Is Florida real estate bubble about to burst?

[+ Vegas_Millennial]

On 6/25/2024 at 9:10 AM, SouthOfTheBorder said:

 with real estate it’s also about desired quality of life if the property is primary residence.  the Florida market is flush with real estate listings & in the last 12 months has turned into a buyers market…..it does seem like the Covid FL real estate bubble is over. 

Hooray!  I'll be looking to buy in the next few years.  This is a good sign that I'll be home shopping in a stable housing market with more properties to choose from than there are listed now.

Living in Las Vegas,  I've had stability of living in the least disastrous metropolitan area in the U.S. (no hurricanes, tornadoes, winter storms, wild fires, or mudslides. Flooding has mostly been mitigated over the past few decades.  Our biggest natural disaster is earthquake, and we're about 50 times less likely than California to have a big one).  But I can only take so much rocks and no trees.  To get trees, you need water.  To get water, you need rain/snow/storms/hurricanes.

When I buy in Ft Lauderdale, it will be for the way of life.  Property taxes, insurance, and home maintenance are my equivalent of rent to enjoy what the area has to offer.  As others have said, you get what you pay for.

[Frequentflier]

On 6/12/2024 at 1:52 PM, Vegas_Millennial said:

Agree.  The 2008 collapse was caused by too many loans given out with relaxed lending standards with minimum down payments and tricky interest-only or balloon payments, and with relaxed income verification requirements.

For now, Florida remains the state with the highest percentage of all cash buyers.  Prices may drop, but people won't be walking away from their properties and banks won't be foreclosing in mass.

Cash Is Key: The Top 10 States for All-Cash Home Sales | New American Funding

WWW.NEWAMERICANFUNDING.COM

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Cash offers can give you an advantage in any market. Find out which 10 states are the best for all-cash home sales

According to this listing, Florida isn't even in top 10 for all cash sales in 2024.

[+ Vegas_Millennial]

4 minutes ago, Frequentflier said:

Cash Is Key: The Top 10 States for All-Cash Home Sales | New American Funding

WWW.NEWAMERICANFUNDING.COM

---

Cash offers can give you an advantage in any market. Find out which 10 states are the best for all-cash home sales

According to this listing, Florida isn't even in top 10 for all cash sales in 2024.

Thank you for providing.  My data was from 2023.

According to the map in your article, Florida is still in the top half of states with highest percentage of cash buyers.  This helps alleviate concerns that Florida will be the center of a real estate problem caused by foreclosures.  More people better be leary of California.

[EZEtoGRU]

Every time I open the internet now I see a new article about how  the Florida condo market is collapsing due to new regulations on building upkeep/standards/maintenance.  Partly stemming from the Surfside condominium collapse in 2021.  This is a particularly severe issue in older high-rise buildings where many owners can't pay the higher HOA fees/special assessments...so they face possible foreclosure.  

I'm so glad I lived in Florida in the 1990's and got out when I did.  In no way shape or form would I consider investing in Florida today.  Way too risky.  It seems like a house of cards to me.

[BSR]

3 hours ago, EZEtoGRU said:

Every time I open the internet now I see a new article about how  the Florida condo market is collapsing due to new regulations on building upkeep/standards/maintenance.  Partly stemming from the Surfside condominium collapse in 2021.  This is a particularly severe issue in older high-rise buildings where many owners can't pay the higher HOA fees/special assessments...so they face possible foreclosure.  

I'm so glad I lived in Florida in the 1990's and got out when I did.  In no way shape or form would I consider investing in Florida today.  Way too risky.  It seems like a house of cards to me.

By December 31, 2024, condos must pass the first round of structural inspections (not sure of the details) and must have fully funded reserves.  I've read that a LOT of older buildings won't be able to comply by the deadline. 

I guess the state could give buildings more time by postponing the deadline, but condo associations have already had 2 years to get their act together.

What's the alternative?  Shut down all noncompliant buildings, and force the current owners to ... move to a trailer park?  Sorry, don't mean to be flip, but if the state gives owners in old buildings more time, they're just kicking the can down the road.  If an older building needs $millions in repairs and has woefully underfunded reserves, the owners won't have the money in a year or even a decade.

Who knows what will end up happening, but it won't be pretty.

