South Florida Condo Sales Plunge as Costs Rise

A tropical storm may be developing in the South Florida condo market, where a steep drop in annual sales coincides with rising homeowners association fees and skyrocketing insurance premiums.

There were 865 signed contracts in Miami-Dade County in June, a 26.8% drop from the 1,181 deals inked in June 2023. Broward County saw a dip of nearly 31% in annual comparison, with 412 contracts in June, down from 603 sales a year earlier.

Palm Beach County recorded 244 condo deals in June, a 33% fall from the 366 sales in June 2023, according to the latest Elliman Report. In Miami-Dade and Palm Beach counties, sales dropped across all price points, ranging from units priced below $200K to those priced over $5M.

Rising homeowners association (HOA) fees, exponential insurance cost increases and high interest rates are keeping many condo buyers on the sidelines. A combination of declining sales, rising costs and climbing inventory are likely to exert downward pressure on prices.

Miami-Dade currently has 8.6 months and Broward has 7.6 months of inventory, according to the latest Miami Association of Realtors monthly home sales report.

An upward spiral in homeowners association (HOA) fees is expected to accelerate this year as condo owners and landlords race to comply with a new Florida law that requires them to create funding reserves needed for structural repairs.

A law enacted in the wake of the Champlain Towers South collapse, which killed 98 people in Surfside in 2021, requires condos with three or more stories built 30 or more years ago—an estimated two-thirds of the condo buildings in Florida are that old—to undergo structural inspections.

Buildings within three miles of the coastline will have to get this done once they hit 25 years old.

The new law, known as SB 4D, requires the filing of mandatory structural reviews of older buildings, known as Milestone Inspection Reports, by the end of this year. The law also requires association boards to increase repair funding reserves in 2025.

Many condo building owners in Florida are facing six-figure special assessment fees, according to a report in the St. Petersburg Catalyst.

At a city council meeting this month, St. Petersburg’s building department reported that 225 condo buildings in the city are racing to submit inspection reports this year. All of the buildings are within three miles of the coast.

“I’m hoping to get three-quarters of the buildings to submit by December,” Don Tyre, the building manager, said. “There are going to be some issues—this is a new regulatory environment. There’s only so many engineering firms that do this work.”