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By Giulia Carbonaro
Senior Reporter
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Listings for condos in Florida are surging as changes requiring regular checks on older properties come into force and homeowners association (HOA) expenses continue to rise.
Experts have warned that the number of condos up for sale is likely to continue skyrocketing, especially in South Florida, where the tragic Surfside condo collapse took place on June 24, 2021. Craig Studnicky, CEO and broker at ISG World, told NBC Miami that he's "very concerned" about the condo market in South Florida.
ISG World recently reported that there were 20,293 condo listings in the Palm Beach, Broward and Miami-Dade counties, in the second quarter of 2024, up from 8,353 in the same period last year. Nearly 90 percent of those units are in buildings over 30 years old.
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According to the new regulation, buildings already 30 years or older must have inspections done before the end of the year—meaning that a crucial deadline is looming for many condo owners.
"A lot of these folks that live in these buildings are older, most are retired. They're on fixed income," Studnicky told the network. "They do not want to write those checks for special assessments. They're hoping that somebody's going to come in and buy them, but there's nobody out there that wants to take that risk right now."
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In a previous comment to Newsweek, Studnicky called the surge in condo listings in Florida "a mass exodus driven by fear, with retirees caught in the crossfire."
"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," he said. "We're seeing a flood of 30-plus-year-old units on the market, and buyers are steering clear."
The new regulation, SB 4-D Bill, was introduced in May 2022 in the aftermath of the collapse of the Champlain Tower South in Surfside which killed 98 people in 2021. Investigations following the incident revealed that the condo association had postponed major structural repairs to avoid raising assessment.
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After the deadline of December 31, condo associations will have to prove they have the necessary funds to complete the maintenance required, to run the inspections and for potential repairs.
Jeff Brandes, a former Republican state senator and president of the Florida Policy Project, is urging Florida Governor Ron DeSantis to take emergency action to address the "catastrophic situation" in the state's condo market, saying that this is a "man-made crisis" for which the Florida legislature is responsible.
"Real estate experts warn of an unprecedented surge in Florida condo listings due to crippling special assessments, forcing desperate owners to sell," Brandes wrote on X. "Lawmakers need to take immediate action to alleviate this crushing financial burden that will bankrupt Floridians, especially our seniors, to protect condo owners from this state sanctioned/caused disaster."
Brandes told Newsweek that the new regulation "could end up leading to some pretty catastrophic outcomes where people are unable to raise the money to fund their required reserves by state law."
"They are then forced to try to sell their condo or have a lien placed against their condo. And when this happens at scale, you could have potentially thousands of listings of condos," he said. "No buyers or very few buyers. Uncertainty around the condos. Banks refusing to lend to certain communities because of the reports and the underfunding to address those reports. And a series of cascading consequences."
Newsweek contacted DeSantis' spokesperson for comment by email on Thursday morning, outside of standard working hours.
Are you a condo owner or do you live in a 30-year-old condo in Florida? We want to hear from you. Contact g.carbonaro@newsweek.com to tell us how you feel about the new regulation and the future of Florida's condo sector.
Update 08/09/24, 5:50 a.m. ET: This article was updated with comment from Jeff Brandes.
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