[samhexum]

4 hours ago, EZEtoGRU said:

Every time I open the internet now I see a new article about how  the Florida condo market is collapsing due to new regulations on building upkeep/standards/maintenance.  Partly stemming from the Surfside condominium collapse in 2021.  This is a particularly severe issue in older high-rise buildings where many owners can't pay the higher HOA fees/special assessments...so they face possible foreclosure.  

 

23 minutes ago, BSR said:

By December 31, 2024, condos must pass the first round of structural inspections (not sure of the details) and must have fully funded reserves.  I've read that a LOT of older buildings won't be able to comply by the deadline. 

I read an article the other day about a widow who got a $100,000 assessment from her condo not that long after buying who is now living with her son in Arizona (where she'd moved from).

She has gone back to teaching young kids with autism full-time.  She says she's constantly exhausted and figures it'll take 2 more years to pay off the assessment and move back. 

She can't sell, so she's stuck.

[+ Vegas_Millennial]

8 hours ago, samhexum said:

 

I read an article the other day about a widow who got a $100,000 assessment from her condo not that long after buying who is now living with her son in Arizona (where she'd moved from).

She has gone back to teaching young kids with autism full-time.  She says she's constantly exhausted and figures it'll take 2 more years to pay off the assessment and move back. 

She can't sell, so she's stuck.

This is not much different than a homebuyer who buys a home, only to have their well, septic system, and roof fail all in the first year, and has to come up with $100K to pay for the needed replacements.  Even without the new Florida state law requiring Condo HOAs to be inspected, a buyer should perform due diligence by reviewing the HOA financial records and become aware of the lifespan of building materials before making such a purchase.

8 hours ago, BSR said:

What's the alternative?  Shut down all noncompliant buildings, and force the current owners to ... move to a trailer park?  Sorry, don't mean to be flip, but if the state gives owners in old buildings more time, they're just kicking the can down the road.  If an older building needs $millions in repairs and has woefully underfunded reserves, the owners won't have the money in a year or even a decade.

Who knows what will end up happening, but it won't be pretty.

The alternative is the market value of the condo drops will drop by the assessment amount. This may result in a wave of foreclosures as some people walk away from their mortgages if they are underwater, like we saw in 2009-2012.  Banks will sell to investors and first time homebuyers who will get a good deal, and the banks will write off the losses.

 

Rather than criticize Florida's new law, the real criticism should be on the current and past Condo Owners and their elected Board Members who put off adequately funding for structural repairs in an effort to keep assessments artificially low for so many years.

Edited August 17, 2024 by Vegas_Millennial

[EZEtoGRU]

2 hours ago, Vegas_Millennial said:

Rather than criticize Florida's new law, the real criticism should be on the current and past Condo Owners and their elected Board mlMembers who put off adequately funding for structural repairs in an effort to keep assessments artificially low for so many years.

I don’t think anyone has criticized the new law. I think it’s a good thing and well overdue.   I do think you are underestimating how damaged the Florida real estate market really is. The condo HOA issue, skyrocketing insurance rates, and the general cost of living in Florida are all huge issues.  Whilst wealthy people can handle all of this, the average Joe cannot. If the working class can’t afford to live there anymore, who’s going to provide services to all the rich folks…particularly in South Florida?

[+ BenjaminNicholas]

4 hours ago, Vegas_Millennial said:

Rather than criticize Florida's new law, the real criticism should be on the current and past Condo Owners and their elected Board mlMembers who put off adequately funding for structural repairs in an effort to keep assessments artificially low for so many years.

This is one of the most erudite things said in this whole thread.  Well said.

 

The Florida condo market might be in the shitter, but the home market remains decently strong, especially in South Florida.

You don't go into a condo purchase not expecting special assessments at some point.  That's the very nature of living in that kind of situation.  It's especially going to hit worse if it's an older condo.

To not do your own research before purchase is just dumb as fuck.

Many of these people saw a low sales price and jumped into the deep end of the pool without any real thought.

[mike carey]

7 hours ago, BSR said:

By December 31, 2024, condos must pass the first round of structural inspections (not sure of the details) and must have fully funded reserves.  I've read that a LOT of older buildings won't be able to comply by the deadline. 

I guess the state could give buildings more time by postponing the deadline, but condo associations have already had 2 years to get their act together.

