Redfin: Florida, Texas Condo Markets Struggle

(Image courtesy of Redfin; Breakout image courtesy of Jovydas Dobilas/Pexels.com)

Redfin, Seattle, released a recent report looking at condo activity in Florida and Texas amid growing insurance and HOA costs. In major metro areas in both states, inventory is increasing, but pending sales are dropping, the report noted.

The year-over-year change in the number of condos for sale–as of July 2024–saw an increase of 53% in Florida and an increase of 42% in Texas. That compares with nationwide, which saw a 27% year-over-year increase.

“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.”

For example, in Tampa, the number of condos for sale was up 57.2% from a year earlier in July, but pending sales dropped by 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%.

In general, condos aren’t faring as well as in previous years nationwide. The pending sales of condos fell 5.5% year-over-year in July, the lowest July on record.

Redfin pointed to a number of factors as depressing condo sales in Florida and Texas specifically.

For one, insurance premiums are increasing due to the prevalence of natural disasters. Condos are particularly hard hit, Redfin noted, because so many are right on the water.

HOA fees have surged in Florida–a separate Redfin report pointed to such dues having increased more than 15% from last summer in cities such as Tampa, Orlando and Fort Lauderdale. The Surfside condo collapse in 2021 has sparked additional maintenance requirements, in addition to rising insurance costs affecting HOAs.  

Additionally, investors are showing less interest in condos, with investor purchases of condos down nationwide 3% year-over-year in Q2.

And, Texas and Florida have added to the condo inventory with more new construction than anywhere else in the country, contributing to the supply numbers.