Florida condo owners are slashing prices by as much as 40 percent in an effort to avoid huge repair costs.
Some units have lost nearly half a million dollars off their asking price as security fears trigger a sell-off in what real estate agents have described as the worst housing crisis in decades.
Earlier this year, a three-bedroom, two-bathroom condo in St. Petersburg was listed for sale for about $1.2 million.
But still with no buyer, the owner reduced the asking price first to $898,000 and last week to $715,000.
State legislation enacted following the 2021 collapse of the Champlain Tower South in Surfside, Miame-Dade County, which killed 98 people, means hundreds of thousands of condo owners must now shell out large sums for previously neglected maintenance.
The price of this two-bedroom condo in St. Petersburg, Florida, has been reduced from $1.2 million to $715,000 amid a sell-off in the market sparked by safety fears and rising fees for owners.
Many could face charges greater than their mortgage payments, sparking a wave of distressed sales in the Sunshine State.
Karen Shipman, who bought a second-story condo in Venice, Florida, with her husband for retirement in 2021, said she was no longer sure she could afford to keep her home.
“I feel like it’s a lost paradise now,” he said. ABC Action News.
ISG World recently reported that there were 20,293 condo listings in Palm Beach, Broward and Miami-Dade in the second quarter of the year, compared to 8,353 in the same period in 2023.
Now DailyMail.com can reveal that an estimated 360,000 property owners in South Florida alone – the birthplace of the condominium boom – may not be able to afford the repairs required by the new law.
Joseph Hernandez, a property attorney and partner at Bilzin Sumberg in the state, said many of them are already looking to sell their units at a loss before they face huge repair bills.
The problem they face, however, is whether anyone will want to buy them even at deep discounts, given the conditions imposed.
The Champlain Tower disaster highlighted widespread neglect of older condominiums, with associations postponing crucial repairs to save money.
This prompted lawmakers to introduce SB 4-D in May 2022, which would require all Florida condos 30 years or older to undergo an inspection by the end of the year.
Condominium owners and associations must begin repairs and maintenance work noted in the report within one year of receiving it.
In the second quarter of the year, there were 20,293 condo listings in Palm Beach, Broward and Miami-Dade, including this one in Surfside, which first appeared on Zillow for $699,000 in 2022 and is now available for $545,000, a 22 percent reduction.
This two-bedroom, two-bathroom Tampa condo has seen its price reduced from $515,000 to $449,900 since May, a 12 percent cut.
And in Naples, a two-bedroom, two-bath condo, also built in 1981, has seen its asking price reduced by 21 percent, from $439,000 to $345,000 since it was first listed last year.
Nearly 90 percent of the more than 20,000 units listed for sale in Palm Beach, Broward and Miami-Dade are in buildings 30 years old or older.
Last week, there were a total of 45,890 condos listed for sale on Zillow in Florida.
Of these, 9,546 had a price reduction, according to Newsweek Magazine.
Most of those discounted sales took place in St. Petersburg, Sarasota and Venice on the West Coast and in Miami, Fort Lauderdale, Boca Raton and West Palm Beach on the South and East Coasts.
The St. Petersburg property whose price has dropped by 40 percent was built in 1975.
This was highlighted in X by real estate expert Nick Gerli, who pointed out that the owner was selling his unit for less than what he bought it for in 2020.
“The worst part of all is that you have to look at the homeowners association fee: $2,300 a month. What a shame!” he added.
Rates have risen nearly 60 percent over the past five years in South Florida, according to RedFin data obtained by The Miami Herald.
The increase is intended in part to cover special assessment requirements under the new security law.
State legislation enacted following the 2021 collapse of the Champlain Tower South in Surfside (pictured), which killed 98 people, means hundreds of thousands of condo owners must now shell out large sums for previously neglected maintenance.
As insurance premiums are also soaring, the exorbitant additional costs have prompted warnings of a “mass exodus” from the market.
Hernandez told DailyMail.com he expected there to be “severe consequences” for thousands of condo owners, many of whom are retirees on fixed incomes.
“Suddenly they will find themselves in a position where they cannot pay what the law requires of them,” he said.
‘Condo associations will run into trouble because owners won’t be able to pay.’
He said many are already trying to sell their properties at deep discounts, adding: “If you wanted to have a really cheap place to live for a few years, you could probably come to Florida, but I don’t know if I would.”
Hernandez said condo owners were unlikely to find individual buyers willing to take the risk, but their salvation could be developers willing to buy the underlying land, which in many cases is more valuable than the dilapidated units themselves.
However, this could also prove complicated, as developers would be required by law to convince at least 80 percent (and more often closer to 95 percent) of unit owners in a building to sell in order to buy the land.
But condo owners are apparently still interested in trying their luck on the regular market, with several listings on Zillow offering discounts of around 20 percent.
Tighter security controls are driving up homeowners association fees, prompting many to sell
A 1981 one-bedroom, two-bathroom condo in Surfside that was listed on Zillow for $699,000 in 2022 is now available for $545,000, a 22 percent drop.
In Naples, a two-bedroom, two-bath condominium, also built in 1981, has seen its asking price reduced by 21 percent, from $439,000 to $345,000 since it was first listed last year.
And in Tampa, a two-bedroom, two-bath condo built in 1991 saw its price cut from $515,000 to $449,900 since May, a 12 percent cut.
There are 1.5 million condominium units in Florida, according to data from the condominium division.
Of these, about 925,000 are 30 years or older, about half of whom are in South Florida.
Of those, Hernandez estimates that about 80 percent are in buildings he describes as “functionally obsolete” — meaning their owners have not built up enough reserves to pay for the repairs now required by law.
This equates to approximately 360,000 units in South Florida alone.
There is talk of intervention by Governor Ron DeSantis, although it is unclear how this will materialize.
A years-long investigation into the collapse of Champlain Towers revealed that faulty support columns in the tenants’ garage and adjacent pool deck caused the devastating destruction.
Investigators determined there was “strong evidence” that the pool deck had caused the collapse by destabilizing the base of a support beam on the lower level of the tower.
Following the structural failure of the beam, the tower section fell before a neighboring portion of the condominium tower collapsed on top of it, according to the March 2024 report.
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