Residential broker Erin Sykes recently reduced the price on a condo she listed at the Regency of Palm Beach, a 60-year-old oceanfront building.
The 1,358-square-foot two-bedroom, two-bathroom condo at 2760 South Ocean Boulevard hit the market in 2023 for $849,000. Now, it’s asking $649,000, after a $70,000 price cut. Sykes said a special assessment was paid off, and concrete restoration on the building is nearly complete.
“We get a lot of showings, but it’s just a bunch of looky-loos,” Sykes said. “The condo market is extremely challenging in South Florida right now. The data is showing a 6 percent month-over-month reduction in condo sales, but in reality nothing is moving.”
The headlines are daunting: Residential sales are on the decline. The condo market is in crisis. Foreign buyers have fled the market.
Still, the ultra high-end market isn’t struggling. A mysterious finance executive is in contract to pay $110 million for a waterfront home lot in Indian Creek, marking one of the larger deals in the works in South Florida.
Thousands of condo units are also in the development pipeline, as domestic buyers have stepped in. Developers are bullish, even though preconstruction sales have slowed, brokers say.
So what’s going on with the housing market? A growing divide between old construction and new, and the widening affordability gap are hitting South Florida’s metro areas hard.
Post-Surfside environment
Earlier this month, Miami-Dade County Property Appraiser Tomas Regalado’s office released its estimates for taxable property values. Regalado stepped into the position last year, and changed how the office calculates taxable values, basing them primarily on closed sales, he told The Real Deal.
“I ended the policy of doing the values just by highest and best use,” Regalado said. “We determine values mostly by sales, and sales are slumping.”
While the estimated taxable value for real estate countywide reached $511.8 billion, for an annual increase of 8.5 percent, growth is slowing. And condo sales dragged down the market, experiencing a slight decline in taxable values (less than 1 percent, year-over-year). New construction of residential and commercial real estate helped boost those estimates, representing $8.2 billion of the $40.2 billion in taxable value added in the latest estimates.
Regalado said he focused on the condo market because Miami is the condo capital in the state. Prices and the number of sales are dropping for units in buildings constructed in the ‘60s, ‘70s, ‘80s and ‘90s.
“We still are seeing the consequences of Surfside,” he said, referring to the 2021 collapse of the Champlain Towers South condo building, which killed 98 people. After Surfside, the Florida Legislature passed laws that require condo and townhouse communities to comply with financial and structural mandates.
Many owners can’t afford to pay special assessments tied to the required repairs and maintenance.
By the numbers
The majority of condos on the market in South Florida are in buildings that are 30 years or older. As of Thursday, 25,051 condos are on the market in the tri-county region. Eighty-seven percent of those listings, or 21,940, are units that are 30 years or older, according to data from ISG World. Listings for properties that are under 30 years old total 3,111, or about 12 percent.
Craig Studnicky, CEO of ISG World, said on a panel last month that older condos are “just not selling.”
That’s in part because it’s difficult for buyers to secure mortgages for condos in buildings that don’t have sufficient financial reserves or are in need of repairs. The number of South Florida condo buildings on a Fannie Mae blacklist has more than doubled in the past two years.
For years, foreign buyers helped prop up the condo market, many of whom purchased units as investments. Though foreign buyers are still in the market, a large share have exited in recent years. This peaked in 2010, when foreign buyers accounted for 57 percent of home sales in Florida, according to the Florida Realtors. Between August 2023 and July 2024, international buyers accounted for just 3 percent of home sales in the state.
Inventory has also been growing across the tri-county region, according to data from the Miami Association of Realtors.
Sykes, who runs her own New Jersey-based brokerage, Sykes Properties, said she’s encouraging her clients to do “dramatic price reductions,” as activity slows even more during the summer. She said data lags what’s currently happening in the market, and that it’s skewed because it’s based on a smaller number of deals.
This is happening across South Florida.
Miami Association of Realtors’ most recent report available shows condo sales fell 21 percent to 1,005 closings in April, year-over-year, in Miami-Dade County. Single-family home sales decreased nearly 11 percent to 950.
In Broward, condo sales decreased 19.2 percent to 1,085 in April, year-over-year, and single-family home sales dropped 12 percent to 1,054l. And in Palm Beach County, single-family home sales fell 5.3 percent to 1,328, while condo sales dropped 14.4 percent to 998.
Even though single-family homes aren’t facing all the issues that condos are dealing with, sales have dropped, echoing the national housing market. High mortgage rates and overpriced homes are keeping buyers on the sidelines. Insurance and property taxes are also rising.
Still, the higher end of the market and newer inventory are performing better than older and less expensive properties. Ana Bozovic, a broker and market analyst, said that while inventory is up overall, single-family home listings below $500,000 are becoming extinct.
“Prime product continues to shine, as older stock slumps,” Bozovic said.
South Florida also has more cash buyers, making the idea of a “bubble popping” unlikely, she said. In the first quarter, 74 percent of $1 million-plus condo sales were all cash, according to her firm Analytics Miami’s report.
“We cannot have a bubble in a high all-cash market [because] bubbles pop when the underlying assets can no longer support the debt, and we do not have this setup,” Bozovic said. “Price growth can slow and can come off highs, which is healthy, but a crash in a heavy cash market is very unlikely.”
Regalado also doesn’t expect a housing market crash, but instead a “difficult market.”
He’s meeting with elected officials, including Florida House of Representatives Speaker Daniel Perez, Miami-Dade County Commission Chairman Anthony Rodriguez, to talk about property taxes and ways to alleviate the housing crisis.
“My call to them,” he said, “is we are no longer floating and swimming in money.”
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(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
