The increased cost of living in old age in once affordable condominiums has caused a crisis in the Florida real estate market.
Condo owners across the state are in a hurry to sell to avoid rising interest rates and special valuations, but buyers are not bitten.
Sales have fallen almost 15% compared to last year. This is based on April data from a Florida real estate agent. The outlook is even darker in the Tampa Bay Metro area, where sales fell 20%.
It’s been nearly four years since the Champlain Tower South Condominium collapsed on the surfside, killing 98 people. The South Florida disaster has urged lawmakers to step up safety inspections on old condominiums and demand cooperation for regular maintenance.
However, these changes have led to large special valuations and surged premiums in many buildings, said Dimitri Karides, broker at Sandkey Realty in Clearwater Beach.
“People are waiting for pins and needles to see what their next budget will look like and what their next assessment will be,” he said. “Sellers realize they might want to spend their money elsewhere.”
Cash-bound owners have dumped their homes in the market, with some at a loss.
Inventory has increased by more than 34% compared to last year. The median time it takes for a condo to sell is 91 days. That’s an increase of 10%.
According to Daryl Fairweather, chief economist at real estate company Redfin, the supply all means buyers have the advantage. They negotiate lower selling prices and in some cases have sellers cover the costs of pending valuations before closing.
The median selling price is currently at $335,000, down 6% from last year and more than 16% from April 2021.
Fairweather said prices could continue to decline until the end of the year as sellers agree that the condominium’s value declines.
The bill, sitting at Gov. Ron DeSantis’s desk, aims to reduce the financial burden on owners. If you sign the law, you will submit your savings research to the Condominium Association and give you time to fully fund two mandated changes depending on the surfside. When it’s time to fund the reserves, the association will be allowed to use credit or loans to cover those costs.
“It gives them a bit of a wiggle room,” said Rep. Vicki Lopez, R-Miami Rep., who is one of the bill’s sponsors. She hopes that it will help some people stay in the condo as it costs everything at once.
Owners now have time to assess their options, but Karides said many are still priced because of rising costs and forced sales.
“I don’t think it will change the dynamics of the market,” he said. “Someone will have to pay, there’s no way around that.”
