Condominium prices kept falling and the number of units for sale kept climbing in South Florida in October.
Meanwhile, single family home prices continued marching higher.
The regional condo market continues experiencing the effects of new inspection and financial regulations passed by state lawmakers in wake of the collapse of the Champlain South Tower in Surfside that killed 98 people.
New laws require condo buildings at least three stories tall and 30 years old to be inspected for structural integrity by the end of this year. Condo associations will have to begin setting aside money by 2025 to maintain key systems such as electrical, plumbing and windows.
The requirements have led to older condo buildings to raise monthly assessments and level special fees to owners. The additional costs have led to an increasing number of older condos for sale.
READ MORE: How condo reform laws sent monthly assessments for condo owners through the roof
Despite a pledge from Gov. Ron DeSantis to provide some relief before the end of the year for owners of older condos, the new Republican legislative leaders have said revisiting the reforms should wait until the regular law-writing session, which begins in March.
Higher mortgage rates have likely had a much smaller impact on slowing condo sales thanks to the high number of closed deals in cash in South Florida. Mortgage rates climbed throughout October, rising from around 6% to 6.7% for a fixed 30-year mortgage, according to data from Freddie Mac.
The pace of condo sales fell by double digits across Miami-Dade, Broward and Palm Beach counties. It was the third month in a row of such a decline compared to a year ago. Monthly statistics from the Miami Association of Realtors shows the number of condos sold each month has fallen for most of the past year.
Slowing condo sales
The drop in sales activity for South Florida condos comes as more units are for sale and median prices have fallen. Almost 11,000 condominium units were listed for sale in Miami-Dade County last month. There were about 10,000 condos looking for buyers in Broward County and almost 7,000 in Palm Beach County. The inventory has increased steadily over the past year as deadlines approach for older properties to comply with the reforms approved after the Surfside tragedy.
A larger selection has contributed to slightly lower prices. The median price of $415,000 in Miami-Dade and $280,000 in Broward County returns prices to levels last seen early in 2024. The median price last month of a condo sold in Palm Beach County of $305,000 is the lowest of the year.
Condo prices and supply
The realtors association pointed out that, despite the continued increase in the supply of condos for sale, inventories remain below pre-pandemic levels in Miami-Dade and below what it called “historical levels” in Broward and Palm Beach counties.
There are more single family homes for sale, too, compared to a year ago. Still, the number of homes for sale in October represented a five-month supply, indicating sellers have the upper hand thanks to fewer homes to compete with on price. A balanced market between buyers and sellers is thought to be between six and nine months supply of homes for sale.
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There is some strength to be found in the regional condo market. Units costing at least $1 million or below $150,000 have been selling well. The sale of seven-figure condos in Miami-Dade were up 3.5% in October. Sales of units under $150,000 jumped more than 36% compared to a year earlier.
Both trends speak to the affordability challenge that has gripped South Florida’s housing market for years. The median household income in South Florida was $76,000 in 2023, according to Census Bureau data. That ranked 22nd out of the top 25 metropolitan areas in the U.S. Someone earning that income would be able to afford to buy a home for about $260,000 assuming a standard down payment and no other debts.
