Florida condo owners are slashing their prices by up to 40 percent in an effort to avoid huge repair bills.
Some homes have lost nearly half a million dollars in asking prices as safety concerns sparked a wave of sales in what estate agents describe as the worst property crisis in decades.
A three-bedroom, two-bathroom apartment in St. Petersburg was listed for sale earlier this year for about $1.2 million.
But still without a buyer, the owner first lowered the asking price to $898,000 and last week to $715,000.
State legislation, enacted after the 2021 collapse of the Champlain Tower South in Surfside, Miami-Dade County, which killed 98 people, means hundreds of thousands of apartment owners are now on the hook for hefty sums for previously neglected maintenance.
This two-bedroom condo in Saint Petersburg, Florida, has been reduced from $1.2 million to $715,000 following a massive market sell-off fueled by safety concerns and rising costs for owners
Many people are facing higher costs than their mortgage payments, creating a wave of foreclosures in the Sunshine State.
Karen Shipman, who with her husband bought a second-floor condo in Venice, Florida, for their retirement in 2021, said she was no longer sure they could afford to keep their home.
“I feel like it’s a paradise lost now,” she said ABC Action News.
ISG World recently reported that there were 20,293 condos for sale in Palm Beach, Broward and Miami-Dade in the second quarter of the year, compared to 8,353 in the same period in 2023.
DailyMail.com can now reveal that an estimated 360,000 homeowners in South Florida alone – the land of the apartment boom – may not be able to afford the repairs required by the new law.
According to Joseph Hernandez, an attorney and partner at Bilzin Sumberg in the state, many of these companies are willing to sell their homes at a loss before they are faced with huge repair bills.
The question is, however, whether there is anyone who will want to buy them, even if they are offered at huge discounts, given the conditions attached to them.
The Champlain Tower disaster exposed the widespread neglect of old apartment buildings, with associations delaying major repairs to save money.
This prompted lawmakers to introduce bill SB 4-D in May 2022, which would require all Florida condos 30 years or older to be inspected by the end of the year.
Condominium owners and homeowners’ associations must commence the repair and maintenance work specified in the report within one year of receiving the report.
There were 20,293 condos for sale in Palm Beach, Broward and Miami-Dade in the second quarter of the year, including this one in Surfside, which first appeared on Zillow for $699,000 in 2022 and is now available for $545,000, a 22 percent decrease
The price of this two-bedroom, two-bathroom condo in Tampa has dropped from $515,000 to $449,900 since May, a 12 percent decrease
And in Naples, the asking price of a two-bedroom, two-bathroom apartment, also built in 1981, has dropped 21 percent from $439,000 to $345,000 since it first hit the market last year.
Nearly 90 percent of the more than 20,000 homes for sale in Palm Beach, Broward and Miami-Dade are in buildings that are 30 years old or older.
Last week, there were a total of 45,890 condos for sale on Zillow in Florida.
Of these, 9,546 had a price reduction, according to Newsweek.
Most of these sales took place in St. Petersburg, Sarasota and Venice on the West Coast and in Miami, Fort Lauderdale, Boca Raton and West Palm Beach on the South and East Coasts.
The property in St. Petersburg, whose price has been reduced by 40 percent, was built in 1975.
Real estate expert Nick Gerli highlighted this on X. He pointed out that the owner sold his apartment for a lower price than what he bought it for in 2020.
‘The worst: take a look at the Owners’ Association [homeowner association] compensation. $2,300/month. Ouch,’ he added.
According to data from RedFin, obtained by The Miami Herald.
The increase is partly intended to cover special assessment requirements under the new security law.
State legislation enacted after the 2021 collapse of the Champlain Tower South in Surfside (pictured), which killed 98 people, means hundreds of thousands of apartment owners now have to pay hefty sums for previously neglected maintenance
Now that insurance premiums are also skyrocketing, the additional costs are skyrocketing and warnings are being issued of a ‘mass exodus’ from the insurance market.
Hernandez told DailyMail.com he expected the situation to have “serious consequences” for thousands of apartment owners, many of whom are retired and on fixed incomes.
“They suddenly find themselves in a position where they can no longer pay what the law requires of them,” he said.
‘Corporate partnerships are getting into trouble because owners can no longer pay the rent.’
He said many are already trying to sell their properties at huge discounts, adding: “If you want to live cheaply for a few years, you could probably come to Florida, but I don’t know if I would.”
According to Hernandez, it is unlikely that apartment owners will find individual buyers willing to take the risk. He believes that developers willing to buy the land underneath could be a lifesaver, since in many cases that land is more valuable than the dilapidated apartments themselves.
However, this can also prove difficult, as developers are legally required to convince at least 80 percent (and more often almost 95 percent) of the owners of an apartment in a building to sell their property in order to purchase the land.
But apartment owners still seem to want to try their luck on the regular market, with Zillow offering several deals with discounts of around 20 percent.
The stricter security checks are causing the costs of the Owners’ Association (VvE) to increase, causing many people to sell their homes.
A 1981 one-bedroom, two-bathroom condo in Surfside that was listed on Zillow in 2022 for $699,000 is now listed for $545,000, a 22 percent decrease.
In Naples, the asking price of a two-bedroom, two-bathroom condo, also built in 1981, has dropped 21 percent from $439,000 to $345,000 since it first hit the market last year.
And in Tampa, the price of a two-bedroom, two-bathroom condo built in 1991 has dropped from $515,000 to $449,900 since May, a 12 percent drop.
According to data from the Department of Apartment Complexes, there are 1.5 million apartments in Florida.
About 925,000 of them are 30 years or older, about half of whom are in South Florida.
Hernandez estimates that about 80 percent of these buildings are in buildings he describes as “functionally obsolete.” In other words, the owners have not built up sufficient reserves to pay for the legally mandated repairs.
That amounts to approximately 360,000 units in South Florida alone.
There is talk of intervention by Governor Ron DeSantis, but what form that will take is not yet clear.
Years of investigation into the collapse of the Champlain Towers revealed that defective support columns in the tenant garage and adjacent pool deck caused the devastating damage.
Investigators determined there was “strong evidence” indicating the pool deck caused the collapse by destabilizing the base of a support beam in the lower level of the tower.
After the beam failed, the tower section collapsed before an adjacent section of the residential tower collapsed on top of it, the March 2024 report found.