Florida Condo Sales Climb at Both Ends of the Market While Supply Stays Firmly in Buyers' Favor

Florida's condominium market is showing renewed activity after two difficult years, with existing condo and townhouse sales climbing 14 percent in June compared with the same month a year earlier. The gains came at both ends of the price spectrum, with buyers pursuing lower-priced units and a pronounced surge in luxury transactions, according to data reported by Florida Realtors.

Statewide existing condo-townhouse sales totaled 8,900 in June. Across the full second quarter, the figure reached 27,101 transactions, up 9 percent year over year. Both closed sales and new pending sales rose, alongside higher median prices for existing condos and townhouses and for single-family homes.

The recovery in transaction volume has not eliminated the inventory overhang. Condo-townhouse properties sat at an 8.1-month supply in both June and the second quarter, a level that keeps negotiating leverage with buyers. A balanced market is generally considered to be around five and a half months of supply.

What the numbers show

The distribution of the sales growth is the most revealing part of the data. Activity increased among buyers searching for lower-priced housing options and among those shopping in Florida's luxury market, with a comparatively softer middle.

Growth within the million-dollar-plus category extended across every price range and accelerated as prices rose. Sales between $1.25 million and $1.49 million increased 33 percent. Sales from $1.5 million to just under $2 million rose 37.4 percent. Sales between $2 million and $2.99 million climbed 39.4 percent. Higher still, sales between $5 million and just under $10 million increased 48.8 percent, and sales of $10 million or more rose 59.3 percent.

That pattern describes a market where the highest tier is behaving almost independently of the forces constraining everything below it. Ultra-luxury buyers in Florida are frequently paying cash, which insulates them from mortgage rates, and they are typically purchasing in buildings where association finances and reserve funding are not in question.

The forces reshaping Florida condos

The condo market's difficulties since 2022 trace to a specific and well-documented set of causes.

The collapse of Champlain Towers South in Surfside in June 2021 prompted a sweeping legislative response. Florida enacted requirements for milestone structural inspections of older buildings and for structural integrity reserve studies, along with mandates that associations fund reserves for major building components rather than waiving them, as many had done for years.

The financial consequences arrived in the form of special assessments. Associations that had deferred maintenance and underfunded reserves for decades confronted the full cost at once, and owners in some buildings faced assessments running into six figures. Monthly association dues rose sharply across the state as boards moved to fund reserves on the required schedule.

Insurance compounded the pressure. Association master policies covering condominium buildings absorbed steep premium increases through the same period, and those costs pass directly to owners through dues.

The combined effect was to make the true monthly cost of owning an older Florida condo substantially higher than the listed price and mortgage payment would suggest, which is precisely the dynamic that pushed inventory up and prices down in the affected segment.

Why the two ends are moving

The bifurcation makes sense once the underlying costs are accounted for.

At the low end, prices in many older buildings have fallen enough to attract buyers who are willing to accept association risk in exchange for entry pricing. Some of these buyers are investors calculating that assessments already levied have reset a building's finances onto sounder footing. Others are owner-occupants for whom a discounted purchase price offsets higher carrying costs.

At the top end, newer luxury buildings generally are not carrying the same structural and reserve exposure. Recently constructed towers have not reached milestone inspection thresholds, their reserves were funded under current rules from the start, and their buyers are less sensitive to dues increases in absolute terms.

The middle of the market, older buildings that are neither deeply discounted nor newly built, has been the hardest to move. Buyers in that segment face the same association risk as at the low end without the compensating discount.

What it means for Floridians

For buyers, the practical guidance from real estate professionals has converged on due diligence at the association level. The building's financial condition now matters as much as the unit itself.

Prospective buyers are advised to obtain and review the association's most recent structural integrity reserve study, its milestone inspection report if the building has reached the applicable age, its current reserve balances, its budget, and its meeting minutes for the past several years. Minutes frequently reveal discussions of pending assessments and deferred repairs before those items appear in formal disclosures.

The master insurance policy deserves equal attention, including its deductible for hurricane claims. In many Florida associations the hurricane deductible is a percentage of insured value rather than a flat amount, which can translate into a substantial per-unit obligation after a storm.

For existing owners, the picture varies enormously by building. Owners in associations that funded reserves responsibly over time are in a fundamentally different position from those in buildings now catching up on decades of deferred obligations.

Regional variation

Florida's condo market is not one market. Miami-Dade, Broward, and Palm Beach counties hold the largest concentration of older coastal high-rise inventory and have seen the most pronounced effects of the reserve and inspection requirements.

