South Florida Vintage Condo Market Plagued By Oversupply Of Resale Units
A review of the South Florida condo statistics shows that nearly 15,400 vintage condo units are listed for resale at an average price of more than $466,125 per unit.
It is a buyers market for South Florida vintage condos - units older than 25 years - as more than eight months of supply is currently listed for resale in the tricounty region of Miami-Dade, Broward and Palm Beach, according to an analysis by CondoVulturesRealty.com.
A vintage condo is not an industry designation but rather a term we are coining to identify older units that have existed for at least 25 years.
Condo buildings older than 25 years are said to be tougher to sell, more expensive to insure and burdened with significant association maintenance fees and special assessments.
These obstacles for vintage condos are the result of a series of changes to the Florida Condo Law in the aftermath of the collapse of the Champlain Towers South in the town of Surfside on the barrier island in Miami-Dade County on June 24, 2021, according to a recent report.
Statistically, buyers purchased an average of nearly 1,884 vintage units per month for a total of about 13,185 units in the first seven months of 2024.
Based on the current active listings in the Multiple Listing Service – a database used by Realtors to market condos – the South Florida area is in a buyers market with a supply of nearly 15,390 vintage units available for purchase.
Generally, six months of supply is considered equilibrium for the housing market. Less months indicates a sellers market and more months points to a buyers market from a negotiating perspective.
Some industry watcher expect a divergence in both demand and price for condos that are newer versus older than 25 years. It is unclear how dramatic of a disparity it will be in the months and years ahead.
This is an about-face from the pandemic years when a plethora of work-from-home employees relocated to South Florida from places such as California, Illinois and New York.
The influx of transplants to South Florida bought up or leased out much of the available housing supply, which increased prices and triggered new development.
Skyrocketing insurance prices, maintenance fees and special assessments - all sparked by the Surfside tragedy - joined with rising property values and high interest rates from Federal Reserve hikes to bring South Florida's housing market to a standstill in the second half of 2023.
Florida condo prices face added pressure as sellers - unable or unwilling to afford association fees - try to unload their properties even if it means at a deep discounts.
In response to the Surfside disaster, Florida is requiring associations that govern older condo projects to study the structural integrity of all buildings on their properties and begin funding the necessary repairs by January 2025, ending the practice of deferring work and costs.
People are dubbing this moment as the 2025 Condo Association Financial Cliff.
Remember, nearly 100 people died in the Surfside tragedy and a $1 billion settlement was reached with the families of the victims.
A federal investigation is currently underway but the preliminary reports suggest a flawed design coupled with a lack of upkeep by the condominium’s association contributed to the disaster.
The Florida Legislature has taken a number of steps - prompted by insurance companies threatening to withdraw coverage in the state - to ensure that nothing like this ever happens again by bringing more clarity to condo associations, which have a reputation for being shrouded in secrecy, intimidation and corruption.
Industry watchers are at odds as to the direction of the South Florida housing market through the end of 2024 and into next year.
Bullish investors are predicting housing demand will reignite once the Federal Reserve begins to cut interest rates.
Bearish investors contend that condo prices are too high from the run up in work-from-home buyers during the pandemic years and likely to collapse in the months ahead if the economy slows and these transplants leave South Florida.
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