Sales of condos in Florida have plummeted in January even as prices fall amid high costs of home insurance, according to real estate platform Redfin.
Owners are looking to offload these properties as evidenced by a jump in listings. But the homes are proving difficult to sell, with insurance costs skyrocketing in Florida, making buyers more reluctant to invest in condos in the Sunshine State.
Some of the major metros are seeing a plunge in the sale of homes. Jacksonville, for example, saw the median sale price fall by 6.5 percent compared to a year ago, as the number of sales took a nose-dive by more than 27 percent.
Miami, meanwhile, saw the median sale price year-over-year slide in January by 2.5 percent amid sales declines of nearly 9 percent. Some parts of the state like Cape Coral and North Port are statistically doing well, as they started at a low base after being hit by Hurricane Ian, Redfin pointed out.
The Florida market is underperforming compared to the national market, in which condo prices are accelerating and sales are performing at a higher rate, according to Redfin.
Part of the reason that the housing market is struggling in Florida is due to the high costs of home insurance, which have soared over the last year amid increased weather disruptions that have also played a role in some companies’ decisions to leave the state entirely. State residents are having to pay some of the highest insurance premiums in the country, Newsweek has reported. In 2023, Floridians paid 42 percent more in home insurance compared to the year before.
Real estate agents say that condo owners are seeing their monthly maintenance fees soar.
“Condo costs are shocking,” Juan Castro, a Redfin Premier agent in Orlando, said in a statement. “Condos that used to have a $400 monthly maintenance fee may now have a $700 fee. It’s causing buyers to rethink their plans.”
Redfin says that because mortgage lenders analyze whether prospective condo buyers can afford monthly homeowners association (HOA) fees, the increases have added an obstacle for prospective buyers seeking a mortgage. This has also hindered demand.
Buyers are turning to single-family homes and eschewing condos as a result. In Miami, for instance, the average cost of single-family units has risen, while sales have also jumped 9 percent and listings are up 13 percent, Redfin data shows.
“Condos are sitting on the market much longer than they used to, with less interest from buyers,” Jacksonville Redfin Premier agent Heather Kruayai said in a statement. “Sky-high HOA costs are pushing buyers out of their monthly budget.”