Inland Florida tends to have newer condos, which haven’t yet had to comply with new rules that have driven up HOA fees elsewhere in the state. It also has less natural-disaster risk and lower insurance costs.
Redfin Reports Florida Condo Prices Are Holding Up Best Away From the Coast
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(NASDAQ: RDFN) — The median condo sale price in Inland Florida rose 5.4% year over year on average in January, compared with a 4.8% decrease on Florida’s Gulf Coast and a 3% drop on the Atlantic Coast, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Inland Florida’s condo prices rose even more than its single-family home prices, which climbed 3.7%.
This is based on a Redfin analysis of MLS data in Florida metro areas where condos make up at least 5% of housing stock. A list of all included metros can be found in the report.
“Insurance is much cheaper inland than on the coast, which leads to lower HOA fees and more affordable monthly payments for condo owners,” said Christopher Maggart, a Redfin sales manager covering Orlando. “Condo buildings in central Florida also tend to be newer and up to date with recent regulations. The condo buildings here that are older than 30 years tend to be no taller than two stories, so they’re not required to go through the inspections that often drive up HOA dues.”
HOA dues have surged across Florida in recent years, making it more difficult to find condo buildings with low fees and upping interest in the ones that do. That’s partly due to intensifying natural disasters and rising insurance costs. Additionally, the 2021 collapse of a condo building in Surfside, FL led to tightened regulations. Florida in 2022 enacted a law requiring condo inspections for buildings that are at least three stories once they turn 30 years old. It also requires those buildings to make sure they have enough reserve funds for repairs and maintenance.
Many homeowners associations have been hiking fees and doling out hefty special assessments to comply with the new safety regulations, which had a deadline of Dec. 31.
It’s worth noting that while condo prices are rising in three of the five inland Florida metros Redfin analyzed, they’re rising slower than before. In Orlando, condo prices dropped to a low last January, which may be contributing to this January’s gain (+4% YoY to $208,500).
Inland Florida Has Lower HOA Fees and Less Disaster Risk, Which May Be Buoying Prices
Tallahassee has a median monthly HOA fee of $250—the lowest among the 23 metros Redfin analyzed. Next come two other inland Florida metros: Ocala ($300) and Gainesville ($346). It’s worth noting that while inland Florida has the lowest HOA dues, those dues have been rising quickly. In Tallahassee, for example, the median HOA fee rose 25% year over year in January—more than any other metro Redfin analyzed except Lakeland, which is also inland and saw a 27.6% increase.
Still, $250 may seem affordable to buyers coming from, say, Miami, where the typical HOA fee is $965.
Inland Florida has relatively low HOA dues in part because these fees are typically correlated with property values, and inland Florida has more affordable housing than coastal Florida. But it’s also likely because the region faces lower risk from natural disasters. Just 4.8% of condos in inland Florida face high flood risk, compared with 59.4% of condos on the Gulf Coast and 45.7% on the Atlantic Coast.
“A lot of homeowners associations on the coast are still paying for hurricane damage that happened years ago. Take Daytona Beach—many of the buildings there are still working to fix seawalls and amenities destroyed by Hurricane Ian in 2022,” said Juan Castro, a Redfin Premier real estate agent in Orlando. “The condos in Orlando are newer, more resilient and 50 miles away from where storms typically hit.”
Inland Florida Has a Higher Share of New (and Low-Rise) Condo Buildings, Which May Be Buoying Prices
Less than half (47.7%) of condo inventory in inland Florida is over 30 years old. By comparison, more than half is over 30 years old on the Gulf Coast (57.1%) and the Atlantic Coast (71%).
This means many condos in inland Florida haven’t yet had to pay for inspections and are better protected against natural disasters. But if they’re over two stories, they may have to pay for inspections soon.
A lot of condo towers in Orlando were built in the early 2000s, meaning that in the coming years, many will have to start thinking about their 30-year inspections, which can cost homeowners associations hundreds of thousands of dollars, Castro said. HOA dues are already rising across inland Florida in part because many condo towers have had to increase their reserves under the new law. For these reasons, some owners are putting their condos up for sale now, which is one reason inventory is surging.
Inland Florida Has Seen the Biggest Gain in Condo Inventory, Biggest Drop in Sales
The inventory of condos for sale jumped 37.5% year over year in inland Florida last month, compared with a 27% gain on the Atlantic Coast and a 19.2% increase on the Gulf Coast.
“There are 25 active listings in one downtown Orlando condo building right now, and only four are under contract. The HOA fee for a $335,000 one-bed, one-bath listing runs $774 a month, which is a lot in this area,” Castro said. “Condo owners are trying to sell because HOA fees are rising, but a lot of house hunters aren’t biting for that same reason.”
Condo sales across inland Florida fell 15.9% year over year in January, compared with a 7.8% drop on the Gulf Coast and a 6.9% decline on the Atlantic Coast. The single-family home market is holding up much better, with sales falling just 2.1% in inland Florida, and rising a respective 7.3% and 2.5% on the Gulf Coast and Atlantic Coast.
“Buyers have so many options that they’re overwhelmed,” Castro said. “A lot of condos just aren’t selling. They’ll sit on the market for 200 days, go off the market, and come back on later for a lower price. Sellers are offering major concessions. The condos that do sell are the best ones on the market, and there’s competition for those, which may be one reason sale prices are resilient even though the market is slow.”
To view the full report, including methodology, charts and a metro-level summary, please visit: https://www.redfin.com/news/florida-condo-prices-rise-inland
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