Investor Warns Florida Condo Crisis Could Become a National Concern

Florida condos 30 years or older are facing a series of regulations from the Condo Safety Act 2022 that could cause valuations to plummet.Photo by(Barrons/Getty Images)

Florida’s condo market is facing a crisis that could have far-reaching consequences across the U.S., with 80% of condo owners in the state at risk of losing money on their properties, according to top real estate investor Grant Cardone. The combination of skyrocketing insurance premiums, inflation, and rising interest rates has created a “perfect storm,” Cardone told the Daily Mail, predicting that this situation could fuel a broader national property crisis.

The crisis is being driven by new state laws passed after the tragic 2021 collapse of the Champlain Towers South in Miami-Dade County, which killed 98 people. These laws require extensive repairs on aging condominiums, and many property owners simply cannot afford the upgrades. As a result, some condo owners have had to slash prices by as much as 40% just to sell their properties.

Cardone, who owns 15,000 properties, warned that the financial burden placed on condo owners and associations could spread beyond Florida, putting homeowners’ associations (HOAs) across the country at risk of bankruptcy if the federal government doesn’t intervene. "There is no time left to solve this problem," he cautioned, calling it a bigger issue than global warming.

One condo owner in St. Petersburg, who initially paid $1.2 million for their property, was forced to sell for $715,000—a staggering $485,000 loss. The number of condos listed for sale in South Florida has also surged, with 20,293 units on the market in the second quarter of this year, up from just 8,353 in 2023, according to ISG World.

As condo prices continue to fall, similar trends are emerging in Texas, with condo sales declining in cities like Dallas and Fort Worth, signaling the possibility that the crisis could expand beyond Florida. Rising insurance costs, natural disasters, and escalating HOA fees are scaring off potential buyers, further straining the market.

Experts warn that if left unchecked, the Florida condo crisis could be a harbinger of broader economic instability in the housing sector nationwide.

Attributions:
Daily Mail
Barrons