Buyers balk as insurance maintenance fees strain budgets
The once-hot Florida condo market is facing a downturn as prices fall, sales slide, and listings surge, according to a new report from Redfin. This contrasts with the national picture, where condo prices, on the whole, continue to increase.
In Jacksonville, the median condo price decreased by roughly 7% in January 2024 compared to the previous year. Sales also experienced a 27% decline, while new listings jumped by 32%. Miami tells a similar tale, with prices falling by 3%, sales dropping 9%, and new listings increasing 27%.
Soaring costs deterring buyers
Redfin agents point to the rising costs of condo ownership as the culprit. Escalating insurance premiums and multiplying homeowners association (HOA) fees are making Florida condos less appealing for buyers.
“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.”
Average homeowners’ insurance costs in Florida shot up roughly 40% in 2023 alone, and new regulations in the wake of the 2021 Surfside condo collapse are hiking HOA fees across Florida.
The new regulations compel HOAs to conduct regular safety assessments of condo buildings, often requiring hefty fees for maintenance and repairs. That’s why getting a condo mortgage can be more challenging than getting approved for a single-family home loan.
Challenges beyond affordability
Limited mortgage options for condos further complicate the issue. Lenders often require borrowers to prove financial reserves and may be less likely to approve loans for condos in buildings with questionable financial health.
All these factors, combined with Florida’s notoriously high insurance rates due to natural disasters, are creating a challenging environment for condo buyers.
Read more: How high insurance rates are driving away buyers in one state
“Condos are sitting on the market much longer than they used to, with less interest from buyers,” said Jacksonville Redfin Premier agent Heather Kruayai. “Sky-high HOA costs are pushing buyers out of their monthly budget.”
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