Florida hit by 'worst real estate crisis in decades' as desperate condo owners slash prices by up to 40%: 'It's paradise lost'
Florida condo owners are slashing prices by up to 40 percent as they strive to dodge massive incoming repair costs.
Some units have had almost half a million wiped off their asking price as safety fears trigger a wave of sell offs in what realtors have described as the worst real estate crisis in decades.
One three-bedroom, two-bathroom condo in Saint Petersburg was listed at around $1.2million at the start of the year.
But still without a buyer, the owner slashed the asking price first to $898,000 and last week to $715,000.
State legislation brought in following the 2021 collapse of the Champlain Tower South in Surfside, Miame-Dade County, which killed 98 people, means hundreds of thousands of condo owners must now fork out hefty sums for previously neglected maintenance.
This two-bed condo in Saint Petersburg, Florida, has been reduced from $1.2million to $715,000 amid a mass market sell off sparked by safety fears and rising owner fees
Many could face fees greater than their mortgage payments, sparking a wave of distressed sales in the Sunshine State.
Karen Shipman, who bought a second-story condo in Venice, Florida, with her husband for their retirement in 2021, said she was no longer sure they could afford to keep their home.
'I feel like it's paradise lost now,' she told ABC Action News.
ISG World recently reported that there were 20,293 condo listings in Palm Beach, Broward and Miami-Dade in the second quarter of the year, up from 8,353 in the same time frame in 2023.
Now DailyMail.com can reveal an estimated 360,000 property owners in south Florida alone - the home of the condo boom - may not be able to afford the repairs required by the new law.
Joseph Hernandez, a property lawyer and partner at Bilzin Sumberg in the state, said many of these are already looking to sell their units at a loss before they are hit with huge repair bills.
The problem they face, however, is whether anyone will want to buy them even at massive discounts given the strings attached.
The Champlain Tower disaster lifted the lid on the widespread neglect of old condominiums, with associations postponing crucial repairs to save cash.
It prompted lawmakers to introduce the SB 4-D Bill in May 2022, which requires all Florida condos aged 30 years and older to undergo an inspection by the end of the year.
Condo owners and associations must start repairs and maintenance works flagged in the report within a year of receiving it.
There were 20,293 condo listings in Palm Beach, Broward and Miami-Dade in the second quarter of the year, including this one in Surfside, which first appeared on Zillow for $699,000 in 2022 is now available for $545,000, a reduction of 22 percent
This two-bed, 2-bath condo in Tampa has seen its price slashed from $515,000 to $449,900 since May, a 12 percent cut
And in Naples, a two-bed, two-bath condo, also built in 1981, has seen its asking price cut by 21 percent from $439,000 to $345,000 since it was first listed last year
Nearly 90 percent of the 20,000-plus units listed for sale in Palm Beach, Broward and Miami-Dade are in buildings aged 30 years and above.
Last week, there were a total of 45,890 condos listed for sale on Zillow in Florida.
Of these, 9,546 had a price reduction, according to Newsweek.
Most of those cut price sales were in Saint Petersburg, Sarasota and Venice on the west coast and Miami, Fort Lauderdale, Boca Raton and West Palm Beach on the south and east coast.
The Saint Petersburg property that has slashed its price by 40 percent was built in 1975.
It was highlighted on X by real estate expert Nick Gerli, who pointed out that the owner was selling their unit for less than they bought it for in 2020.
'Worst of all: check out the HOA [homeowner association] fee. $2,300/month. Ouch,' he added.
Fees have surged by nearly 60 percent over the past five years in South Florida, according to RedFin data obtained by The Miami Herald.
The rise is partly to cover the special assessment requirements under the new safety law.
State legislation brought in following the 2021 collapse of the Champlain Tower South in Surfside, (pictured) which killed 98 people, means hundreds of thousands of condo owners must now fork out hefty sums for previously neglected maintenance
With insurance premiums also soaring, the eye watering extra costs have prompted warnings of a 'mass exodus' from the market.
Hernandez told DailyMail.com he expected there to be 'severe consequences' for thousands of condo owners, many of whom are retirees on fixed incomes.
'They are suddenly going to be in a position where they can't pay what is required of them by law,' he said.
'Condo associations will fall into distress because owners can't afford to pay.'
He said many are already trying to flog their properties at huge discounts, adding: 'If you wanted to have a real cheap place to live for a few years you could probably come to Florida, but I don't know if I would do that.'
Hernandez said it was unlikely condo owners would find individual buyers willing to take on the risk, but their saving grace could be developers who want to buy the underlying land - which in many cases is more valuable than the dilapidated units themselves.
This, however, could also prove tricky as developers would be required by law to convince at least 80 percent - and more often closer to 95 percent - of unit owners in a building to sell in order to buy the land.
But condo owners are seemingly still keen to try their luck on the regular market, with several listings on Zillow offering discounts of around 20 percent.
The increased safety checks are pushing up Homeowners' Association fees, prompting many to sell
A 1981 one-bedroom, two-bathroom condo in Surfside that was listed on Zillow for $699,000 in 2022 is now available for $545,000, a drop of 22 percent.
In Naples, a two-bed, two-bath condo, also built in 1981, has seen its asking price cut by 21 percent from $439,000 to $345,000 since it was first listed last year.
And in Tampa, a 1991 two-bed, 2-bath condo has seen its price slashed from $515,000 to $449,900 since May, a 12 percent cut.
There are 1.5 million condo units in Florida, according to data from the division of condominiums.
Around 925,000 of those are 30 years or older, of which around half are in south Florida.
Of those, Hernandez estimates around 80 percent are in buildings that he describes as 'functionally obsolete' - in other words its owners have not built up sufficient reserves to pay for the repairs now required by law.
That works out at about 360,000 units in south Florida alone.
There is talk of intervention by Governor Ron DeSantis, although what form that will take is unclear.
A years-long investigation into the Champlain Towers collapse revealed that faulty support columns in the tenant garage and adjoining pool deck caused the devastating destruction.
Investigators determined that there was 'strong evidence' that pointed to the pool deck causing the collapse by destabilizing a support beam's base in the tower's lower level.
After the structural failure of the beam, the tower section fell before a neighboring part of the condo tower collapsed onto that, the March 2024 report found.
