Florida Condos Are Not Selling

If you’ve been keeping an eye on the Florida real estate market, you’ve likely noticed an overwhelming number of condos sitting unsold. It’s not just a coincidence. In fact, there are three critical reasons why these properties are struggling to sell, and if you're a real estate investor, this could spell both caution and opportunity.

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1. Special Assessments Are Skyrocketing

• Many of these condos—especially those in buildings 30 years or older—are facing massive special assessments due to structural integrity checks. These inspections have become more frequent following the 2021 Surfside tragedy, where the collapse of Champlain Towers led to new laws requiring more intense building evaluations.

• For example, one condo owner in Williams Island was hit with an assessment of $224,000—more than the value of some homes! These costs are on top of rising monthly maintenance fees, which have doubled in some cases.

• Takeaway: If you're looking to buy, always check for upcoming special assessments. These can quickly turn a seemingly good deal into a financial headache.

2. HOA Fees Are Climbing

• Rising costs of materials and labor mean condo associations are continuously increasing HOA fees. And here’s the kicker: these fees aren’t likely to come down any time soon.

• Many of these buildings require major repairs and upgrades—think roofing, concrete work, and even modernizing elevators. All of these expenses get passed down to the condo owners, raising the monthly dues.

• Takeaway: As a buyer or investor, consider long-term affordability. If HOA fees keep climbing, your overall costs could outpace the value of the property.

3. Vacation Rentals Aren’t Paying Off

• A lot of people bought condos during the Florida real estate boom, planning to use them as vacation rentals. But here’s the problem: between high vacancies, rising fees, and competition, these properties aren’t cash-flowing like owners expected.

• In September 2023 alone, there were 245,000 vacant vacation rentals across the state—up from 133,000 in early 2021. Many new investors jumped in without running the numbers and are now scrambling to sell.

• Takeaway: If you’re thinking of using a condo for short-term rentals, make sure to calculate potential vacancy rates, HOA fees, and other costs before buying.

What Should Investors Do?

For savvy real estate investors, this condo glut could be an opportunity. But you need to play it smart. Here are two key conditions I’d want to see before considering a condo purchase in Florida:

1. Special assessments should be factored into the sales price – If you’re buying a condo, negotiate a lower price to account for these hefty assessments.

2. The insurance situation needs to improve – With rising homeowners insurance premiums, it’s tough to make the numbers work. Keep an eye on potential policy changes that could make investing more viable.

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Best,
Grant Warrington
Retired Early through Real Estate Investing, Now I live in Paradise, Explore it with me [YouTube Channel Link]