In Florida, condo owners are now facing two ugly realities: Soaring homeowners association fees and falling property values.
Condo fees are skyrocketing in the Sunshine State, making it more difficult for owners to meet their monthly obligations.
In four cities, fees were up more than 10% year over year as of July, according to a recent report from real estate brokerage firm Redfin.
They are:
- Tampa: 17.2%
- Orlando: 16.7%
- Fort Lauderdale: 16.2%
- West Palm Beach: 12.8%
Homeowners association fees — often known as “HOA fees” — are charges that most condo owners pay on a monthly basis. The money from these fees is earmarked for upkeep and maintenance of a condo community as well as other costs.
In a press release, Rafael Corrales, a Redfin Premier agent in Miami, said many condo owners are feeling the pinch of the higher fees:
“Many buildings — even those without amenities — now have HOA dues north of $1,000 a month. And with special assessments getting tacked on, a lot of condo owners who are retired and/or on a fixed income are being forced to sell and relocate because they can’t keep up with the payments.”
The soaring cost of HOA fees in Florida is a result of a trio of factors, according to Redfin.
For starters, new condo regulations went into effect this year that require HOAs to monitor the safety of condo buildings and perform any needed maintenance and repairs. That often means collecting more cash from condo owners.
The new rules were a response to the well-publicized 2021 collapse of a 12-story condominium building in the town of Surfside, Florida, which killed 98 people.
While the rules are intended to save lives, they are ruining the finances of some owners of condo units in old complexes. The Wall Street Journal reported earlier this year that condo boards in older complexes are saddling owners with large special assessments to help pay for renovations that bring the buildings in line with the new rules.
In addition, skyrocketing homeowners insurance premiums are forcing condo communities to raise HOA fees to cover those costs.
Finally, the inflation that has dogged the U.S. economy for several years is also contributing to higher HOA fees.
As HOA fees climb, condo prices are beginning to dip in many Florida markets. In July, condo prices were down year over year in Jacksonville (6.6%), Tampa (4.9%), Fort Lauderdale (4.2%), Miami (2.2%) and Orlando (0.5%).
Although the problem of rising HOA fees is particularly bad in Florida, Redfin says cities such as Seattle and Denver are also seeing condo fees rise sharply.
The problem is becoming so bad in some places that some condo owners are struggling to sell their units because lenders might not approve of the homeowners association, according to Redfin.
Add a Comment