The Sunshine State continues to face a potentially catastrophic housing crisis that could soon cause a mass exodus.
Real estate expert and real estate agent Steven Kupchan has revealed what he believes would be the “worst case scenario” as condo costs have skyrocketed, especially in South Florida.
Homeowners association (HOA) fees, which residents pay for general upkeep of the neighborhood or condos in the shared building, have also caused insurance costs to skyrocket for residents.
Kupchan, an agent with One Sotheby’s International Realty, told DailyMail.com that he believes the Florida housing market will be severely affected and will trigger an intense domino effect.
“In the worst case scenario, a significant number of condominium associations could file for bankruptcy due to an inability to cover the costs of necessary repairs and maintenance,” Kuplan said.
Real estate expert and broker Steven Kupchan has revealed what he believes would be the “worst case scenario” as condominium costs in the market have skyrocketed, especially in South Florida. (pictured: a high-rise condominium tower in St. Petersburg)
Kupchan (pictured), an agent with Top Miami Team, told DailyMail.com that he anticipates the Florida property market will be severely affected and cause an intense domino effect.
‘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.
“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.
The legislation was passed following the 2021 collapse of the Champlain Tower South (pictured) in Surfside, which killed 98 people.
“Insurance companies could refuse to cover certain buildings or raise premiums to unsustainable levels, making it difficult for buyers to obtain financing,” Kupchan said.
He also predicted that buyers will face insurance nightmares due to already high costs.
‘Insurance companies could refuse to cover certain buildings or raise premiums to unsustainable levels, making it difficult for buyers to obtain financing.
“This could lead to further market contraction and increased financial pressure on existing owners,” Kupchan added.
As for the state’s real estate market as a whole, he suspects the industry will undergo a number of changes due to the calamity.
Kupchan believes there will be “market volatility” or unpredictable weather in the state’s real estate industry, which could eventually “affect property values in other sectors of the real estate market as well.”
Florida condo owners recently began cutting prices by as much as 40 percent in an effort to avoid the massive repair costs that are looming. (Pictured: The graffiti-filled Vitas building)
He also predicted that the crisis will lead to “increased scrutiny and new regulations” regarding the financial and safety stability of condos in the Sunshine State, which could also “impact the overall real estate market.”
Kupchan believes that as buyers begin to move away from condos, interest in single-family homes will begin to increase, “leading to a potential shift in the types of properties being bought and sold.”
Florida condo owners recently began cutting prices up to 40 percent in an effort to avoid huge incoming repair costs.
Some units have lost nearly half a million dollars off their asking price as safety 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 then to $715,000.
DailyMail.com has revealed that an estimated 360,000 property owners in South Florida alone – the birthplace of the condo boom – may not be able to afford the repairs required by the new law.
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.
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 state’s south and east coasts.
In 1975, a property was built in St. Petersburg, the price of which was reduced by 40 percent.
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.
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.
DailyMail.com has revealed 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.
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 or older.
Tighter security controls are driving up homeowners association fees, prompting many to sell
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.
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.
In Tampa, the average monthly homeowners association fee rose 17.2 percent over the year through July 31, according to Redfin.
In Orlando, rates rose an average of 16.7 percent, and in Fort Lauderdale they rose 16.2 percent, it found.
That compares with an average increase of 6 percent in the 43 most populous metropolitan areas Redfin analyzed.
Homeowners association fees also increased in West Palm Beach by 12.8 percent, in Jacksonville by 7.6 percent and in Miami by 5.7 percent.