Florida condo owners are slashing prices by up to 40 percent as they strive to dodge massive incoming repair costs.
Condo owners and associations must start repairs and maintenance works flagged in the report within a year of receiving it.
Hernandez told DailyMail.com he expected there to be ‘severe consequences’ for thousands of condo owners, many of whom are retirees on fixed incomes.
There are 1.5 million condo units in Florida, according to data from the division of condominiums.
That works out at about 360,000 units in south Florida alone.
In an attempt to avoid facing enormous repair bills, condo owners in Florida are slashing prices by as much as 40%.
Fears about safety have caused a wave of sell-offs that have erased nearly half a million from the asking price of some units in what real estate agents have called the worst real estate crisis in decades.
Listed at approximately $1 point 2 million at the beginning of the year, was a condo in Saint Petersburg with three bedrooms and two bathrooms.
The owner did, however, lower the asking price twice—to $898,000 and $715,000 last week—still failing to find a buyer.
Following the 98 fatal collapse of the Champlain Tower South in Surfside, Miami-Dade County in 2021, state legislation mandates that hundreds of thousands of condo owners now pay hefty sums for maintenance that was previously neglected.
The Sunshine State may see a surge in distressed sales as a result of many people facing fees that exceed their mortgage payments.
For their retirement in 2021, Karen Shipman and her husband purchased a second-story condo in Venice, Florida, but she expressed doubts about their ability to continue living there.
She said to ABC Action News, “I feel like it’s paradise lost now.”.
20,293 condo listings were listed in Palm Beach, Broward, and Miami-Dade during the second quarter of this year, according to a recent report from ISG World. This represents an increase from 8,353 listings during the same period in 2023.
As of right now, DailyMail.com can disclose that 360,000 property owners in south Florida alone—the epicenter of the condo boom—might not be able to afford the repairs that the new law requires.
Many of these are already looking to sell their units at a loss before they are hit with large repair bills, according to Joseph Hernandez, a property lawyer and partner at Bilzin Sumberg in the state.
But given the conditions, their biggest issue is whether or not anyone will want to purchase them, even at steep discounts.
With associations delaying necessary repairs to save money, the Champlain Tower disaster exposed the pervasive neglect of older condominiums.
The SB 4-D Bill, which mandates that all Florida condos thirty years of age and older undergo an inspection by the end of the year, was introduced by lawmakers in May 2022 as a result of this.
Within a year of receiving the report, condo associations and owners are required to begin the repairs and maintenance tasks indicated in it.
In Palm Beach, Broward, and Miami-Dade, buildings 30 years of age or older house nearly 90% of the more than 20,000 units that are listed for sale.
There were 45,890 condos in Florida listed for sale on Zillow as of last week.
9,546 of these, according to Newsweek, had price reductions.
The majority of those discounted sales occurred in Miami, Fort Lauderdale, Boca Raton, and West Palm Beach on the east and south coasts, and in Saint Petersburg, Sarasota, and Venice on the west coast.
This property in Saint Petersburg was constructed in 1975 and has seen a 40% price reduction.
The owner was selling their unit for less than they paid for it in 2020, as real estate expert Nick Gerli brought attention to on X.
Worst of all, be sure to look into the homeowner association (HOA) fees. $2,300 every month. Oh no,” he continued.
According to RedFin data that The Miami Herald was able to obtain, fees have increased by almost sixty percent in South Florida over the last five years.
The increase is partially intended to meet the new safety law’s special assessment requirements.
The eye-wateringly high additional expenses, coupled with skyrocketing insurance premiums, have sparked fears of a “mass exodus” from the market.
Hernandez, a retired individual with a fixed income, informed DailyMail . com that he anticipated “severe consequences” for thousands of condo owners.
“They will find themselves in a situation where they are unable to make the required payments as per the law,” he declared.
“Owners who are unable to make payments will cause distress for condo associations.”. ‘.
“If you wanted to have a real cheap place to live for a few years you could probably come to Florida, but I don’t know if I would do that,” he said, adding that many are already attempting to flog their properties at enormous discounts. ‘.
Hernandez stated that while it was improbable that condo owners would find private buyers prepared to assume the risk, they might be saved by developers who wish to purchase the underlying land, which is frequently worth more than the run-down apartments themselves.
But this could also get complicated because, in order to purchase the land, developers would have to persuade at least 80%, and usually closer to 95%, of the unit owners in a building to sell.
However, a number of condo listings on Zillow are offering discounts of about twenty percent, suggesting that condo owners are still eager to try their luck on the open market.
For $545,000, a 22 percent decrease, you can purchase a 1981 Surfside condo with one bedroom and two bathrooms that was listed on Zillow for $699,000 in 2022.
Since going up for sale last year, the asking price of a 1981-built condo in Naples with two bedrooms and two bathrooms has been lowered by 21%, from $439,000 to $345,000.
Additionally, since May, the price of a 1991 two-bedroom, two-bath condo in Tampa has dropped by 12%, from $515,000 to $449,900.
Data from the Division of Condominiums shows that there are 1.5 million condo units in Florida.
Of those, about 925,000 are 30 years of age or older, with about half residing in south Florida.
Hernandez calculates that about 80% of them are in structures that are “functionally obsolete”—that is, whose owners haven’t saved up enough money to cover the repairs that are now mandated by law.
In South Florida alone, that comes out to be roughly 360,000 units.
Ron DeSantis, the governor, is rumored to be considering getting involved, but it is unclear exactly how.
The devastating destruction of the Champlain Towers collapse was caused by faulty support columns in the tenant garage and adjacent pool deck, according to a years-long investigation.
Investigators concluded that there was “strong evidence” that the collapse of the tower was caused by the pool deck, as it weakened the base of a support beam in the lower level.
Following the structural failure of the beam, the tower section collapsed before a nearby condo tower section collapsed onto it, according to the March 2024 report.
