Palm Beach County’s condominium and townhome market limped through 2024 still suffering aftershocks from the Surfside tragedy and facing higher insurance costs that led to the lowest number of deals closing in at least a decade.

The total dollar volume of sales for existing units plummeted by $1 billion last year compared to 2023 with properties sitting idle 53% longer and a spike in new listings that squarely gave the upper hand to buyers.

But buyers have been wary of extra costs that can come with a condominium following the 2021 collapse of Champlain Towers South — a stigma that has permeated the coastal South Florida market, Realtors said. With new laws requiring safety inspections, repairs, and adequate reserve funding, buyers are asking more questions and aren’t always liking the answers. “The public perception is that ownership of a condo is a risk,” said Jonathan Lickstein, president of the Broward, Palm Beaches, and St. Lucie Realtors Group. “This is all so new to the marketplace. Putting a focus on transparency is a big part of how we move forward.”

 

The Realtors Group, which issues the monthly and annual sales reports, combines condominiums and townhomes into one category that is separate from single-family home sales.

 

According to the group’s year-end report, 9,948 condos and townhomes sold in 2024, a 17% drop from the previous year. It was a whopping 80% decline from the pandemic-boom year of 2021.

And while the number of existing single-family homes that sold last year also slipped, the amount of inventory in the single-family market still gave sellers a slight upper hand.

Not so with condominiums and townhomes where the year ended with an average supply of 8.8 months, nearly double 2023's average.

Realtors consider a supply of 5.5 to 6 months a balanced market where neither the buyer or seller have the advantage.

“With the older buildings, we’re seeing steeper price reductions and things sitting on the market longer,” said Christian Prakas, the founding broker of the Serhant office in Delray Beach. “The certifications, assessments and insurance, are just killing the older buildings.”

Prakas said one of his agents listed a condominium in Highland Beach at $1.4 million with sellers who refused to budge on price. After sitting on the market for several months with little interest, they were finally willing to drop the price by $200,000.

“Buyers know what they are getting into, and they know they are going to get something at a discount,” Prakas said.

Brian Mahoney, a sales associate with Corcoran Palm Beach, listed a North Flagler Drive condominium that was on and off the market for more than a year starting at a listing price of $650,000. After dropping the price five times, it’s finally under contract for near the asking price of $599,000.

“You have to take a look at the number of showings and offers and listen to what the market is telling you,” said Mahoney, noting that condos already undergoing required repairs can be a challenge to sell. "When its noisy and its dusty and the elevators are down, it's very difficult."

According to the online real estate brokerage Redfin, the number of West Palm Beach condo sellers who dropped prices in December increased 32% from December 2023. In Jupiter, there was a 95% increase in listings that dropped their prices. Boca Raton saw an increase of 119%.

Still, the median sales price of a condominium or townhome in Palm Beach County increased 3% to $320,000 last year compared to 2023. Lickstein said that’s possibly because newer condos are getting heftier price tags, offsetting low-end sales.

“Buyers are still looking for condos but they are also looking for ones that have their milestone inspections complete and that have completely funded their reserves,” said Ashley Barbaree-Nicol, a Realtor with Team Nikol at Sutter and Nugent in Jupiter.

State law requires that residential buildings 30 years or older and with three or more stories get an initial milestone inspection. Those were due Dec. 31. But according to Palm Beach County, nearly one in five condo buildings in the county covered by the law have failed to submit the reports.

“That does have a demand impact. It probably affected the number of buyers willing to pull the trigger,” said Brad O’Connor, chief economist for Florida Realtors.

Mortgage interest rates also impacted deals with potential sellers unwilling to give up their rock-bottom rates, and buyers hesitant to sign a contract with a rate that hovered between 6% and 7% over the past year.

Statewide, condo and townhome sales were the lowest they’ve been since 2010. Most of the hits came in coastal areas, including on the Gulf Coast, while areas around the I-4 corridor and Orlando saw an increase in sales.

The number listings was up 11.3% statewide last year from 2023. That’s not much higher than the 9.5% increase in single-family home listings, which is a signal that owners aren't frantic to sell, O'Connor said.

“This suggests that the narrative of panicked condo owners across the state scrambling to sell in the face of the new state mandated reserve requirements has been a bit overblown,” O’Connor said in a video about the year-end report.

O'Connor said he doesn't "see many scenarios" where condo sales drop from their current level.

"We've taken a lot of the medicine already," he said.

More than 16,000 condominium associations representing about 900,000 of Florida’s 1.5 million condo units are affected by the new state laws, according to Bill Hughes, research director at the University of Florida’s Bergstrom Real Estate Center.

“This suggests that the narrative of panicked condo owners across the state scrambling to sell in the face of the new state mandated reserve requirements has been a bit overblown,” O’Connor said in a video about the year-end report.

O'Connor said he doesn't "see many scenarios" where condo sales drop from their current level.

"We've taken a lot of the medicine already," he said.

More than 16,000 condominium associations representing about 900,000 of Florida’s 1.5 million condo units are affected by the new state laws, according to Bill Hughes, research director at the University of Florida’s Bergstrom Real Estate Center.

He said the laws represent the true cost of living near the ocean.

“Properties that have been sufficiently maintained and hold adequate reserves for future structural repairs will face nothing but an increased disclosure of inspection reports and continued reserve funding,” he said in an October column published in the journal The Conversation.

And while older condominiums muddle through the added requirements, Prakas said he is showing more new and pricier condominiums to prospective buyers. Sales of new condominiums aren’t reflected in the Realtors Group report.

He has a client looking at luxury buildings in West Palm Beach including Forté, Mr. C’s and La Clara.

“It’s two totally separate worlds,” Prakas said. “If you want new development, you are going to pay up, if you are OK with an older building, you hold the cards and get the pick of the litter.”