BUYING A CONDOMINIUM IN FLORIDA
The Negative News Surrounding Florida Condos
There’s a lot of buzz about the Florida condo market, with headlines proclaiming “condo fire sale,” “Florida condo crisis,” and “condo sales plummeting.” So, should you stay away from condos? Let’s explore.
If you’re considering a condo in Northeast Florida, you might be concerned about fees, special assessments, and rising insurance costs. While the news paints a grim picture, real estate is very local, and what’s happening in Florida may not reflect the situation in St. Augustine.
Understanding the Challenges Ahead
First, let’s address the challenges for many condo communities, especially those that are three stories or more and over 30 years old. Following the tragic Surfside condo collapse in 2021, Florida implemented new regulations to prevent such disasters. These rules mandate thorough inspections and require building up reserve funds for future repairs, leading to increased association fees.
In St. Augustine, we see many condo communities dealing with these regulations, but the impact varies. Unlike South Florida’s high-rise condos, St. Augustine primarily features two-story buildings, with fewer high-rises. This difference affects the scale and cost of special assessments. For instance, while the Greater Miami area has over 18,000 active condo listings, Northeast Florida has about 1,100, with both areas seeing about a 60% increase in inventory.
Special Assessments and Their Impact
Many condo owners face expensive special assessments due to deferred maintenance and underfunded reserves. For example, The Cricket Club in North Miami proposed a nearly $30 million special assessment, roughly $134,000 per unit owner. Some owners, unable to afford these costs, had to sell their condos at a significant loss.
So, should you buy a condo? It depends. I wouldn’t recommend buying a unit in an older building with poor financials, but there are plenty of options. If you seek a low-maintenance lifestyle with amenities, explore newer or well-managed condos. Review the association’s financial health to ensure a sound investment.
Why I Still Recommend Condos
Personally, I’m a fan of condos. I prefer not to maintain a yard or the exterior of a house. For instance, in my condo community with a healthy budget, we experienced two special assessments: $700 for insurance and $2,200 for a painting project. While these costs can be frustrating, they are necessary to maintain the property and keep monthly fees reasonable.
Market Trends and Price Fluctuations
The market for condos, especially those over 30 years old, is experiencing slower sales and lower prices. According to the Wall Street Journal, since 2020, condos under 30 years old have seen a 38% increase in average sales prices, while older condos have dropped by 12%.
In Northeast Florida’s St. Johns County, the median sale price for condos increased by 4.4% in May compared to last year, despite a 5-month increase in inventory. Condo affordability also improved by 8.5% from a year ago.
Final Thoughts
If you want to live in a condo, there are many options and room to negotiate. However, it’s crucial to examine the financials of any condo association to ensure a healthy budget and reserves for future projects. Keep in mind that special assessments are always a possibility with any HOA.
Everyone’s situation is different, so consider your priorities and long-term plans. If you’re looking to buy or sell a condo in Northeast Florida, contact us, and let’s navigate this market together and find the best opportunities!