A recent Redfin report throws the spotlight on Florida's condo market, revealing some interesting shifts that are reshaping the landscape for owners and buyers alike. Data from real estate brokerage Redfin shows a whopping 28.2% jump in the number of condos for sale in January, which is a stark contrast to the 11.1% increase nationwide. The culprits? Soaring insurance and homeowner association (HOA) fees.
Because of rising Association fees and increasingly-common special assessments, condos are taking much longer to sell.
While Florida's median sales prices for condos nudged up by 2.4%, thats less than the 8.4% growth for condos nationwide. Median prices for condos fell 6.5% in Jacksonville, by 4.8% in Orlando, 2.5% in Miami and by 1% in Tampa.
But it's not all gloomy. Cape Coral and North Port are seeing some gains, thanks to bouncing back from lows post-Hurricane Ian. It's a mixed bag, showing how local vibes and broader trends play off each other.
Digging into the nitty-gritty, the report highlights a dip in condo sales across major metro areas, with Jacksonville, Miami, and Tampa seeing notable drops. Orlando's the outlier here, managing to swim against the current with a slight uptick in sales. This indicates demand for condos is cooling across the state more than the rest of the country.
The condo market is very different than the single family home market which is doing much than the condo market. In Miami, the median sale price of single-family homes increased by double digits compared to January 2023 while the number of sales rose 9% and new listings increased by 13%.
What's behind the slowdown? Look no further than the daunting cost of condo ownership in Florida. We're talking about a 40% hike in property insurance in 2023, making Florida's rates triple the national average. That directly leads to higher monthly Association fees for owners.
The challenges don't stop there. Even if someone wanted to buy a condo, tighter lending rules are making it tough. If you need to get a mortgage like most people, there's a whole maze of requirements around HOA dues and reserve funds you have to navigate before a mortgage company approves your loan. Because of reserve requirements and financing rules, it's increasingly difficult - if not close to impossible - to find one that doesn't need a 25% or higher down payment.
Even though condos are generally less expensive than a single family home, these down payment requirements and monthly fees put affordable ownership out of reach for many people.
In a nutshell, Florida's condo scene is going through some growing pains, thanks to a cocktail of high costs and strict financing rules. But it's not all doom and gloom. With the right real estate agent by your side and a bit of savvy navigating, there's still plenty of opportunity for those looking to call Florida home.
Posted by Andy Mandel on
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