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Condo prices fall in glamorous, sun-soaked city because there are now more apartments than agents can sell
Sales of glamorous condos in Miami are cooling this summer, forcing owners to slash prices.
The median sales price for a condo in the metro dropped to $420,000 in June, down 6 percent from this year's high of $445,000 in March.
Condo values are now roughly the same as they were a year earlier, according to a report from the Miami Association of Realtors.
But single-family properties in the county are continuing their astonishing twelve-and-a-half year streak of appreciation. Prices increased at a year-over-year rate of 5.5 percent, jumping from $622,500 to $657,000.
The difference between condos and regular homes is that Miami condos are often housed in elegant high rises that have redefined the city's coastline over the years.
But following the deadly Surfside Condo collapse in 2021, Florida legislators passed a law that mandates 30-year-old plus buildings that are three or more stories to undergo major structural evaluations to become recertified.
High rise condo buildings line South Beach in Miami, a thin strip of land across the bay from the city's downtown corridor
This Miami condo was listed for $399,000 last week. After the three-bed two-bath home was on the market for just six days, the sellers cut the price 6 percent to $375,000
Florida Condo associations are also required to keep a certain amount of money on hand to deal with repairs, many of which didn't do this before the Surfside disaster, the Miami Herald reported.
As more buildings age, people looking to buy an apartment or condo in an older building may have the costs passed down onto them in the form of higher association fees.
Condo expert Peter Zalewski said older Miami-Dade condos essentially need 'open heart surgery.'
'When you assess a condo you need to look at when it was built. Everything before 2000 is in a doom loop. Anything between 2000 and 2010 has standing power. They have high cholesterol. They're overweight. But it's manageable. Anything after 2010 is healthy,' he told the Herald.
Zalewski, the founder of the real estate consultancy firm Condo Vultures, added that all of this turmoil in the market has made many buyers pause before jumping headlong into Miami real estate.
Buyers are well aware of the possibility of elevated association fees because of mandated repair reserve funds, but this problem simply doesn't plague single-family homes, fueling their continued rise.
Pictured: One Tequesta Point Condominium Complex. This building was constructed in 1995, which means it'll be up for recertification by 2025 under the new state law
Aerial photo of Icon South Beach Luxury Condos in Miami Beach
A low level elevated view of the Downtown Miami skyline with palm trees and Biscayne Bay in the foreground
Plus, the inventory of single-family homes in Miami-Dade (four months) is far lower than that of condos (8.9 months), making it much easier to continue raising prices for them as supply remains constrained.
So as realtors sell homes like hot cakes in Miami-Dade, sellers looking to unload condos continue cutting prices.
And experts say condos will only keep getting cheaper over the coming months.
Jack McCabe, owner of the real estate and economic research firm Jack McCabe Expert Services, said that by next year, talk will be dominated by how much prices have gone down.
Zalewski gave buyers advice in this fraught South Florida condo market.
'If you're a buyer, why would you jump in when the meteor hits the earth?' he said 'Watch for prices to pull back.'
It comes as a major correction in prices for homes across the southern US could be just around the corner.