A huge real estate event takes place on December 31, 2024.
Florida condos are under a lot of pressure this year. Ultimately, It’ll be a good thing. But, between now and the end of this year there’s a lot of work to get done in the condominium market…
To start, condo HOA fees continue to do one thing: go up. Why? Homeowners insurance is the big elephant in the room. For most condo buildings, insurance premiums are up 30-50% in the last few years. To simplify, owners who paid $400 – $600 in monthly HOA fees are now paying $600 – $900 per month.
Next are special assessments. The phot above shows work-in-process on a beachfront condo building renovating all the balconies. Regular readers recall the Surfside Condo collapse back in June, 2021. Since then, Florida implemented new rules.
The Condo Real Estate Event of a Lifetime
* Florida law requires every condominium’s annual budget to include both operating expenses and reserves for capital expenditures and deferred maintenance.
* Every condominium must complete a Structural Integrity Reserve Studies (“SIRS”) by the end of 2024. Here’s the kicker: any repairs that must be done to a building based on the SIRS report will be reported to the Condo HOA. Work that must be done will be paid by condo owners in special assessments. Again, HOA fees appear to be going up even more.
I’ve seen some buildings with assessments as low as $1 million or as high as $17 million. Divide that expense by the number of condo owners in that building and that’ll be your expense. Assessments like these are a burdensome real estate event that most folks won’t be able to handle.
And that’s where this real estate event gets wonky. You see, most of the owners of Florida beachside condos are folks who live here part time. Snowbird people. And, a high percentage of them bought 20, 30, 40 years ago. Back then they paid much less for their condo and when HOA fees were much lower.
These folks are now much older. And, the likelihood that they can pay all these increased fees, assessments etc… doesn’t look good. When they bought for retirement, they had a nest egg to work with. Imagine planning for an HOA fee of $150 per month, and 20 years later it’s $1000.
So, this condo real estate event may cause havoc for those who simply cannot afford more fees. And, to live during all the construction needed to upgrade buildings ruins the quiet lifestyle they’re accustomed to.
There are more details you may want to know and you can read it in The National Law Review, here.
Don’t Let This Real Estate Event Sideline You
The good news is there are lots of condominiums that’ve already completed these studies, begun work or have completed what’s required. So, if you’ve been waiting 30 years to own a Florida condo overlooking the Atlantic ocean, don’t let this slow you down. It just means we have more work to do when identifying one you like, then digging into the details.
And guess what? A real estate event like this is not uncommon. In my 30 years in this business, I’ve weathered almost every real estate event one can imagine.. and I’m still going strong.
[photo above: taken from Veteran Park overlooking the Intracoastal and Barr Terrace condos. This photo was taken on my “fancy-dancy” iPhone 13Pro]
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*** My “December How’s The Delray Beach Real Estate Market” Update is ready to watch
*** Customers often ask me about the closing process for buying/selling real estate in Florida. My recent essay on this is a nice place to start.
*** Every Saturday morning at 8am I’ll be walking from Anchor Park to… somewhere. Come along. We can go short or long distances. If meeting some new faces and getting some exercise is in your cards, Please Join Me.
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*** Inventory is Surging – UP 45% in 150 days! ***
* Last week there were 38,489 available…
* This morning’s Inventory is 39,849 *
… supply is UP again by 1,360 in the last week ***
