The price of condos listed for sale in Florida continue their slide, as the state faces a worsening insurance crisis and sellers struggle with high homeowner association (HOA) fees.
The housing market in the Sunshine State is currently in a difficult situation. On one side, skyrocketing insurance costs are pushing owners to sell their condos; on the other, rising costs are discouraging buyers.
According to the latest update by real estate platform Redfin, published in late February, sales of condos in Florida plummeted in January even as listings jumped and prices fell, proving how reluctant buyers are to invest in such properties.
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While condo prices were up an average 8.4 percent year-on-year in the U.S. in January, some of Florida’s major metros saw a significant drop, with Miami reporting a 2.5 percent slump and Jacksonville a 6.5 percent decline, according to Redfin data. In Orlando, condo prices were down 4.8 percent year-on-year.
Newsweek contacted Redfin for comment by email early on Wednesday.
As of early on Wednesday, there were 44,623 condos listed for sale on Zillow in Florida, out of a total of 204,248 properties for sale in the state. Some 12,509 of these condos had a price reduction, a sign that sellers are willing to accept less than they think the property is worth if that means offloading it quickly.
The current crisis in Florida’s condo market is due in part to the rising costs of keeping a condo in the state, including higher HOA fees, as well as skyrocketing home insurance premiums.
Juan Castro, a Redfin Premier agent in Orlando, described condo costs as “shocking.” In a press release from the real estate platform, Castro said: “Condos that used to have a $400 monthly maintenance fee may now have a $700 fee. It’s causing buyers to rethink their plans.”
HOA fees in Florida have climbed because of new condo regulations imposed after the collapse of the 12-story Champlain Towers South condo building in Surfside on June 24, 2021. Some 98 people died in the tragic incident, which federal investigators found was due to construction flaws on the building’s pool deck.
HOAs are now required to regularly assess the safety of condo buildings and collect more money for maintenance and repairs if necessary. According to the website Florida Realty Marketplace, average HOA fees typically range between $100 and $350 in Florida, though this cost may vary depending on maintenance requirements and community amenities.
Meanwhile, the state appears nowhere near finding a way out of the insurance crisis that has been unfolding for the past few years. According to the Insurance Information Institute (Triple-I), Florida homeowners are paying the highest premiums in the country, an average of $6,000 in 2023.
The current crisis is due to a combination of factors, including excessive litigation costs, widespread fraud within the system, the higher risk associated with climate change and the exodus of several major private insurers from the state.
While the Florida legislature has passed some measures to fix the situation, including allowing six new insurers to write policies in the state this year, homeowners in the state are yet to feel a positive change.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
