Southern state hit by mass exodus of condo owners spooked by ‘catastrophic’ market in wake of costly new law that could ‘bankrupt’ residents

The number of condos for sale in Florida has skyrocketed as owners desperately try to dodge a new, expensive law that requires stricter security checks.

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 institute new rules that will go into effect at the end of this year.

This has caused a surge in the number of apartments on the market, particularly in South Florida, with warnings of a “mass exodus.”

According to ISG World, there were 20,293 condos for sale in Palm Beach, Broward and Miami-Dade counties in the second quarter of 2024.

The figure is a 143 percent jump from 8,353 in the same period last year. Nearly 90 percent of the properties for sale are buildings older than 30 years.

Under the new guidelines, apartment buildings older than 30 years or with more than three floors will have to be inspected more often from December 31.

The costs for insurance and Owners’ Association (VvE) to meet the special valuation requirements have also increased considerably.

“The cost of a condo is shocking,” said Juan Castro, a Redfin Premier agent in Orlando. “Condos that used to have a $400 monthly maintenance fee now might have a $700 fee. It’s making buyers rethink their plans.”

Arkadiy Kats, 71, already pays $340 a month for a special tax and $897 a month for monthly homeowners’ association dues.

He is expected to contribute another $731 to the reserves next year.

He has decided to go back to working as a real estate agent to cover the costs.

“I can’t retire because I don’t have money for food, car insurance, gas,” Kats told the Miami Herald‘All these payments – VvE, reserves, special levies – come from my Social Insurance.’

Arkadiy Kats, 71, is one of the apartment owners who hopes to sell before the new regulations come into effect

The stricter security checks are causing the costs of the Owners’ Association (VvE) to increase, causing many people to sell their homes.

Craig Studnicky, CEO and broker at ISG World, said he is “very concerned” about the current state of the apartment market. He described the situation as follows: Newsweek as ‘a mass exodus, driven by fear, with retirees falling between the cracks.’

“A lot of these people that live in these buildings are older, most of them are retired. They are on a fixed income,” Studnicky said. NBC.

“They don’t want to write those checks for special levies. They’re hoping someone will come and buy them, but there’s no one willing to take that risk right now.”

‘Apartment owners in old buildings want to sell their properties as quickly as possible before the physical investigations begin, which can reveal structural defects, but it is already too late.

‘There is a flood of homes over 30 years old coming onto the market, but buyers are staying away.’

Condo prices are starting to fall as buyers look to sell them. In June, a typical Florida condo cost $316,700, according to Redfin, down 1.5 percent from the year before.

Listings on Zillow show apartments for up to $15,000 cheaper.

Meanwhile, the number of units sold has fallen by more than a quarter over the past year.

There were 20,293 condo listings in Palm Beach, Broward and Miami-Dade counties in the second quarter of 2024, ISG World reports. Pictured is a Palm Beach condo listed for sale at a $10,000 discount

Under the new guidelines, apartments older than 30 years or with more than three floors will have to be inspected more often from December 31.

Former Republican Senator Jeff Brandes, head of the Florida Policy Project, has called on Governor Ron DeSantis to take action.

“The Florida Legislature has created a catastrophic situation and must urgently convene a special session, as recommended by Governor Ron DeSantis, to address this man-made crisis.

Real estate experts are warning of an unprecedented surge in the number of condos for sale in Florida due to high special taxes, forcing desperate owners to sell their homes.

Lawmakers must take immediate action to alleviate this crushing financial burden that will bankrupt Floridians, especially our seniors, to protect apartment owners from this state-sanctioned/inflicted disaster. This is not a drill!’