What's the alternative?  Shut down all noncompliant buildings, and force the current owners to ... move to a trailer park?  Sorry, don't mean to be flip, but if the state gives owners in old buildings more time, they're just kicking the can down the road.  If an older building needs $millions in repairs and has woefully underfunded reserves, the owners won't have the money in a year or even a decade.

Who knows what will end up happening, but it won't be pretty.

I agree that it's appropriate for the responsible government to force owners' corporations (or whatever the local law calls them) to have adequate reserves. Doing so crystallises potential liabilities and takes away the ability of the corporations or individual owners to hide  expenses purchasers may face. There are instances here where owners would reject efforts to create necessary reserves preferring, perhaps understandably but shortsightedly, to minimise current costs. This forces their hands. You could argue that it's up to buyers to do their due diligence, but making due diligence difficult for them should not be an option for corporations or owners.

What about non-compliant corporations? My short answer is 'tough shit', but the longer answer is to force them to comply. Issue directions to them to levy contributions to the reserve fund so that it shows up as a liability for individual owners rather than a contingent liability for the corporation. How the corporation enforces the debt is a separate question, they could allow it to be paid off gradually and charge interest on outstanding amounts. (Under the conveyancing laws here, if the owner has to sell, any debts to the corporation are paid from the proceeds of sale before the balance is paid to the vendor.) If they don't comply, then the government should legislate to allow it to fire the corporation executives and appoint an administrator to make the building compliant.

I was on the executive committee of my development 10 years ago when the territory government changed the law to require owners' corporations to hire professional assessors to produce a 10 year maintenance plan and for us to budget a sinking fund to cover the anticipated expenses. We had a special assessment at the time but haven't had one since. (The development is single storey with only duplex and rows of four units, so under our law that's a class of development in which owners are responsible for most building maintenance so for us it was a relatively simple effort.)

[+ Vegas_Millennial]

2 hours ago, BenjaminNicholas said:

This is one of the most erudite things said in this whole thread.  Well said.

 

Thank you; and, I learned a new word today: erudite

😉 😘 

[marylander1940]

Is the same situation happening in TN, GA, TX, CO, UT as he claims?

Edited August 20, 2024 by marylander1940

[+ BenjaminNicholas]

4 minutes ago, marylander1940 said:

Is the same situation happening in TN, GA, TX, CO, UT as he claims?

New, prefab, Levittown-like homes like these, maybe.

Established homes in good neighborhoods, no.

[marylander1940]

4 minutes ago, BenjaminNicholas said:

New, prefab, Levittown-like homes like these, maybe.

Established homes in good neighborhoods, no.

Agreed! There's certainly an oversupply caused (among other reasons) by folks who refused to wear a mask in 2020 and fled to Florida and other places. 

Considering most gay men don't want to live in places like that I think you can still go to Florida and make a profit! Your business is safe!

 

Edited August 20, 2024 by marylander1940

[+ Vegas_Millennial]

1 hour ago, marylander1940 said:

Agreed! There's certainly an oversupply caused (among other reasons) by folks who refused to wear a mask in 2020 and fled to Florida and other places. 

Considering most gay men don't want to live in places like that I think you can still go to Florida and make a profit! Your business is safe!

 

The home prices in Wilton Manors near the gay bars and strip clubs are the highest in the area. I vacationed there a lot in 2021 without a mask and that's when I decided I want to move to Florida when I switch careers in a few years.  Home prices in my price range have been pretty steady for close to a year there.  I'm hoping they dip in the next 3 years before it's time for me to move there.

Edited August 21, 2024 by Vegas_Millennial

[marylander1940]

On 8/20/2024 at 6:14 PM, BenjaminNicholas said:

New, prefab, Levittown-like homes like these, maybe.

Established homes in good neighborhoods, no.

Not only suburbs but also condominiums because of a sudden hike in HOA fees as already posted by others in this thread.

Growing Glut of Older Condos Is Threatening the South Florida Housing Market. Here’s Why

 

[+ Vegas_Millennial]

55 minutes ago, marylander1940 said:

Not only suburbs but also condominiums because of a sudden hike in HOA fees as already posted by others in this thread.

