Fears real estate crisis is spreading beyond Florida as residents in Western city see condo fees skyrocket

Condo residents in Utah have been blindsided by a huge increase in costs that could more than double monthly payments for some.

Homeowners in Bountiful, less than a half-hour drive from Salt Lake City, received a notice that their monthly homeowners association fees could soon reach more than $800.

This increase is largely due to an increase in insurance costs, residents of Orchard Corners Condominiums were told.

“The rising costs of labor, supplies, contracts, utilities and a significant increase in insurance – from $17,000 to $108,000 – have created financial challenges that require immediate attention,” the HOA release said.

Now panicked residents are worried about how they will get the money – and what it could mean for the future.

“It’s going to be very difficult for us to move if the listing says we have an $800 HOA,” resident Emily Horne said. KSL. “I feel like I’m stuck,” her husband Douglas added.

These residents join hordes of condo owners facing a perfect storm of rising premiums and insurance costs, forcing many to try to flee.

While these problems have largely been concentrated in Florida and parts of Texas, the fate of these residents points to a widening real estate crisis.

Emily and Douglas Horne bought their condo nearly four years ago, the couple told KSL, and currently pay $385 a month in HOA fees.

The proposed new amount of $800 is more than two-thirds of their mortgage payment, Douglas said.

The old insurance policy for the condo community was recently canceled, according to an August notice obtained by the outlet.

Residents said the policy was canceled after one of the units caught fire and needed repairs.

“I think it’s pretty ridiculous that we all have to pay for that one incident,” said Kelsey Hunziker, who has lived in the community since 2020.

As an alternative to the $800 per month payment, the HOA board has also proposed a smaller increase in monthly fees of 17 percent, plus a lump sum of $3,000.

Calvin Barnett, another homeowner, said he and his family have almost $3,000 saved, but they planned to save it for expenses for a new baby girl due in January.

For Hunziker it is ‘terrible timing’ just before the holidays.

“I don’t have much of my savings left right now,” she told the outlet. ‘It’s very tough.’

It comes as insurance costs are skyrocketing across the country, natural disasters are becoming more common and insurers are fleeing the riskiest areas.

Although Utah is less at risk of extreme weather events like states like Florida and Texas, the country still saw homeowners insurance rates increase by 20 percent last year, according to S&P Global.

In Florida especially, rising HOA fees and insurance costs, devastating natural disasters and new regulations are sending the real estate market into a tailspin.

Home sales in five major cities have plummeted due to a snowball crisis.

Fort Lauderdale, a city on Florida’s east coast, saw pending sales drop 15.2 percent year over year for a four-week period ending Nov. 10, according to a Redfin Analysis.

Some condo owners are offering their properties for 40 percent cheaper than they are worth just to unload them.

And in Miami, residents live in two apartment buildings are in turmoil after being hit with a huge $21 million special assessment for repairs – just 16 years after construction.

Some residents of the Brickell buildings are facing individual payments of more than $40,000, leaving them feeling blindsided and financially overwhelmed, and some are even considering selling their homes as a result.