A wave of financial strain is sweeping through Florida’s condominium market, pushing owners to the breaking point and flooding the area with for-sale signs.

Skyrocketing insurance premiums, unexpected repair assessments and restrictive lending practices have turned the dream of coastal living into a costly burden for many, particularly in older buildings, according to the Wall Street Journal. As prices slide and sales stall, the state’s once-booming condo sector faces a deepening crisis.

Rob and Karen Dickson, retirees who relocated from upstate New York to a gated Punta Gorda community in 2021, embody the struggle. But the idyll didn’t last. Within two years, a hurricane doubled their insurance costs, and a $7,200 special assessment for building upgrades hit, partially offset by $2,000 from insurance. Monthly homeowners’ association fees jumped 25% to nearly $800, then climbed to $1,000. Unable to keep up and missing their grandchildren, they listed the condo last summer, competing against 43 other units in their community. They accepted an offer $20,000 below asking and returned to New York. “Florida is actually paradise,” Rob said. “It was superb, but things changed.” The Dicksons’ story is far from unique. Across Florida, condo ownership costs have surged, driven by a trifecta of rising insurance rates, mandatory repair assessments and scarce financing options.

Florida’s condo market is in crisis as skyrocketing ownership costs, driven by doubled insurance rates, hefty special assessments, and soaring HOA fees, have pushed many owners to sell.

 

The fallout has triggered a sell-off, depressing prices and overwhelming the market. While South Florida’s newer condos continue to appreciate — Miami-Dade County saw an 8% median price increase in February from a year earlier, fueled by corporate relocations — older properties are in free fall.

Statewide, condo prices have declined 1% to 6% annually each month since July 2024, with a 3% drop in February, according to Florida Realtors.

 

Buildings over 30 years old have seen values plummet 22% in the past two years, per ISG World, a South Florida real-estate firm, while newer condos have gained 12% over the past decade. The collapse in older condo values stems largely from stringent new regulations enacted after the 2021 Surfside condo collapse that killed 98 people. These rules, requiring structural inspections and reserve funds for repairs, had a compliance deadline of December 2024. Yet, fewer than 25% of Florida’s condo associations have reported meeting the standards, according to the Department of Business and Professional Regulation. With Florida housing 20% of US condos — over half of which are at least 30 years old, per the UF Bergstrom Center for Real Estate Studies — the regulatory burden is reshaping the market. “If these buildings are subject to reserve requirements, buyers want to make sure they’re getting into a situation where the condos have their act together,” Brad O’Connor, chief economist at Florida Realtors, told the Journal. “Whether it’s the lenders or the buyers themselves, we’ve seen a slowdown in condo demands.”

After enjoying their Punta Gorda condo purchased for $319,000 in 2021, the couple faced a $7,200 assessment and HOA fees rising to $1,000 monthly, forcing them to sell at a loss and leave Florida.

 

Financing woes are compounding the problem. Lenders are increasingly wary of condos, particularly those undergoing structural repairs.

“They won’t want to finance anything until the repairs are done,” Anibal Torres, a mortgage lender with CMG Financial, added.

More than 1,400 Florida condos are on Fannie Mae’s “blacklist,” flagged for insufficient insurance or critical repair needs, making mortgages nearly impossible to secure. Florida leads the nation in blacklisted condos, further chilling sales.

 

Jake Harrington, president of a 17-year-old condo board in Boynton Beach, is grappling with the consequences. His building’s $7 million facade renovation, averaging $15,000 per unit, was meant to enhance value.

Instead, a clerical error on a form — suggesting the property partly functioned as a hotel — landed it on Fannie Mae’s blacklist, derailing sales.

“This is going to be a beautiful property restored beyond its original state after we get off this project, except we’re on the blacklist for a typo,” Harrington told the Journal. “It’s just frustrating.”

The crisis has caught the attention of state leaders. At a Miami community center, Gov. Ron DeSantis acknowledged the market’s distress.

“We’ve got a problem with our condo market right now,” he said. “We have a problem that was introduced by legislation that was passed in recent years.” While he signaled potential relief, no concrete measures have emerged.