Sales of glamorous Miami condos are slowing this summer, forcing owners to slash prices.
The median sale price of a condo in the metro area fell to $420,000 in June, down 6 per cent from this year’s peak of $445,000 in March.
According to a report from the agency, the value of condos today is about the same as a year ago. Miami Association of Realtors.
But single-family homes in the county continue their astonishing 12 1/2-year streak of appreciation. Prices have increased at an annual rate of 5.5 percent, from $622,500 to $657,000.
The difference between condos and regular homes is that Miami condos are often located in sleek skyscrapers that have redefined the city’s coastline over the years.
But following The Deadly Surfside Condo Collapse of 2021, Florida Lawmakers have passed a law that requires buildings over 30 years old with three or more stories to undergo major structural assessments to obtain recertification.
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Florida condo associations are also required to keep a certain amount of money on hand to cover repairs, something many did not do before the Surfside disaster. The Miami Herald reported.
As buildings age, people looking to purchase an apartment or condo in an older building may see the costs passed on to them in the form of higher association fees.
Condominium expert Peter Zalewski said older Miami-Dade condos essentially need “open heart surgery.”
“When you’re evaluating a condo, you have to consider when it was built. Anything before 2000 is in a vicious circle. Anything between 2000 and 2010 has a resistance force. They have high cholesterol. They’re overweight. But it’s manageable. Anything after 2010 is healthy,” he told the Herald.
Zalewski, founder of real estate consultancy Condo Vultures, added that all the market turbulence has caused many buyers to hesitate before diving headfirst into Miami real estate.
Buyers are well aware of the potential for high association fees due to mandatory repair reserve funds, but this issue simply doesn’t affect single-family homes, fueling their continued rise.
Additionally, Miami-Dade’s single-family home inventory (four months) is much lower than that of condos (8.9 months), making it much easier to continue to raise prices for these homes while supply remains limited.
As real estate agents sell homes like hotcakes in Miami-Dade, sellers looking to offload their condos continue to drop prices.
Experts say condo prices will continue to fall in the coming months.
Jack McCabe, owner of real estate and economic research firm Jack McCabe Expert Services, said that by next year, discussions will be dominated by the extent of the price decline.
Zalewski offered advice to buyers in this tight South Florida condominium market.
“If you are a buyer, why would you intervene when the meteorite hits the earth?” he said. “Expect prices to go down.”
It comes as A major correction in home prices in the southern United States could be imminent.
