Florida Faces A Catastrophic Real Estate Crisis As Hordes Of Residents Flee the State In Mass Exodus
Florida faces a catastrophic real estate crisis that will soon cause a mass exodus.
Condominium prices have skyrocketed in southern Florida.
HOA fees (HOAs) have also caused skyrocketing insurance costs for residents.
Florida housing market has been severely affected. Thus, it’s creating an intense domino effect.
HOAs could go bankrupt due to the inability to cover the costs of necessary repairs and maintenance. As a result, this could lead to widespread foreclosures and plummeting property values. Thus, creating a ripple effect throughout the Florida real estate market.
What Caused This Nightmare?
Recently, a new law was introduced that requires increased safety checks on Florida condos.
The legislation was brought in following the 2021 collapse of the Champlain Tower South near Miami. The collapse killed 98 people.
It later emerged that the condo association had postponed crucial repairs to avoid increasing costs. As a result, this prompted lawmakers to introduce new regulations. Regulations that driving up condo costs.
The legislation lead many residents have had to leave their condos and look elsewhere to call home. It has also created insurance nightmares for condo owners due to the already soaring costs.
As a result, this could create a serious glut in unsellable condos.
This unpredictable climate in the state’s real estate industry will eventually affect the real estate market as whole.
Florida condo owners recently started slashing prices by up to 40% in an effort to dodge massive incoming repair costs.
Some units have had almost half a million wiped off their asking price. Owners fear a wave of sell offs in what realtors have described as the worst real estate crisis in decades.
One three-bedroom, two-bathroom condo in Saint Petersburg was listed at around $1.2 million at the start of the year.
But still without a buyer, the owner slashed the asking price first to $898,000 and then $715,000.
Most of those cut price sales were in Saint Petersburg, Sarasota and Venice on the west coast and Miami, Fort Lauderdale, Boca Raton and West Palm Beach on the state’s south and east coast.
ISG World reported that there were 20,293 condo listings in Palm Beach, Broward and Miami-Dade in the second quarter of the year. This is up from 8,353 in the same time frame in 2023.
Over 350,000 condo owners in South Florida Cannot Afford Required Repairs
It’s estimated that roughly 360,000 condo owners in south Florida may not be able to afford the repairs required by the new law.
The Champlain Tower disaster lifted the lid on the widespread neglect of old condominiums. HOAs postponed crucial repairs to save cash.
It prompted lawmakers to introduce the SB 4-D Bill in May 2022. The new law required all Florida condos aged 30 years and older to undergo an inspection by the end of 2024.
Condo owners and associations must start repairs and maintenance works flagged in the report within a year of receiving it.
Nearly 90% of the 20,000-plus units listed for sale in SE Florida are in buildings that are 30 years or older.
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