Florida Condos Collapsing In Price As Owners Rush to Sell

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The real estate market in Florida is experiencing a massive shift as condo listings surge. The selloff is driven by new regulations requiring regular inspections of older properties and increasing homeowners association fees.

This trend is especially noticeable in South Florida, where worries about the structural stability of older structures have grown after the devastating Surfside condo collapse on June 24, 2021.

ISG World's CEO and broker, Craig Studnicky, voiced his worries over the current situation of the South Florida condo market. In an interview with NBC Miami, Studnicky expressed his "great concern" on the consequences of the recent spike in condo listings, particularly in light of the difficulties senior residents with limited incomes experience.

Recent data from ISG World highlights the dramatic increase in condo listings. In the second quarter of 2024, there were 20,293 condo listings in Palm Beach, Broward, and Miami-Dade counties, compared to just 8,353 during the same period last year. Nearly 90% of these units are in buildings over 30 years old, which are now subject to the new regulations mandating inspections by the end of the year.

"The looming deadline for inspections has created a sense of urgency among condo owners," Studnicky noted. "Many of these residents are older and retired, relying on fixed incomes. They are reluctant to bear the costs of special assessments required to address potential structural issues. As a result, they hope to sell their units before any defects are discovered, but the current market conditions are challenging."

Studnicky further commented on the situation to Newsweek, describing the surge in listings as "a mass exodus driven by fear, with retirees caught in the crossfire." He added, "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."

The increased scrutiny and financial burdens associated with maintaining older buildings are deterring potential buyers, resulting in a market flooded with aging units and limited interest from prospective purchasers. As the inspection deadline approaches, the situation is likely to intensify, with more condo owners potentially opting to sell their properties in an already saturated market.

As the condo market in South Florida grapples with these challenges, the impact of the new regulations and rising HOA fees will continue to shape the landscape of real estate in the region, leaving both sellers and buyers navigating a complex and evolving market.

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