Fears are mounting that the condo crisis is spreading beyond Florida as ANOTHER southern state is hit by falling sales and panicked homeowners sell their properties.

Condo sales are declining in major Texas cities, raising fears the state may be following in Florida’s footsteps.

Unsold homes are piling up in Fort Worth and Dallas as high insurance costs and destructive natural disasters make it difficult to sell condos, according to a new study. data of Redfin programs.

This comes as Florida faces a catastrophic housing crisis, which is causing condo listings to skyrocket as desperate homeowners try to flee.

In addition to high insurance costs and higher Homeowners Association (HOA) fees, homeowners are trying to get around a costly new law requiring additional safety checks.

According to Redfin, the number of condos for sale in Florida rose 53 percent in the year through July, but Texas is quickly catching up: In that period, it saw a 42 percent increase.

Across the United States, the number of condos for sale is also increasing and pending sales are declining, although not as much as in Florida and Texas.

In Houston, for example, condo inventory is up 35.9 percent, sales are down 35.3 percent and prices are down 6.5 percent.

In Fort Worth, listings are up 65.4 percent and sales are down 33.3 percent.

Meanwhile, in Dallas, the number of condos for sale has increased by 61.7 percent. In San Antonio, it has increased by 58.3 percent and in Austin, by 28.6 percent.

There are several reasons why demand for condos is cooling in the Lone Star State.

Frequent and intense natural disasters in Texas, as in Florida, are a major factor in rising homeowners insurance costs. This, in turn, contributes to rising fees for condominium building homeowners associations as maintenance costs are passed on to unit owners.

Those rising costs, coupled with the danger of being caught in a natural disaster, are scaring off condo buyers and motivating owners to sell, Redfin said.

Texas has been hit by extreme weather this year, including the largest wildfire in state history, flooding, tropical storms and the deadly Hurricane Beryl.

Real estate investors have also stopped buying condos. Instead, those who bought the properties to rent them out a few years ago are now trying to get rid of them.

Texas and Florida are also building more new homes than anywhere else in the country, adding to a backlog of unwanted condos as buyers move away.

Texas has seen a construction boom, but inventory is not being met by strong demand because of high interest rates, Daryl Fairweather, chief economist at Redfin, told DailyMail.com.

“There was a slight gap between what builders expected and actual demand,” he said.

Homeowners association fees are definitely an issue in Houston, he added, and prices have dropped a bit more in the city than in other Texas metropolitan areas.

“That could have to do with insurance, and also the environmental challenges that Houston has had,” Fairweather added.

“Last year, Houston experienced particularly strong storms, heat waves and power outages all at the same time. That makes living in Houston not a good choice from a quality of life standpoint.”

This comes as real estate agent Steven Kupchan revealed what he believes would be the “worst case scenario” for the Florida condo crisis.

Kupchan, an agent with One Sotheby’s International Realty, told DailyMail.com he believes there could be an intense domino effect.

“In the worst case scenario, a significant number of condo associations could file for bankruptcy due to an inability to cover the costs of necessary repairs and maintenance,” Kupchan said.

‘This could lead to widespread foreclosures, plummeting property values ​​and a domino effect throughout the local housing market.’

Recently, a new law was introduced requiring increased security controls in Florida condominiums.

The legislation was passed following the 2021 collapse of the Champlain Tower South in Surfside, which killed 98 people.

It later emerged that the condo association had postponed crucial repairs to avoid increasing costs, prompting lawmakers to introduce new regulations that will take effect at the end of the year.

Because of this, many residents have had to leave their condos and look for another place to call home: many have fled to Georgia, Texas, the Carolinas, and even moved out of the country to Mexico or Central America.

“If the crisis deepens, there could be a mass exodus of residents from affected condominium buildings, leading to a glut of unsold properties and further price declines,” he said.

Will the same thing happen in Texas?

Fairweather does not think so, but he does anticipate that the market will continue to slow down.

People may increasingly come to the conclusion that they would get more value for their money or better opportunities elsewhere, he said.

“A lot of people move to Texas looking for tax breaks. So if they start to feel like the value proposition in terms of affordability is no longer there, with higher property taxes and higher insurance costs, or a poorer quality of life or whatever, then I think that’s going to hold back the potential of Texas,” he told DailyMail.com.

Texas, more than Florida, could take all the additional tax revenue it receives from people moving there and reinvest it in better infrastructure, Fairweather said.

‘In Florida, I think the challenges are a little deeper. My gut feeling tells me that the increase in homeowner association fees is not an isolated change and that these types of costs in Florida will continue to rise steadily in the future.

“That’s largely because it’s much harder to do anything about it in Florida than it is in Texas. I think Texas as a whole is in a much better position than Florida as a whole.”