If you are among many New Jerseyans who dream of living on the water in sunny Florida during the cold winter months if not year-round, it may be the perfect time to find your tropical paradise.
At the moment, there is no shortage of condo units for sale in the Sunshine State, in the aftermath of the disastrous 2021 collapse of a high rise building in Ft. Lauderdale. The sad tragedy stunned the country and sparked fears of buying into poorly maintained buildings, in Florida and elsewhere, altering the trajectory of a market that was booming during the pandemic. Back during the lockdowns, New Jerseyans headed south in droves. In 2022, the migration rate from NJ to Florida was up by 67% from 2019, according to Miami Realtors.
Nevertheless, Florida's condo market has since slowed down, as new laws went into effect that required owners of condos built before 2000 to undertake studies of their building’s infrastructure, complete structural repairs and fully fund reserves for future improvements. This led to homeowner association fee increases, rising insurance costs and mandatory assessments as high as 20-30 % of a unit’s value, placing significant financial burdens on owners.
“Almost everyone has been hit by these special assessments, and it especially impacts Palm Beach and Miami and Singer Island, where you have the vast majority of waterfront condos that were built before 2000,” according to Erin Sykes, owner of Sykes Properties, which serves Florida, New York and New Jersey. “So, it’s really unfortunate because it’s affected the people who bought a while ago, the people on fixed incomes, retirees, and it’s really priced them out and forced them to sell.”
An opportune time for buyers
Still, in every downturn, there is opportunity. Now that many buildings have completed or mostly completed their studies and assessments, and buildings are in various states of coming into full compliance, there is less uncertainty, and more optimism. So, if you know what you want and you are willing to educate yourself, understand the HOA fees and the insurance costs, this may well be the perfect time to negotiate a price that benefits you and the seller.
“We're finally starting to see sellers administer price reductions. Overall, owners of condos affected by these special assessments have pulled back their prices by about 20% from their peak, and those are the ones going into contract,” says Sykes. “This does give rise to opportunity because in the vast majority of cases, these assessments are either almost paid for or they are paid for at closing as part of the negotiated contract.”
For sale: top: 2 bed 2 bath condo on Ocean Blvd, Singer Island with water views. Bottom: Condo in Palm beach with units for sale.
Despite the challenges in Florida, people who retire are still looking for a warmer climate to retreat to, with outdoor recreation, beaches and life by the water. Florida checks all the boxes, and is an easy plane ride to New Jersey, for those who go back and forth.
The eternal appeal of Florida condo living
The main advantages of condo living have not changed. With shared costs, condo owners have minimal personal maintenance, and you can usually procure a much better location than you would for the same amount of money spent on a single-family home. Then, there’s the shared amenities such as a pool, a gym, beach storage and some buildings offer luxury features such as concierge services.
South Jersey resident Bonnie Siok is selling her two-bedroom condo on Singer Island, a highly desirable barrier island community, surrounded by ocean on one side and the Lake Worth lagoon and inlet on the other. With its noteworthy beaches, beautiful views and proximity to the buzz of Palm Beach, Singer Island is where Siok and her husband Don have happily built many cherished memories over several decades, raising their children and grandchildren.
Siok says she never anticipated having difficulties finding a buyer, but she is hopeful, knowing that she lives in a well-maintained building and that’s what buyers are looking for.
“People also want safety, and many of the high rise buildings provide a doorman and 24-hour security,” says Siok. “And people want to know they are in a location where their grandkids are going to want to come visit, with a pool and beach, where you can walk along the lake and take bike rides.”
A new trend of looking at buildings first, then unit
Indeed, today’s condo shoppers are looking at buildings first, then units. This is the opposite of before, when buyers would find a unit online that looks appealing, go see it and then consider the building, says Sykes.
“Now buyers are saying, I only want to be in X, Y or Z building because those assessments are almost done, or because they were well-maintained or because they like the board there, and then they are backing into the units that are available in that building,” she says.
For buyers, one important factor to consider is whether the building has completed its structural integrity assessment, or “milestone study,” and if that’s finished, Sykes says you’ll know that the assessments are vastly completed.
She also recommends going into condo ownership with the right mindset.
“Real estate really should be a long-term purchase," Sykes says. "I think the word flip is overused and I think it’s super dangerous because when you’re buying a property for personal use, you should really be thinking of at least a five-year perspective, and when you do that, it becomes a lot less scary.”
