Cost of owning condos in Florida soaring

(The Center Square) – With rising insurance costs and homeowner association fees, the cost of owning a condominium in Florida has gone through the roof over the last several years, Mark Friedlander, corporate communications director of the nonprofit Insurance Information Institute told The Center Square.

“Going back to June 2021, when we had the tragic Surfside condominium collapse, that started the downward spiral of the condo insurance market,” Friedlander said. “Condo living in Florida has become extremely expensive over the last three years.”

Master insurance policies for condo associations jumped in price after the Surfside collapse, he said. Those premiums are typically paid by individual condo owners through homeowner association fees.

Master condo policies in Florida have increased from 100% to 500%, Friedlander said.

“That has obviously weighed very heavily on the owners of the individual units,” he said.

There are new state guidelines on the amount of cash reserves that condo associations must have, Friedlander said.

“Condo owners not only have to pay for the insurance, but they have to pay into the capital reserves of the association,” he said.

The insurance for individual condo units that covers the area within the condo walls, has also increased, said Friedlander.

The increases “are pricing a lot of people out of the market,” he said.

According to a report by the real estate company Redfin, the soaring costs are causing condo prices and sales to drop in Florida and sales to drop in major cities, bucking a national trend of higher condo prices.

“In the Jacksonville metro, for instance, the median condo price declined roughly 7% year over year in January, sales declined 27%, and new listings increased 32%,” Redfin says. “The story is similar in Miami, where condo prices fell 3%, sales dropped 9% and new listings rose 27%.”

The story is not the same for single-family homes in Florida, Redfin said. In Miami, for example, the median sale price of single-family homes “increased by double digits from a year earlier in January, sales rose 9% and new listings increased 13%,” Redfin said.

There have been some improvements recently in the Florida condo insurance market which could help, Friedlander said.

He cited tort reform legislation passed by the Florida Legislature in 2023 placing new limits on lawsuits against insurers.

“It is improving slowly,” Friedlander said. “But Florida is a very litigious environment, even with new laws in place.”