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Florida is hit by mass exodus of condo owners spooked by 'catastrophic' market in wake of costly new law that could 'bankrupt' residents
Condo listings in Florida have skyrocketed as desperate owners attempt to dodge a costly new law requiring increased safety checks.
The legislation was brought in 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 introduced new regulations which take effect at the end of the year.
As a result, the number of condos on the market has soared, especially in southern Florida, prompting warnings of a 'mass exodus.'
There were 20,293 condo listings in the Palm Beach, Broward and Miami-Dade counties in the second quarter of 2024, ISG World reports.
Condo listings in Florida have skyrocketed as desperate owners attempt to dodge a costly new law requiring increased safety checks
The legislation was brought in following the 2021 collapse of the Champlain Tower South in Surfside, which killed 98 people
The figure is an 143 percent leap from the 8,353 in the same period last year. Almost 90 percent of those for sale are in buildings more than 30 years old.
Under the new guidelines, condos older than 30 years or more than three stories will require increased inspections from December 31.
The cost of insurance and Homeowners' Association fees to cover the special assessment requirements has also jumped.
'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.'
Arkadiy Kats, 71, already pays $340 a month for a special assessment and $897 a month for monthly condo HOA fees.
Starting next year, he is expected to contribute an additional $731 toward reserves.
He has taken the decision to return to work as a real estate agent to help cover the costs.
'I cannot retire, because I have no money for food, car insurance, gas,' Kats told the Miami Herald. 'All of these payments — HOA, reserves, special assessments — is from my Social Security.'
Arkadiy Kats, 71, is among the condo owners hoping to sell up ahead of the new regulations
The increased safety checks are pushing up Homeowners' Association fees, prompting many to sell
Craig Studnicky, CEO and broker at ISG World, said he is 'very concerned' about the state of the condo market right now, describing the situation to Newsweek as 'a mass exodus driven by fear, with retirees caught in the crossfire.'
'A lot of these folks that live in these buildings are older, most are retired. They're on fixed income,' Studnicky told NBC.
'They do not want to write those checks for special assessments. They're hoping that somebody's going to come in and buy them, but there's nobody out there that wants to take that risk right now.'
'Condo owners in aging buildings are rushing to sell before the physical examinations start that could reveal structural defects, but they're already late to the party.
'We're seeing a flood of 30-plus-year-old units on the market, and buyers are steering clear.'
Condo prices are starting to fall as buyers seek to get rid of them. In June, a typical Florida condo cos $316,700 according to Redfin, down 1.5 percent compared to the year before.
Listings on Zillow show condos being discounted by as much as $15,000.
Meanwhile, the number sold has plummeted by more than a quarter over the last year.
There were 20,293 condo listings in the Palm Beach, Broward and Miami-Dade counties in the second quarter of 2024, ISG World reports. Pictured a Palm Beach condo being listed with a $10,000 discount
Under the new guidelines, condos older than 30 years or more than three stories will require increased inspections from December 31
Former Republican senator Jeff Brandes, who is head of the Florida Policy Project, has urged Governor Ron DeSantis to act.
'The Florida Legislature has created a catastrophic situation and must urgently hold a special session, as Governor Ron DeSantis recommended, to address this man-made crisis.
'Real estate experts warn of an unprecedented surge in Florida condo listings due to crippling special assessments, forcing desperate owners to sell.
Lawmakers need to take immediate action to alleviate this crushing financial burden, that will bankrupt Floridians, especially our seniors, to protect condo owners from this state sanctioned/caused disaster. This is not a drill!'
A years-long investigation into the 2021 collapse revealed that faulty support columns in the tenant garage and adjoining pool deck caused the devastating destruction.
Investigators determined that there was 'strong evidence' that pointed to the pool deck causing the collapse by destabilizing a support beam's base in the tower's lower level.
After the structural failure of the beam, the tower section fell before a neighboring part of the condo tower collapsed onto that, the March 2024 report found.
Lead investigator Glenn Bell said in the report: 'We have very, we think, conclusive evidence now that the pool deck collapsed before the tower.'