Southwest Florida markets in Lee and Collier counties carry the additional overlay of hurricane damage and recovery from recent storms, which has affected both insurance pricing and buyer sentiment.

Tampa Bay and Central Florida condo markets skew somewhat newer and less coastal on average, moderating the exposure. Northeast Florida around Jacksonville has a smaller condo share overall relative to single-family inventory.

The luxury surge is concentrated where luxury inventory exists, principally in Miami-Dade, Palm Beach, and Collier counties, along with select coastal markets in Sarasota and the Panhandle.

The broader housing picture

Condos are one component of a Florida housing market navigating higher borrowing costs. Mortgage rates have held near 6.7 percent, with the 30-year fixed rate averaging 6.66 percent as of July 30 and standing at 6.834 percent on August 5, following the Federal Reserve's decision to hold its benchmark rate steady at its July meeting.

Single-family sales, closed and pending, also rose in June and the second quarter alongside higher median prices, indicating that Florida buyers have continued transacting despite rate levels that would have looked prohibitive a few years ago.

Inventory across the state has recovered substantially from the extreme scarcity of the pandemic period, which has restored a degree of normal negotiation to transactions that had largely vanished.

What a structural integrity reserve study contains

The document that now determines the financial trajectory of most older Florida condominium buildings is one that few owners had heard of five years ago.

A structural integrity reserve study evaluates the condition and remaining useful life of a defined set of building components: the roof, load-bearing walls, the floor and foundation systems, fireproofing and fire protection systems, plumbing, electrical systems, waterproofing and exterior painting, windows and exterior doors, and any other item with a deferred maintenance or replacement cost above a statutory threshold.

For each component, the study estimates remaining life and replacement cost, then calculates the annual reserve contribution required to have the money available when replacement becomes necessary. That calculation produces the number that drives association budgets.

The reason these studies produced financial shock is arithmetic rather than surprise. A building that has not funded reserves for twenty years and needs a roof in three has to accumulate two decades of savings in thirty-six months. There is no gentle way to do that.

The milestone inspection requirement

Running parallel to the reserve requirement is the milestone inspection, a structural assessment triggered by building age.

Buildings three stories or higher must undergo a milestone inspection at a defined age threshold, with buildings closer to the coast subject to earlier inspection, and repeat inspections on a set interval thereafter. The inspection is performed by a licensed engineer or architect and evaluates the structural condition of the building.

A phase one inspection is visual. If it identifies signs of substantial structural deterioration, a phase two inspection follows, involving destructive or non-destructive testing to determine the extent of the problem.

The findings drive repair obligations, and repairs identified as necessary must be undertaken on a defined timeline. For buildings where inspection reveals significant deterioration, the resulting costs frequently exceed what reserve funding covers, producing assessments on top of assessments.

This is the process working through Florida's older condominium stock building by building, and it has years remaining to run.

The insurance layer

Association master policies covering condominium buildings sit on top of the structural picture and have their own dynamics.

A condominium owner in Florida typically carries two forms of coverage. The association's master policy covers the building structure and common elements, with the cost passed through as part of monthly dues. The owner's individual policy, often called an HO-6, covers the interior of the unit, personal property, and loss assessment coverage.

Loss assessment coverage is the provision most owners overlook and the one that can matter most. It covers a portion of an assessment levied by the association following a covered loss, and coverage limits are frequently far below what a major assessment would require.

Hurricane deductibles on master policies are typically expressed as a percentage of insured value rather than a flat sum, which means a windstorm claim on a large building can produce a deductible in the millions. That deductible is distributed among unit owners.

Buyers evaluating a Florida condominium are increasingly advised to obtain the master policy declarations page and confirm the hurricane deductible before closing, alongside the reserve study and inspection reports.

What's next

Florida Realtors publishes monthly market data, and July figures will indicate whether June's condo gains represent a durable trend or seasonal variation. The summer months are typically active in Florida real estate ahead of a slower fall.

The structural reserve requirements continue to work through the inventory as more buildings reach milestone inspection thresholds. That process has years to run, and each cycle of inspections and reserve studies produces new assessments in buildings that had deferred them.

For buyers, the current market offers something Florida has not consistently provided in years: time to evaluate, room to negotiate, and inventory to choose from. The 8.1-month supply is a problem for sellers and an opportunity for anyone prepared to do the association homework the market now demands.