Fears condo crisis is spreading beyond Florida as ANOTHER southern state is hit by plummeting sales and panicked owners sell up

Condo sales in major Texas cities are slowing, raising fears the state could follow Florida’s lead.

Unsold homes are piling up in Fort Worth and Dallas as high insurance costs and devastating natural disasters make it difficult to sell condos, facts from Redfin shows.

This comes at a time when Florida is facing a catastrophic real estate crisis, causing the supply of apartments to soar as owners desperately try to flee.

In addition to higher insurance costs and higher costs for the Homeowners’ Association (VvE), homeowners are also trying to avoid a new, costly law that requires additional safety checks.

According to Redfin, the number of condos for sale in Florida rose 53 percent in the year through July. But Texas is catching up fast — with a 42 percent increase in that time.

In the US, the number of apartments for sale is also increasing and the number of houses for sale is decreasing, but not as much as in Florida and Texas.

In Houston, for example, apartment supply increased by 35.9 percent, sales decreased by 35.3 percent, and prices fell by 6.5 percent.

In Fort Worth, the number of listings increased by 65.4 percent and sales decreased by 33.3 percent.

Meanwhile, Dallas saw a 61.7 percent increase in the number of apartments for sale, a 58.3 percent increase for San Antonio and a 28.6 percent increase for Austin.

There are several reasons why the demand for apartments in the Lone Star State is declining.

Frequent and intense natural disasters in Texas – as in Florida – are a major factor in the rising cost of home insurance. This in turn contributes to rising HOA fees in apartment buildings, as maintenance costs are passed on to unit owners.

Those rising costs, combined with the risk of being caught in a natural disaster yourself, are deterring condo buyers and motivating owners to sell, Redfin said.

Texas has been hit by extreme weather events this year, including the largest wildfire in state history, flooding, tropical storms and the deadly Hurricane Beryl.

Property investors have also shied away from buying apartments, with those who bought them a few years ago to rent them out now trying to sell them.

In addition, more new homes are being built in Texas and Florida than anywhere else in the country, which is driving up the number of unwanted apartments as buyers buy fewer and fewer.

According to Daryl Fairweather, chief economist at Redfin, Texas is experiencing a construction boom, but demand for homes is low due to high interest rates.

“There was a bit of a mismatch between what builders expected and what was actually being asked for,” she said.

Association fees are certainly an issue in Houston, she added, and prices in the city are slightly lower than in other major Texas cities.

“That could be due to insurance, but it could also be due to the environmental challenges that Houston faces,” Fairweather added.

“Houston has had particularly severe storms, heat waves and power outages all at the same time this past year. That makes living in Houston a lot less valuable from a quality of life perspective.”

Realtor Steven Kupchan recently revealed what he thinks would be the “worst case scenario” for Florida’s apartment crisis.

Kupchan, a broker for One Sotheby’s International Realty, told DailyMail.com he believes there could be a huge domino effect.

“In the worst case, many homeowners associations could go bankrupt because they can no longer afford the costs of necessary repairs and maintenance,” Kupchan said.

‘This could lead to large-scale forced sales, falling property prices and a domino effect on the local property market.’

A new law was recently introduced that requires stricter security checks for apartments in Florida.

The legislation was introduced after the 2021 collapse of the Champlain Tower South in Surfside, which killed 98 people.

It later emerged that the homeowners association had postponed major repairs to avoid higher costs, prompting lawmakers to introduce new rules that will go into effect at the end of this year.

This has forced many residents to leave their apartments and find new places to live, with many fleeing to Georgia, Texas, the Carolinas, and even Mexico and Central America.

“If the crisis worsens, there could be a mass exodus of residents from the affected apartment buildings, leading to a glut of unsold properties and further price declines,” he said.

Will the same thing happen in Texas?

Fairweather doesn’t think so, but she does expect the market to continue to slow.

People are increasingly realizing that they can get more value for their money or have better opportunities elsewhere, she said.

“A lot of people move to Texas for the tax benefits. So if they feel like the value proposition of affordability is just not there anymore, with higher property taxes and higher insurance costs or a lower quality of life or whatever, then I think that will slow the potential of Texas,” she told DailyMail.com.

According to Fairweather, Texas, more than Florida, could reinvest any additional tax revenue it receives from people moving here into better infrastructure.

“In Florida, I think their challenges are a little bit greater. My gut feeling is that the increase in HOA fees is not just a one-time change, and that these types of fees in Florida are going to continue to increase consistently going forward.

“A lot of that is because Florida’s climate change challenges are much harder to address than Texas’. I think Texas as a whole is in a much better position than Florida as a whole.”