Growing Glut of Older Condos Is Threatening the South Florida Housing Market. Here’s Why

 

As of July, Florida has a 4.6-month supply of single-family homes for sale and a 7.4-month supply of condominiums for sale.  Anything less than a 6-month supply is considered a seller's market; and, anything over is considered a buyer's market. 

Across the United States, there is a 7.5-month supply of single-family homes for sale.  I could not find data on the nationwide supply of condominiums.

So, Florida's real estate market continues to be as good as or better than the nation's.

Florida Housing Market 2024 & Predictions for Next 5 Years

WWW.NORADAREALESTATE.COM

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Florida housing market predictions 2024. Click for the Florida real estate market...

 

US Months Supply of New Single Family Houses Monthly Analysis: New Residential Sales | YCharts

YCHARTS.COM

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In depth view into US Months Supply of New Single Family Houses including historical data...

 

 

Edited September 18, 2024 by Vegas_Millennial

[EZEtoGRU]

Two back-to-back major hurricanes (will) hit Florida (Helene & Milton) in the last few weeks.  It astounds me anyone would still consider voluntarily moving to that state and take on the risk of property loss.  Already high insurance rates are about to explode higher I'm sure.  How can any of this end well for the state?

[pubic_assistance]

1 hour ago, EZEtoGRU said:

Two back-to-back major hurricanes (will) hit Florida (Helene & Milton) in the last few weeks.  It astounds me anyone would still consider voluntarily moving to that state and take on the risk of property loss.  Already high insurance rates are about to explode higher I'm sure.  How can any of this end well for the state?

A lot of the major hurricane damage stems from shoddy construction methods used over the last 40 years. My cousin lives in Fort Meyers, Florida. When hurricane Ian destroyed much of the community in 2022 it was the buildings that were NEWEST, not the oldest. Fortunate for my cousin, she lives in an old fishing shack built in the 1950s. When she returned home after the devastation, she found her home intact along with a few other old homes along the waters edge. The houses further down the street, all built in the 1970s were GONE.

[Arab]

As long as Florida can keep up with offering high paying jobs, there might be some hope for cities there, but remote jobs have started to pay less. The costs of insurance and upkeeping in Florida also have been insane. The culture and the weather there also aren't for everyone year-round. It might go back to being a slight seasonal place and the price will likely adjust accordingly.

[samhexum]

any property you own in South Florida could one day be an underwater investment...

South Florida sees dozens of luxury high-rise buildings start to sink

[+ Vegas_Millennial]

20 minutes ago, samhexum said:

any property you own in South Florida could one day be an underwater investment...

South Florida sees dozens of luxury high-rise buildings start to sink

That's typical and is expected for new construction of all large buildings.  Per the article, the new high-rises (all constructed after 2014) were expected to sink "tens of cm's" in the first decade after construction.

Many of the Las Vegas Strip casinos settled several feet in the decade after their construction.  It was all analyzed in their geotechnical reports and part of the design for their foundations.

[samhexum]

17 minutes ago, Vegas_Millennial said:

That's typical and is expected for new construction of all large buildings.  Per the article, the new high-rises (all constructed after 2014) were expected to sink "tens of cm's" in the first decade after construction.

Many of the Las Vegas Strip casinos settled several feet in the decade after their construction.  It was all analyzed in their geotechnical reports and part of the design for their foundations.

yeah, but it made for a good pun.

[+ sniper]

On 12/19/2024 at 1:00 PM, Vegas_Millennial said:

That's typical and is expected for new construction of all large buildings.  Per the article, the new high-rises (all constructed after 2014) were expected to sink "tens of cm's" in the first decade after construction.

Many of the Las Vegas Strip casinos settled several feet in the decade after their construction.  It was all analyzed in their geotechnical reports and part of the design for their foundations.

Eh, but some of them ended up sinking faster than expected and causing problems. Luxor in particular has had some issues and I think Mandalay Bay did too.

[Frequentflier]

On 12/19/2024 at 10:38 AM, samhexum said:

any property you own in South Florida could one day be an underwater investment...

South Florida sees dozens of luxury high-rise buildings start to sink

So two objectives perhaps? 1) have enough money to buy a house or condo without a mortgage so you don't have to pay exhorbitant insurance rates and for a condo can pay the special assessments and 2) if a condo buy at a high level so your home never ends up in the basement as the building sinks.