29-05-2025
South Florida Condo Sales Collapse as Market Suffers 'Real Pain'
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
Condo sales continued plunging across South Florida in April—a sign that would-be homebuyers remain cautious of rising homeowner association (HOA) fees and growing costs for aging buildings, while widespread uncertainty around the U.S. economy is also taking its toll.
According to Juan Arias, South Florida-based director of market analytics at the region's condo market is "beginning to see the real pain" now, he told WLRN.
Why It Matters
The South Florida condo market saw an explosion in for-sale inventory in the months leading up to December 31, 2024, the deadline for a crucial milestone inspection of the state's aging condos required by new building safety legislation.
The new law, introduced as a response to the Surfside collapse of 2021, which killed 98 people, requires condo owners and associations to have sufficient reserves to cover necessary repairs and maintenance work and conduct a survey of reserves every decade.
While the law was meant to prevent another tragedy like that of the Champlain Tower South, it had the unwanted consequence of bringing up costs for condo associations and owners, many of whom tried to sell their units before facing higher fees. What they found, though, was an oversaturated market where too many people were trying to sell and not enough buyers were interested in what they were offering.
As a result, condo inventory has skyrocketed in South Florida, while sales and prices have started to fall, putting struggling condo owners in an even tougher spot.
What To Know
The pace of condo sales in South Florida saw a double-digit dip in Miami-Dade, Broward and Palm Beach County in April compared to a year earlier, according to data from the Miami Association of Realtors, at the same time as inventory continued growing.
Miami-Dade saw a drop in condo sales of 21.3 percent compared to a year earlier, the biggest among all three counties, while sales in Broward and Palm Beach County fell respectively by 19.2 percent and 14.4 percent.
This downward trend is reflected in the statewide and nationwide markets, where sales of single-family homes and condos have slowed down due to historically elevated mortgage rates, stubbornly high prices and growing fears of a looming recession.
"Sales activity has been sluggish both nationally and in South Florida as higher interest rates, lower employment growth and moderating migration are all impacting demand for homes and condos," Arias told Newsweek.
Residential condominiums in Sunny Isles Beach, Florida.
Residential condominiums in Sunny Isles Beach, Florida.
Getty Images
But the South Florida condo market is seeing much more dramatic price drops as a result of shrinking sales than the single-family homes market in the region, where inventory remains below pre-pandemic level and availability is limited.
"While single-family home prices continued to increase, condominium prices fell in April," Arias said. "Condo prices are declining by over 17 percent as pricing continues to deteriorate after almost a year of constant monthly pricing declines."
In Miami-Dade, according to the Miami Association of Realtors, prices were up 0.2 percent year-over-year last month. In Broward County, they were down 0.9 percent. In Palm Beach County, they were down by a steep 5.9 percent.
Even within the South Florida condo market, there are important nuances to consider—with more expensive condos somehow faring better than most affordable ones.
According to Arias, the region's condo market is reporting more sales for properties priced at $1 million and above than it is for those priced below $1 million, where sales volume has shrunk.
"In fact, while affordable condo sale activity remains below pre-pandemic levels, activity for more expensive condos remains elevated," he told Newsweek.
"Higher homeowner association [HOA] fees, assessments, and higher financing costs are impacting lower-priced condos, which tend to be older and have to go through their decennial certification," he added.
Some older condos in South Florida are facing challenges in meeting the certification required by the new law, with less than half of the condos in the region meeting their milestone inspection deadline by the end of last year. This, in turn, is making it difficult for condo buyers to secure the necessary financing for their purchases.
"Many of these condos that have yet to meet their inspection or have not had structural repairs done are being placed on a Fannie Mae blacklist, which prevents prospective buyers from getting one of the most affordable types of financing," Arias said.
"This is a significant challenge, as around half of transactions for lower-priced condos rely on financing. In contrast, almost 80 percent of sales for $1 million+ condos are all cash."
What People Are Saying
Realtor Alexei Morgado told Mortgage Professional America: "The condo market is in the midst of a perfect storm. The combined effect of these new laws made over 1,400 condos in Florida ineligible for the standard loan. Buyers now rely on non-QM loans to buy condos in Florida, and the rates and terms are worse."
MIAMI REALTORS Chief Economist Gay Cororaton said in a recent press release: "We're seeing a highly polarized market, with sales moving either in the lower price-tier markets that are affordable for most buyers or in the high-end markets where cash buyers make up about half or more of the sales."
What Happens Next
The challenges posed by the new building safety law to condo owners and associations are expected to be addressed by a bill passed by the Florida legislature this spring and now awaiting Governor Ron DeSantis' signature.
The bill, HB 913, would revise the recently introduced condo laws by extending by one year the deadline for the required milestone inspection and consequent structural integrity study, giving more time to associations to collect reserve funding.
"Condo properties need more time to meet their milestone inspections and also comply with structural repairs. Additionally, new financing options will allow many HOAs to move forward with required projects," Arias said.
While he thinks the bill to be signed by DeSantis is a positive measure, Arias doubts that it would drive a significant shift in the current condo market pricing trends.
"The headwinds of elevated financing costs, HOA costs, assessments and slower employment gains still remain," he said.
"The law is a move in the right direction, but further extensions to meeting milestone deadlines will remain increasingly unlikely as lawmakers weigh the benefits for current condo owners vs the potential of another building collapse."
