by Mike Colpitts In the summer of 2021 in the Town of Surfside, Florida the Champlain Towers Condominium collapsed, killing 98 people. The building residents had been reporting problems for years. The 12-story condominium structure had 136 units, 55 of which were involved in the collapse. It was the most significant building failure in Florida history, and it produced a massive condo crash in South West Florida.
The restructuring of the Florida condominium industry has forced associations to raise their fees, more than doubling in most associations throughout the state. Florida laws have been upgraded requiring stricter safety standards, and more frequent inspections.
Older buildings have sometimes been forced to make improvements to make up for decades of deficiencies in building codes. The crash in South-West Florida has gotten few headlines aside from a local news report from time to time.
Larger reserve requirements have also forced many lower income owners to sell their units as condo fees and assessments rose. The collapse of Champlain Towers has forced many owners into litigation but many more have chosen to sell their units to get what they can for their units in an unprecedented condo crash.
Some older buildings are particularly hard hit. The Cricket Club’s condo board on Florida’s east coast proposed $30 million in special assessments for repairs, including new roofing and siding for more modern waterproofing. Under the proposal the cost will top $134,000 a unit.
Many owners, like Ivan Rodriguez, who liquidated his 401k retirement account to buy his condo, cannot afford the higher fees so he put his unit up for sale. The Wall Street Journal has reported that the inventory of condos listed for sale in South Florida has more than doubled since early in 2023.
Higher hurricane, wind and fire insurance policies add fire to the influenza of events staggering the condo market. In Fort Myers and the surrounding area the glut of condos listed for sale on the market make it a field day for investors equipped to handle the long term impact.
Prices on condos that are selling are going for less than what other similar units have sold for in previous months. A series of issues need to be considered with each purchase before making an offer on a property.
The crash of South Florida’s condo market is expected to last a number of years. Sellers are finding few takers and those who are making purchases are getting some of the best deals in years.
Rodriguez listed his unit for $350,000 but was forced to keep marking it down until finally selling it for just $110,000. Others are taking similar mark downs in the condo crash in South West Florida.
Still, new condo developments are being built with more toughly legislated restrictions, building codes and safety measures to protect the mostly large developments from major hurricanes and other disasters that Florida experiences from time to time.