Coffee and Covid today comments on a story that condo sales are down, and the examples are from the southeast:
“Prices for U.S. condominiums,” the Journal reported, “posted their biggest annual decline since 2012.” Condos are the canaries in the housing mine, but the Journal noted that increases in “single-family home prices have also slowed.” This referred to Florida–one of the hottest real estate markets in the country. But it wasn’t just Florida. The story also reported sagging condo prices in Austin and San Antonio due, get this, to “a glut of supply.”
It’s supply-side economics again!
The story rounded up some heart-rending personal anecdotes. For instance, in Flagler Beach, Florida, Sandra Phillips and Dennis Green have struggled since early last year to sell their townhouse. They delisted it in July, and plan to relist it soon at around $200,000–roughly the same amount they paid in 2020. “Flagler Beach is saturated with places for sale,” Sandra mourned.
I would expect many Florida condos are unsaleable now as new Florida laws have kicked in:
Florida condo and townhouse sales dropped 10.5% in 2024, the lowest in 15 years, according to trade association Florida Realtors, after a hike in special assessments and monthly fees due to new statewide condo safety legislation.
New data from real estate company Redfin suggests condo sales are moving inland and prices there are going up.
The median sale price for condos — meaning 50% of the condos cost less and 50% cost more — rose 5.4% year over year on average in January, Redfin said in a release Monday, while condos on Florida’s Gulf Coast saw a drop of 4.8% and condos on the Atlantic Coast dropped 3%.
Because of the condo building that collapsed in 2021:
Legislation passed in 2022 after the deadly June 2021 collapse of a 12-story condo in Surfside that killed 98 people led to a series of reforms in safety standards and requirements for milestone inspections for condo developments over 30 years old (about two-thirds of all condos in Florida), structural integrity inspections for condos three stories high and higher, and mandatory monetary reserves for large maintenance repairs and any needed structural upkeep or replacements, among other changes.
To get the money, condo associations imposed special assessments and significant hikes in monthly fees, which may have led to more condo owners selling but fewer people interested in buying.
As I mentioned, I was just in Florida, and even inland in Orlando, signs for condo remediation engineering were in all the roadway medians and on many billboards.
You would think people learned nothing from John D. MacDonald’s 1977 novel Condominium. I read it before the blog, but I heeded its lesson to never move to Florida.
