Florida Condo Crisis: What Buyers and Sellers Must Know
Florida Condo Crisis: What Buyers and Sellers Must Know
Based on materials from the New York Post, this article explores the growing crisis in Florida’s condominium market, where stricter safety regulations and soaring insurance costs have led to a mass sell-off of older condos. Prices have dropped by up to 22% over the past two years, and buyers must navigate financing challenges due to over 1,400 properties being placed on Fannie Mae’s “blacklist.”
A Rapidly Shifting Landscape
Florida’s once-flourishing condominium market is now grappling with a major crisis. In recent years, a combination of new, stringent safety regulations and skyrocketing insurance costs has triggered a wave of selling among owners of older condos. Over just two years, property values in some areas have plunged by as much as 22%, dramatically altering the real estate landscape. Additionally, more than 1,400 buildings have been placed on Fannie Mae’s “blacklist,” making it exceedingly difficult for potential buyers to secure traditional mortgage financing. In this evolving environment, buyers and sellers alike must be more informed and strategic than ever before.
New Safety Regulations Reshape the Market
The collapse of the Champlain Towers South in Surfside, Florida, in 2021 was a pivotal moment that exposed serious flaws in building safety oversight. In response, Florida legislators enacted tough new laws mandating frequent inspections and mandatory repairs for aging condominium buildings, especially those located within three miles of the coastline. Buildings older than 30 years must now undergo expensive structural evaluations and, if necessary, undergo costly renovations to remain habitable. For many condo associations, these upgrades represent millions of dollars in unforeseen expenses, forcing special assessments on owners. Monthly dues in some communities have doubled or even tripled, pushing many residents — particularly retirees and middle-income families — to list their properties for sale at reduced prices.
Insurance Costs Reach Unprecedented Highs
On top of new safety requirements, condo owners and associations are being squeezed by soaring insurance costs. Many insurance companies, wary of potential disaster-related claims, have either sharply increased premiums or left the Florida market altogether. As a result, some associations have reported premium hikes of 200% to 300% within a single year. In extreme cases, buildings have been unable to secure full coverage, leaving unit owners exposed to significant risks. Without adequate insurance, mortgage lenders typically refuse to underwrite loans for those properties, limiting the pool of potential buyers to cash investors or those willing to pay inflated financing rates. This insurance crisis has further destabilized the market, deepening the cycle of falling property values and sluggish sales.
The Impact of Fannie Mae’s “Blacklist”
Perhaps the most formidable challenge for today’s condo buyers in Florida is navigating the growing list of blacklisted properties. Fannie Mae and Freddie Mac have flagged over 1,400 condominium developments as structurally unsound or financially risky, effectively cutting them off from the conventional mortgage market. Without access to traditional loans, buyers are often forced to seek high-interest, private financing options or make all-cash offers — both of which significantly reduce the pool of qualified buyers. This financing bottleneck is causing an even sharper decline in property prices for affected buildings. Sellers whose condos are in blacklisted developments must either accept deeply discounted offers or invest heavily in repairs to bring their properties back into compliance — both challenging prospects in today’s economy.
Risks and Opportunities for Buyers and Sellers
While the situation poses serious risks, there are also opportunities for savvy buyers and sellers. Buyers who have the ability to purchase in cash may find unprecedented bargains on the market, particularly in older coastal communities. However, caution is essential: before committing, buyers must thoroughly review a building’s inspection reports, reserve funding status, insurance policies, and any scheduled assessments. Hidden repair obligations can quickly turn a “good deal” into a financial burden. For sellers, the road ahead is no less complex. To attract buyers, many will need to price units competitively, offer concessions such as covering part of closing costs, or even provide private financing options. In some cases, investing in necessary repairs to improve a building’s financial health and remove it from the blacklist may be the only viable path to a successful sale.
Conclusion: Navigating a Complex Future
Florida’s condominium market is undergoing a painful but necessary transformation. The new regulations and rising insurance costs are intended to protect residents and prevent future tragedies, but they have also triggered a financial squeeze that few owners or buyers anticipated. Moving forward, anyone involved in buying or selling a condo in Florida must approach the market with caution, armed with detailed knowledge and professional guidance. Those who adapt to the new reality — prioritizing safety, transparency, and financial stability — will be best positioned to succeed in a landscape that is still evolving and will likely remain volatile for years to come.
Ralph Schiavone
HLS Group, Inc.
1611 Pomona Road, suite 207 Corona, CA 92878
Email: rschiavone@hlsgroupinc.com
Phone: (714) 315-0027
HLS Group, Inc.; Ralph Schiavone-Broker and President is your full-service real estate agency; specializing in all aspects of residential real estate purchase, sale with over 30-years’ experience and extensive knowledge and understanding of real estate finance. We are Certified Probate Real Estate Specialists, short-sale experts, REO-agent certified and fully MLS compliant. HLS Group, Inc. and Ralph Schiavone offer a one-stop opportunity for prospective buyers and sellers to gain information about the purchase/sale process from identifying a property for purchase to placing a property for sale. We negotiate with confidence on
behalf of our clients and work seemlessly with finance professionals during the purchase/sale process.
The markets of Southern California are uniquely dynamic with many opportunities to both purchase or sell a home. The biggest keys to success are patience and appropriate market position. Know your market and how you fit within it. That’s where using Ralph Schiavone and the agents at HLS Group, Inc. will serve you best, by providing you the tools for informed decision-making.
Currently inventory is somewhat tight and communication is key to ensuring timely property opportunities. We at HLS Group, Inc. pride ourselves on strong and comprehensive communication: from the initial interview through close of escrow and thereafter. At HLS Group, Inc. a successful transaction is defined as facilitating the client’s property desire, in the area/neighborhood they wish to live, while using the most appropriate financing strategy, for the best outcome possible.
Customer service is key at HLS Group, Inc. Our relationship and support do not end once your purchase/sale is completed. We’ve built our reputation as a reliable resource in our community and are available for you in the future whenever you feel we can be of service. We look forward to working with you.
The markets of Southern California are uniquely dynamic with many opportunities to both purchase or sell a home. The biggest keys to success are patience and appropriate market position. Know your market and how you fit within it. That’s where using Ralph Schiavone and the agents at HLS Group, Inc. will serve you best, by providing you the tools for informed decision-making.
Currently inventory is somewhat tight and communication is key to ensuring timely property opportunities. We at HLS Group, Inc. pride ourselves on strong and comprehensive communication: from the initial interview through close of escrow and thereafter. At HLS Group, Inc. a successful transaction is defined as facilitating the client’s property desire, in the area/neighborhood they wish to live, while using the most appropriate financing strategy, for the best outcome possible.
Customer service is key at HLS Group, Inc. Our relationship and support do not end once your purchase/sale is completed. We’ve built our reputation as a reliable resource in our community and are available for you in the future whenever you feel we can be of service. We look forward to working with you.
