Miami apartment owners are being forced to lower their prices after lawmakers passed laws requiring them to undergo costly structural assessments.
The average sales price for a condo in Miami-Dade County fell to $420,000 in June, down 6 percent from a peak of $445,000 in March of this year.
According to a report by the Miami Association of Realtors.
But single-family homes in the county continued their astonishing 12-and-a-half-year run of appreciation, with prices rising at a year-over-year rate of 5.5 percent, from $622,500 to $657,000.
The difference between apartments and regular houses is that apartments in Miami are often located in elegant high-rises that have given the city’s coastline a new look over the years.
But after the deadly Surfside Condo collapse in 2021, Florida lawmakers passed a law requiring buildings 30 years and older with three or more stories to have 100-foot ceiling heights. to undergo major structural evaluations to become recertified.
High-rise apartment buildings line Miami’s South Beach, a narrow strip of land across the bay from the city center
This Miami condo was listed for sale last week for $399,000. After the three-bedroom, two-bathroom home was on the market for just six days, the sellers dropped the price by 6 percent to $375,000
Florida condo associations are also required to set aside a certain amount of money to make repairs. Many did not do this before the Surfside disaster, Miami Herald reported.
As buildings age, people looking to purchase an apartment or condo in an older building may face higher association fees.
In fact, according to Peter Zalewski, an expert on apartment complexes in Miami-Dade, what is needed is “open-heart surgery.”
“When you’re evaluating an apartment, you have to look at when it was built. Anything before 2000 is in a doom loop. Anything between 2000 and 2010 has a standing power. They have high cholesterol. They’re overweight. But it’s manageable. Anything after 2010 is healthy,” he told the Herald.
Zalewski, founder of real estate consulting firm Condo Vultures, added that all this turmoil in the market has made many buyers hesitant to dive headfirst into Miami real estate.
Buyers are well aware that the association costs may increase due to the mandatory repair reserves. However, this problem does not occur with single-family homes, which is why they are becoming increasingly popular.
Pictured: One Tequesta Point Condominium Complex. This building was built in 1995, which means it will need to be recertified in 2025 under new state law.
Aerial view of Icon South Beach Luxury Condos in Miami Beach
A low, elevated view of the Downtown Miami skyline with palm trees and Biscayne Bay in the foreground
Additionally, the inventory of single-family homes in Miami-Dade (four months) is much lower than that of condos (8.9 months), making it much easier to keep raising their prices as supply remains limited.
While real estate agents in Miami-Dade are selling homes like hotcakes, sellers looking to sell their condos continue to slash prices.
According to experts, apartments will only become cheaper in the coming months.
According to Jack McCabe, owner of real estate and economic research firm Jack McCabe Expert Services, the main question next year will be how much prices have fallen.
Zalewski advised buyers on South Florida’s troubled apartment market.
“If you’re a buyer, why would you get in when the meteor hits the Earth?” he said. “Watch until the prices come down.”
This comes as a major home price drop could be on the horizon in the southern US.