sales during January and compared them to the same period from the previous year. Based on this analysis, it was found that:

• In January 2024, the sale of condos in Jacksonville dropped by 27%, while new listings increased by 32%. The median price of the sold units also decreased by 6.5%, reaching $254,000.
• Meanwhile, in Orlando, the median sale price of condos fell by 4.8% to reach $200,000, and 23% more listings were recorded than the same month in the previous year.
• Miami saw a comparatively better situation, with the median price of condos sold in January decreasing by 2.5% from the previous year. However, sales decreased by 8.7%, and new listings rose by 27%.

“Condo prices remain high despite a year-on-year decrease,” according to Redfin’s study.

Condo sellers have good news, as the prices for these properties are increasing. However, the costs of owning one are becoming more absurd for potential buyers struggling to afford a condo purchase. A Redfin agent in Orlando, Juan Castro, pointed out that the maintenance fee for a condo that used to be $400 per month may now be $700, which is quite shocking. As a result, buyers are reconsidering their plans.