News

The Miami real estate market is entering another one of those “uh-oh” cycles. These days, the culprit is wildly out-of-control homeowner association fees.

According to a new report, condo fees in South Florida have jumped 60% in the past 5 years, and they’re expected to go higher. Redfin data shows the median monthly condo association fee in Miami-Dade County has from $567 in 2019 to $900 this year, the Miami Herald reports. In the last year alone, fees in Miami-Dade are up 10%, and 17% in Broward County.

“Condo owners, some with stagnant salaries or on fixed incomes, are feeling every bit of those rising costs,” the Herald reports.

Several factors are driving up the fees, including spiraling insurance costs, repair bills, and a new state law requiring buildings to repair aging structures. Many insurers have left Florida in the wake of the hurricanes that regularly ravage the state. At the same time, associations are hitting owners with massive special assessments to build up reserve funds to meet new state requirements.

“We’ve seen a lot more stress in the lower to middle market where buildings have put off repair projects and have maybe waived reserves for many, many years and have been kicking the can down the road,” attorney David Podein told the Herald. “You are seeing a lot of economic stress where maybe the units are worth $400,000, $500,000, or $600,000, but you have unit owners potentially facing $50,000, $100,000 or $150,000 special assessment.”

Meanwhile, the Miami real estate rollercoaster continues. Condo sales in Miami-Dade fell by almost 27% in the last year and 32% in Broward. With prices sliding in many buildings, owners facing higher fees can’t afford to sell their apartments.

All in all, the report is one more example of why so many international buyers are turning away from Miami and heading to Panama. 

Read the full article here.