Experts warn that Florida’s condo market could be on the decline amid rising costs and new safety regulations

The Sunshine State’s housing market is caught in a perfect storm that could soon send homeowners fleeing in droves.

Experts are predicting that the rising costs of home ownership — fueled by massive increases in home owner association (HOA) fees and a raft of new safety regulations — are poised to ignite a fire sale that could send shock waves through Florida.

Steven Kupchan, a real estate agent with One Sotheby’s International Realty, paints a grim picture.

“In the worst-case scenario, a significant number of housing associations could go bankrupt due to the inability to cover the costs of necessary repairs and maintenance,” he told the Daily Mail. “This could lead to widespread foreclosures, plummeting property values ​​and a ripple effect throughout the local real estate market.”

The problem began after the devastating collapse of Champlain Towers South in Surfside in 2021, which killed 98 people. The disaster prompted lawmakers to introduce new legislation mandating stricter safety checks for apartments older than 30 years. Owners must make the necessary repairs within a year of their inspections, or face hefty fines.

Many residents, already shocked by rising costs, have been forced to sell.

“If the crisis deepens, there could be a mass exodus of residents from stricken apartment buildings, leading to a glut of unsold properties and further price declines,” Kupchan added.

And with insurance premiums reaching astronomical heights, buyers are turning their backs on Florida condos, fearing they won’t be able to afford the costs. “Insurance companies may refuse to cover certain buildings or raise premiums to unsustainable levels, making it difficult for buyers to obtain financing,” he added.

Apartment owners are scrambling to unload properties before the new laws take full effect. Some have cut prices by up to 40% to avoid huge repair bills.

A three-bedroom unit in St. Petersburg, originally listed at $1.2 million, has had its price dropped to $715,000 — and is still on the market.

“Worst of all: look at the HOA fee. $2300 per month. Well, – said real estate expert Nick Gerli on social networks.

Homeowners like Karen Shipman are feeling the pinch. Shipman and her husband bought a second-floor apartment in Venice, Florida, for retirement in 2021, but now they’re worried about whether they can keep it. “I feel like it’s paradise lost right now,” she told ABC Action News.

The numbers are staggering. Condo listings in Palm Beach, Broward and Miami-Dade counties rose to 20,293 in the second quarter of this year, up from just 8,353 a year ago. Nearly 90% of those units are in buildings that are 30 years old or older — the same ones targeted by the new safety inspections.

The crisis has already hit home for many, with some units having hundreds of thousands knocked off their asking prices. In Tampa, Orlando and Fort Lauderdale, HOA fees have increased by over 16% this year alone, far outpacing the average increase in other major metro areas.

As the market braces for a possible downturn, Kupchan predicts that “market volatility” will likely affect property values ​​across the board, causing interest to shift from condos to single-family homes and fueling “increased review and new regulations” for financial stability and safety in the Florida apartment market.