Condo owners and buyers in Florida are currently facing a variety of powerful challenges, Mortgage Professional America reported recently — or, as realtor Alexei Morgado told the publication, "The condo market is in the midst of a perfect storm."
Among the crises cited by MPA are rising homeowners' insurance costs, declining home values, stricter lending policies, and reduced buyer confidence, with the real estate market increasingly jeopardized as the changing climate affects the Sunshine State.
What's happening?
Industry data recorded a 9.2% decline in townhouse and condo sales in Florida in the first quarter of 2025, compared to the same time the previous year, per MPA. New pending sales have fallen 13% while active property listings rose by 35%.
These numbers indicate that more condo homeowners are quickly pulling out of Florida's real estate market by trying to sell, while buyers face poorer loan terms.
This rapid shift in Florida's condo market is partly due to the unfortunate Surfside condominium disaster in 2021, in which a large part of the 12-story condominium building in the Miami suburbs collapsed.
This incident resulted in 98 casualties, prompting a thorough investigation into the root causes, and — as MPA and others have detailed — led to new condominium safety laws that require condo owners to conduct and pass structural inspections and to set aside enough money to cover major repairs.
According to the state's Department of Business and Professional Regulation, as cited by MPA, less than a quarter of the condo associations met these standards, indicating a high-risk market to invest in. When they fail to meet these standards, the properties don't qualify for standard loans, forcing prospective condo buyers to seek alternative loan options with less favorable rates and terms.
To top it all off, homeowners in Florida are experiencing rising homeowner insurance and homeowner association costs due to increased climate risk, making homeownership in the state even less affordable.
Why is rising homeowner insurance important?
Real estate properties in Florida have become high-risk due to rising sea levels, wildfires, and extreme weather threats amplified by human-induced temperature increases. This has caused insurers to exit the condo market or considerably raise insurance premiums, leaving condo owners with two choices: pay up or leave.
Homeowners in Nebraska, Utah, Arizona, Illinois, and Colorado similarly experienced steep insurance hikes following more extreme weather in their states.
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Definitely 🙁 As natural disaster events become more frequent and intense due to rising global temperatures, caused by burning dirty fuels, the Florida condo market may fight a losing battle.
What can I do about rising homeowner insurance?
While homeowners have no real control over increased insurance costs, you can take proactive steps to potentially reduce your homeowner insurance.
You can conduct and pass structural tests on your condominium, ensuring your property is safe to live in. Owners can also set aside enough money in reserves, in case the property needs repairing.
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