Chilling prediction about Florida's condo crisis - the 5 crucial factors for the next 3 months
Florida's condo market is facing a full-blown crisis, Miami real estate insiders have told Daily Mail.
In an exclusive interview, Joe Brikman, Team Leader at The Modern Day Team, and Luxury Development Specialist Rebecca Fischer explained the reality facing both buyers and sellers in what they describe as a 'cautiously optimistic' but quickly changing market.
The top realtors are predicting major instability in the next three months as buyers are urged to avoid rushing into bad deals.
'The biggest piece of advice I'd give is: don't rush,' said Brikman. 'The deals are out there, but you need to do your homework.'
'Make sure you're working with an agent who understands what to look for especially when it comes to building financials, reserves, and upcoming assessments,' he said. 'It's not just about the unit, it's about the health of the entire building.'
The duo outlined five crucial factors every potential Miami condo buyer must consider, starting with building reserves which are more critical than ever before, especially after the devastating 2021 collapse of condo building Champlain Towers South in Surfside.
Looking ahead, the experts predict a continuously emerging market over the next six months with a major clash between old and new buildings. File picture of Collins Avenue, Caribbean South Beach Condominium
These are the crucial factors Miami condo buyers should watch out for right now:
1. Building reserves
Make sure the building has strong reserves in place. It's more crucial than ever under new state laws.
2. Assessments
Ask if there are any current or upcoming special assessments. These can cost owners thousands and often come as a surprise after closing.
3. Inspection and recertification
Confirm that the building has passed its required 40-year (or 30-year in some counties) safety inspection.
4. HOA fees
Take a close look at monthly HOA fees and what they include. Many buildings have raised dues significantly to meet legal requirements.
5. Insurance costs
Premiums across Florida are skyrocketing. Buyers should factor rising insurance rates into their long-term budgeting
The 2021 collapse of a condo building in Surfside led to a new law that requires condo buildings to undergo structural inspections and shore up reserves
Looking ahead, the experts predict a continuously emerging market over the next six months with a major clash between old and new buildings.
He said savvy buyers, who have done their research, will come out on top.
'Over the next 3 months, I think we'll keep seeing price adjustments, especially in older buildings that haven't addressed reserve requirements,' Brikman said.
'In six months, the buyers who've done their research and bought smart will be sitting in a great position,' he predicted.
'I think newer buildings and those with clean financials will stay strong, while others may continue to struggle.'
Still, the market disruption has created some jaw-dropping opportunities.
The Modern Day Team currently has a $350,000 four-bedroom penthouse in North Miami Beach, a $750,000 two-bedroom penthouse in Brickell, and a two-bedroom waterfront apartment in Miami Beach hitting the market soon.
There are still areas with opportunity for buyers.
Edgewater, parts of Downtown, Brickell, and North Miami Beach are emerging as value hotspots, particularly for new construction buildings.
'On the Resale We're seeing sellers get more flexible some are offering to cover closing costs, buy down interest rates, or even cover a few months of HOA fees,' he revealed. 'Cash buyers especially have more room to negotiate.'
When asked to sum up this year's market in two words, the response was telling: 'Cautiously optimistic'.
'Buyers are still active, but they're more careful and they should be,' Fischer noted.
'It's a different kind of market than it was a year ago.'
The 2021 collapse of a condo building in Surfside led to a new law that requires condo buildings to undergo structural inspections and shore up reserves.
This has meant that many HOAs have been hiking fees and doling out hefty special assessments to comply with the new rules, which has reduced demand for condos.
The Surfside condo collapse saw 98 die in the tragedy.
There are now new plans for a $15million-per-unit apartment block on the site dubbed The Delmore.
The ultra-luxury high-rise is being constructed by Dubai-based developer Damac Properties after it purchased the land for $120million less than one year after the collapse on June 24, 2021.
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