Florida’s condo market is faltering as the increasing intensity of natural disasters pushes up home insurance costs, and HOA fees soar in the wake of the 2021 Surfside condo collapse
SEATTLE–(BUSINESS WIRE)–
(NASDAQ: RDFN) — Prices of condos in major Florida metros are dropping year over year, and sales are declining, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. New condo listings are soaring as sellers try to offload their properties. That differs from the U.S. as a whole, where condo prices are rising, sales are holding steady and new listings are increasing at a much slower rate.
In the Jacksonville metro, for instance, the median condo price declined roughly 7% year over year in January, sales declined 27%, and new listings increased 32%. The story is similar in Miami, where condo prices fell 3%, sales dropped 9% and new listings rose 27%.
Florida’s market for single-family homes is faring better. Take Miami as an example: The median sale price of single-family homes increased by double digits from a year earlier in January, sales rose 9% and new listings increased 13%.
Florida Redfin agents say climbing costs are making condo ownership unattractive
Redfin agents report that Florida’s condo sales are slow because the cost of buying a condo has shot up, and listings are skyrocketing because the cost of owning a condo has shot up. The average cost of homeowners insurance across Florida increased by about 40% in 2023 alone, according to reports, and homeowners association (HOA) fees are multiplying for many condo buildings. In addition to slowing demand, the rising cost of insurance and fees are pushing prices down.
While condo prices are down from a year ago, they’re still much higher than they were before the pandemic—an affordability challenge that’s being exacerbated by rising insurance and HOA expenses.
“Condo costs are shocking,” said Juan Castro, a Redfin Premier agent in Orlando. “Condos that used to have a $400 monthly maintenance fee may now have a $700 fee. It’s causing buyers to rethink their plans.”
Florida’s HOA fees are increasing because there are new condo regulations in place this year in the wake of the 2021 Surfside condo collapse. The regulations require HOAs to regularly assess the safety of condo buildings, and in many cases collect more money for maintenance and repairs. HOA fees typically include a condo owner’s portion of insurance costs for the exterior of a building, while homeowners have a separate policy covering the interior of their condo.
In some situations, it’s also more difficult to attain a condo mortgage than a single-family home mortgage, even though condos are often considered a more affordable option. That’s because lenders require borrowers to have enough money to cover HOA dues, and also take into consideration the financial health of the condo building before writing a loan.
Home insurance costs are skyrocketing in Florida due to the increasing intensity of hurricanes and other natural disasters, with some insurance companies leaving the state altogether. Homeowners’ insurance costs three times more in Florida than the national average, making it the most expensive state in the U.S. to insure a home.
“Condos are sitting on the market much longer than they used to, with less interest from buyers,” said Jacksonville Redfin Premier agent Heather Kruayai. “Sky-high HOA costs are pushing buyers out of their monthly budget.”
To read the full report, complete with a table that includes more data, please visit: https://www.redfin.com/news/florida-condo-prices-dropping/
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country’s #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email [email protected]. To view Redfin’s press center, click here.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240226778672/en/
Redfin Journalist Services:
Isabelle Novak, 414-861-5861
[email protected]
Source: Redfin
Released February 26, 2024
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