The Blubber

Across Florida, condo prices have declined between 1% and 6% year-over-year each month since July 2024, with a 3% drop recorded in February alone, according to Florida Realtors.

Older buildings have been hit hardest. Properties over 30 years old have lost 22% of their value over the past two years, data from South Florida real estate firm ISG World shows. In contrast, newer condos have appreciated 12% over the last decade.

Much of the collapse in older condo values is tied to tough regulations introduced after the deadly 2021 Surfside condo collapse, which killed 98 people. The rules — requiring structural inspections and fully funded reserves for repairs — came with a December 2024 compliance deadline. Yet, fewer than 25% of Florida condo associations have reported meeting those standards, according to the Department of Business and Professional Regulation.

Compliance remains low, and financing is increasingly scarce. With lenders growing cautious and more than 1,400 condos blacklisted by Fannie Mae, the selloff is accelerating.

Florida, which is home to 20% of the nation’s condos — more than half of which are at least 30 years old, according to the UF Bergstrom Center for Real Estate Studies — is seeing its market reshaped by these pressures.

“If these buildings are subject to reserve requirements, buyers want to make sure they’re getting into a situation where the condos have their act together,” Brad O’Connor, chief economist at Florida Realtors, told The Wall Street Journal. “Whether it’s the lenders or the buyers themselves, we’ve seen a slowdown in condo demands.”

Financing challenges are worsening the crisis. Lenders are hesitant to approve loans for units in buildings undergoing structural work.

“They won’t want to finance anything until the repairs are done,” said Anibal Torres, a mortgage lender with CMG Financial.

Governor Ron DeSantis has acknowledged the growing strain, hinting at potential relief measures as the condo market buckles under regulatory and financial weight.

Currently, over 1,400 Florida condos are on Fannie Mae’s “blacklist” due to issues such as inadequate insurance or critical repair needs — effectively locking out mortgage options and chilling demand. Florida leads the nation in blacklisted properties.

Jake Harrington, president of a 17-year-old condo board in Boynton Beach, is feeling the fallout. His building launched a $7 million facade renovation — roughly $15,000 per unit — intended to boost property values. But a clerical error on a form flagged the building as partly operating as a hotel, landing it on Fannie Mae’s blacklist and halting sales.

“This is going to be a beautiful property, restored beyond its original state once the project’s done — except we’re on the blacklist because of a typo,” Harrington told The Journal. “It’s just frustrating.”