By Daily Mail (U.S.) | Created at 2024-11-20 13:23:55 | Updated at 2024-11-20 15:37:04
2 hours ago
Home sales in five major Florida cities have plummeted amid a snowballing real estate crisis in the southern state.
Natural disasters, rising homeowner's association (HOA) fees, increasing insurance costs and new condo regulations have come together to sap demand from a market that was booming just four years ago during the COVID-19 pandemic.
Fort Lauderdale, a city on Florida's east coast, saw pending sales drop 15.2 percent year over year during a four week period ending on November 10, according to a Redfin analysis.
The next worst cities were Miami and West Palm Beach, with yearly declines of about 14 percent each.
And rounding out the bottom five were Jacksonville and Tampa, which experienced drawdowns of 9.5 percent and 7.2 percent, respectively.
Nationwide, pending sales actually rose 4.7 percent over the same time period.
Florida real estate has been in a downward spiral for months, with some condo owners listing their properties for 40 percent cheaper than they're worth just to unload them.
A confluence of factors is causing this phenomenon.
Fort Lauderdale, pictured, had the starkest decline in pending home sales over the last year
Perhaps the most obvious is what turned out to be a record-breaking year of natural disasters.
'The recent hurricanes have been a major disruption in existing or pending sales, even for unaffected homes,' said Phil Crescenzo Jr., Vice President of the Southeast Division at Nation One Mortgage Corporation.
Three major hurricanes - Debby, Helene and Milton - tore through the Sunshine State this year, killing hundreds of people and destroying thousands of homes and businesses.
Florida native and former real estate agent Ro Barber told DailyMail.com that house, mortgage and insurance prices have rocketed up in response.
'We push out the middle class every time after a storm like this,' Barber said. 'It's not because of the storms that people move away - it's the real estate trends that come after... all of the rental prices go sky-high and people just get priced out.'
Many lifelong Floridians are contemplating moving out of state for the first time to avoid this boom-bust cycle the state experiences.
Out-of-staters appear just as hesitant to commit to Florida.
'First-time buyers are especially skittish,' said Lindsay Garcia, a Redfin real estate agent based in Fort Lauderdale. 'There’s still some demand for vacation homes, but in general, the market is very slow. Buyers have been grappling with persistently high housing costs and uncertainty around the election.'
Miami, Florida's second most populous city, saw the second biggest drop in pending home sales. West Palm Beach was close behind
Three major hurricanes - Debby, Helene and Milton - tore through the Sunshine State this year killing hundreds of people and destroying thousands of homes and businesses (Pictured: Homes in Port St. Lucie that were razed during Hurricane Milton)
Pictured: The aftermath of the collapse of a condo building in Surfside, Florida. The disaster prompted state lawmakers to more stringently regulate condos, which is having a devastating effect on the market
Condos are more vulnerable than any other market, because they're susceptible to natural disasters and new regulatory burdens to keep high-rises safe.
Florida's state government approved a new law cracking down on older condos after the Champlain Tower South in the Miami suburb of Surfside crumbled in 2021.
The disaster killed 98 people and left hundreds more without a home and all their belongings destroyed.
Now, all condo buildings 30 years old or older and three stories or taller are required to undergo an inspection by a qualified architect or engineer.
If 'substantial structural deterioration' is found, the condo owner will be on the hook for the repairs and need to come up with substantial amounts of cash to fix their property within a year.
Thousands of owners who remain are attempting to dodge the rapidly approaching December 31 deadline for these inspections by selling their properties.
Homeowner's associations are also jacking up their fees in order to pay for these new repairs, another reason why some are fleeing.
Garcia said many condos have sat on the market waiting to be snapped up for over a year.
Governor Ron DeSantis is at the forefront of state leaders seeking to ameliorate the condo crisis
Governor Ron DeSantis has pushed for the state legislature to address this glaring issue before the end of the year.
His idea to stop panic selling is to offer a low or no-interest loan program for those saddled with high repair costs.
The state legislature met Tuesday to prepare for the 2025 session, which begins on March 4.
The meeting is said to be mostly focused on procedural matters and then setting the legislative agenda for the next two years.
It's unclear whether lawmakers and DeSantis will hammer out a solution to the real estate meltdown before the end of the year.
