Florida and Texas Condo Supply is Piling Up As Sales Slow Amid High HOA, Insurance Costs
04 Septiembre 2024 - 7:30AM
Business Wire
Redfin reports condo inventory is soaring and
pending sales are dropping in major Florida and Texas metros like
Miami, Jacksonville, Austin and San Antonio, causing prices to
decline
(NASDAQ: RDFN) — Condo prices are falling in major Florida and
Texas metros as inventory piles up and buyers back off, according
to a new report from Redfin (redfin.com), the technology-powered
real estate brokerage. This comes as high HOA fees and insurance
costs make condos a tough sell.
In Tampa, for instance, the number of condos for sale soared
57.2% from a year earlier in July, pending sales dropped 18.9% and
the median sale price fell 4.9%. In Houston, condo inventory is up
35.9%, pending sales are down 35.3% and prices are down 6.5%.
There’s also more supply than demand for single-family homes in
Florida and Texas, but the market for them is faring a bit better,
and prices are generally increasing.
Nationwide, condo inventory is increasing and pending sales are
falling—though not as much as in Florida and Texas—and prices are
still rising.
Condo market summary: Texas and
Florida, July 2024
Texas and Florida metros that are among
the 50 most populous U.S. metros
Median sale price
Median sale price, YoY
Pending sales, YoY change
Sales, YoY change
New listings, YoY change
Active listings, YoY change
Austin, TX
$380,000
-1.9%
-12.9%
-11.1%
4.2%
28.6%
Dallas, TX
$270,000
-0.8%
5.7%
-0.9%
7.9%
61.7%
Fort Worth, TX
$217,000
8.0%
-3.9%
-33.3%
-1.7%
65.4%
Houston, TX
$159,000
-6.5%
-35.3%
-26.3%
-8.0%
35.9%
San Antonio, TX
$199,000
-2.2%
-15.4%
-48.5%
1.2%
58.3%
Fort Lauderdale, FL
$230,000
-4.2%
-18.0%
-13.9%
14.7%
63.4%
Jacksonville, FL
$270,000
-6.6%
-15.9%
-14.3%
27.6%
80.7%
Miami, FL
$403,000
-2.9%
-12.9%
-7.9%
13.0%
39.9%
Orlando, FL
$218,500
-0.7%
-22.6%
-17.3%
-6.6%
67.5%
Tampa, FL
$237,750
-4.9%
-18.9%
-8.1%
0.1%
57.2%
West Palm Beach, FL
$265,000
1.9%
-11.2%
-8.6%
4.0%
42.0%
U.S.
$355,073
3.9%
-5.5%
1.1%
2.8%
27.1%
There are several reasons why demand for condos is falling
and inventory is piling up in Florida and Texas:
- Surging HOA fees in Florida. A separate Redfin analysis
found that HOA dues are up more than 15% from last summer in Tampa,
Orlando and Fort Lauderdale. They’ve also risen more than the
nationwide average in West Palm Beach and Jacksonville. HOA fees
are increasing because the Surfside condo collapse led to
additional maintenance requirements for condos, and because of
rising insurance costs.
- Climate disasters contributing to soaring insurance
premiums. On a related note, frequent and intense natural
disasters in Florida and Texas are a major factor in skyrocketing
insurance costs, which contributes to surging HOA fees in condo
buildings as maintenance costs are passed on to unit owners. Some
buyers in Florida and Texas struggle to find homeowner coverage at
all as insurance companies leave the states. Those rising costs,
along with the natural disasters themselves, are scaring off condo
buyers and motivating condo owners to sell. Rising insurance costs
also impact single-family homes, but condo owners are hit
particularly hard because many condo buildings are on the
waterfront, where insurance costs are higher. Owners of
single-family homes on the waterfront are more likely to have
enough money to pay high insurance costs or pay cash to avoid
insurance altogether.
- Investors have backed off. Real estate investors are
less interested in condos than they used to be; nationwide,
investor purchases of condos fell 3% year over year in the second
quarter. Florida Redfin agents are reporting investors aren’t
buying condos anymore; instead, those who bought condos to rent
them out a few years ago are trying to offload them.
- New construction boom. Texas and Florida are building
more new homes, including multifamily buildings, than anywhere else
in the country. That includes many new condo buildings, some of
which were built in the wake of the Surfside condo collapse, which
revealed that many older condo buildings on the Florida coast
needed to be replaced. That’s adding to the surge in condo
inventory, which is piling up as buyers turn away.
“The condo market isn’t moving,” said Steven Weiss, a Redfin
Premier agent in Tampa. “Most of today’s buyers want move-in ready
single-family homes. It’s much more difficult to sell a condo.
Buyers are aware we’re at somewhat of a tipping point for condos,
and that their value may continue to decline as HOA fees rise and
people grow more wary of buying in a waterfront building.”
Nationwide, condo sales are slow but prices are holding
up
Zooming out to the U.S. as a whole, pending sales of condos fell
5.5% year over year in July, dropping to the lowest level of any
July on record. For the sake of comparison, pending sales of
single-family homes were essentially unchanged from a year ago.
The number of condos for sale rose 27.1% from a year ago, a
major increase but substantially smaller than what Florida and
Texas are seeing. The mismatch in supply and demand hasn’t yet
pushed down prices nationwide; the median condo-sale price is up
3.9% year over year.
The downturn in the national condo market is being driven by the
downturns in the major Florida and Texas metros discussed above, as
well as other Sun Belt metros like Phoenix and Nashville, TN.
But Redfin agents in other parts of the country report slow
condo markets, too, partly because of rising HOA fees. In San Jose,
CA, for instance, condo inventory is up 50.7% year over year, and
prices are down 3.2%. In Denver, pending sales of condos are down
25.4% and prices are flat.
To view the full report, including an additional chart, please
visit:
https://www.redfin.com/news/condo-supply-rises-florida-texas-2024
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Customers selling a home
can have our renovations crew fix it up to sell for top dollar. Our
rentals business empowers millions nationwide to find apartments
and houses for rent. Since launching in 2006, we've saved customers
more than $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240904949547/en/
Redfin Journalist Services: Angela Cherry press@redfin.com
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