Thousands of South Florida condo owners forced to sell due to rising costs
MIAMI - South Florida faces a condo crisis as thousands of units flood the market, leading condo owners to sell due to rising costs.
Costs tied to upcoming safety deadlines to meet state requirements and rising insurance.
Last summer, the people living at Mariners Bay Condos made a difficult decision to eventually leave their homes on the water in North Miami to avoid paying over $100,000 each in dues and assessments to stay.
"I would get calls from some unit owners who were just in tears," shared association president Laura Galeano.
She said the board knew in 2022, they were in trouble.
"Insurance went up 800%, and that's insurmountable," explained Galeano, along with other expenses.
"It's not big, but you don't know what's under the hood, and that's where, you know, it can really get pricey," said Galeano, pointing to a crack above her balcony and other building issues. Some of the many reasons she says the association chose to sell to a developer last summer. A deal she says that's near the finish line.
"Deferred maintenance projects," said Galeano. "And for the 40 years and, you know, that would have been upwards of $100,000 each."
Building upkeep that is required to meet state laws designed to keep condos safer following the Champlain Towers South collapse in 2021.
Older condos, like the ones at Mariners Bay, have recently flooded the real estate market.
"I've never seen this before; close to 18,000 of them on the market right now," said Craig Studnicky, ISG World's CEO.
He provided us with research from his firm looking at condos available in Miami-Dade, Broward, and Palm Beach that are 30 years or older. He shared that there is over 24 months of inventory on the market and that those condos are plummeting in value, down 19% from last year.
"No buyer wants to take the risk of walking into a black hole in space," said Studnicky. "That's what a special assessment seems like at the moment, and the mortgage lenders feel exactly the same way."
It's why Mariners Bay's land development attorney advises all associations to consider a condo building buyout.
"It's going to depend on each building," said Liana Kozlowski with Shubin Law Group. "What kind of condition are they in? Have they done upkeep over the years? What is it going to cost to fund the reserves?"
And the cost proved too high at Mariners Bay. When the deal closes, all owners will move out of their waterfront homes for good.
"There's nothing like watching the rain come in or seeing dolphins play, and that's probably something I'll never have again," said Galeano.
Some state lawmakers asked for a special session to discuss the condo real estate crisis. However, as mentioned on Facing South Florida with Jim DeFede Sunday, local lawmakers agreed with the senate majority leader to wait until the regular legislative session to begin examining solutions.