I've Never Seen the Condo Situation This Bad Except 2008

Buying a condo, particularly a high-rise condo in 2026 and beyond, kind of makes no sense anymore, guys. I'm going to give you guys the breakdown of why that is. And also, that's a big departure from what these condos used to be, because condos always represented a lower price point, a lower barrier to entry into homeownership. And it still is that when you just look at the purchase price. But because of all the other expenses that are involved with owning a condo now, it kind of doesn't make sense. And for those of you who don't know, on June 24th, we just had the five-year anniversary of when the condo in Surfside collapsed. And many of you have probably seen on the news how a lot of these high-rises and condos over in Venezuela also recently collapsed due to the earthquakes there. And ever since we had the condo collapse in Surfside, it really changed the game and the entire dynamic of what it is to own a condo. Before that, condo maintenance fees were relatively low everywhere, guys, because there hadn't been a major incident like this anywhere in the United States up until then. And that led to all kinds of problems with buildings not being kept up, lots of deferred maintenance. And when you push that to the extreme, like in the case of the Surfside collapse, a building can actually fall down. And we have seen that. And then after that happened, the state of Florida passed a lot of new rules and regulations that force buildings that are at least 30 years old or 25 years old, if you're to undergo mandatory structural inspections and then fully fund reserves for future repairs, which actually hasn't happened yet. There is a lot of enforcement on the structural inspection side of things and getting those repairs done. There has been a lot of enforcement on that front. But as far as the full reserves go, the state of Florida keeps kicking that can down the road, and the reason is because that could have even more major implications than the structural repairs. Those structural repairs already cost multi-millions of dollars. People are seeing major, massive special assessments to the tune of six-figure assessments to get these repairs done. But then to have a law where a condo needs to fully fund its reserves at the same time as making all these repairs is pretty much financially unfeasible for 99% of condo owners. And I know this might sound like a Florida issue exclusively as you hear me say some of this stuff, and some of it is. But the thing is, it affects the entire condo market nationwide because nationwide, a lot of condos are facing a lot of the same scrutiny, a lot of the same HOA fee hikes, as well as a lot of the special assessments that people are getting in Florida, just not to the same extreme level. And the reason why the reserve requirements are being kicked down the road is because fully funded reserves will massively increase a condo owner's monthly HOA fee in Florida. The average person who's paying, let's say, $1,000 a month right now could easily, easily see their HOA fees go up to $1,500 a month, maybe $1,800 a month or more, depending on what it actually takes for that building to get to full reserve status. So you can see how that would be a major problem, especially if that same condo owner recently got hit with, say, a $50,000 special assessment. And in South Florida alone, this problem is very prominent because about three quarters of all the condos that are in Miami-Dade, Broward, and Palm Beach counties were built in 1993 or earlier, which means that about 75% of all of these condos in South Florida are going through all of these problems all at the same time. And guess what? When you have to have that many structural repairs done all at once on all of these buildings, that massively increases the cost because there's only so many of these companies to go around that can actually do these restoration projects and they have spread themselves extremely thin and are charging massive premiums to get this work done. I know because I live in a condo in South Florida and I am part of this group paying for this right now. According to the Florida International University, the median condo association fees in Miami-Dade have increased 70% since 2016. And condo association fees for buildings that are at least three stories jumped 42% just between 2022 and 2025. Miami now has the highest HOA fees in the country, and that doesn't surprise me one bit as somebody who lives there. The median HOA fee in the greater Miami area is at $617 a month, which is nothing, guys. That is very low. And that is the median. That's why these median numbers really can't be trusted or used as a typical amount you're going to pay because I guarantee you, go look at any condo in South Florida right now, even one that's not in a high rise, and you will be challenged to find one where you're paying $600 a month or less. Maybe for a small studio in a building that's only a couple stories tall, you'll be getting that. But even in these small buildings, those HOA fees have risen massively due to just the cost of insurance and maintenance alone. In fact, it is not uncommon anymore that if you own one of these condos, you could be paying more in monthly HOA fees than you're even paying on your mortgage. And insurance for the condos has been a major problem, guys. That has been the largest culprit of these major HOA fee increases. For example, the average insurance premium for condos in Miami-Dade was at $175,000 a year in 2021. At the end of 2024, that average got bumped up to 462,000. And those are real numbers for sure. I remember in my condo in 2022, we went from paying $400,000 a year in insurance, and we're right on the ocean, to a whopping $800,000 a year. And then the following year, it got bumped up to a million. And surprisingly, the insurance rates have been coming down a little bit. In fact, in 2026, we got a bump downward on our insurance premiums, finally, on our building. And it actually helped everybody save a good chunk off of their monthly HOA fees. Mine personally went down by $300 a month. It was a noticeable decline. But that's 164% increase in just three years. How sustainable is that for somebody who is not making a sizable income? And we're only talking about building insurance. If you have a mortgage on your condo, or if it's stated in the condo bylaws, you need to have individual homeowner's insurance on your condo unit, in addition to those HOA fees. And those premiums have gone from about $1,600 a year to $2,300 a year over that same time period, which was a 44% increase. And so fast forward to today, anybody who's considering buying a condo pretty much doesn't care about the purchase price anymore, guys. It's almost like the purchase price is the most irrelevant part of the transaction now, which is kind of crazy when you think about it with any sort of real estate deal, right? The purchase price is always forefront and top of mind in ways it still is because the purchase price makes or breaks any given real estate deal. But whatever you pay for that condo is fixed, right? That is a fixed cost. But what's not fixed are HOA fees or surprise special assessments. And of course, the usual suspects that any homeowner has to deal with, like an increase in property taxes and insurance. If you are somebody considering buying any condo right now, guys, I don't care if it's in Florida, if it's a high rise, a low rise, some condo in the middle of nowhere, I don't care. You need to be 100% focused on what are the HOA fees now? What are the HOA fees going to be next year or the year after that? A lot of HOAs will give you their current budget and their predicted budget over the next couple of years. That's all information that you can take a look at. And those are based on what the expenses are right now and where they think things are going. They also have to disclose if there's been any special assessments announced. That's why it's important for you to gather up the meeting minutes from the board. The board has to produce meeting minutes, which is just a fancy way of saying, this is what we talked about in this HOA board meeting. And when there's a mention of an increase in fees or a special assessment, it's something that you need to pay attention to. But it also puts a lot of existing condo owners in a situation where they are completely trapped because if you try to sell in this market right now, the timing is terrible because all of these buildings are going through major restoration projects all at the same time. So the appearance and the first impression is absolutely horrible. Like if I were to try to sell my condo right now, I would be getting at least $200,000 less than I could have got just a couple of years ago before they started the concrete restoration project because it looks terrible. You've got scaffolding everywhere. You've got swings hanging down from the building. Half the building is painted. Half the building is not painted. There's no pool. There's no hot tub. Half the amenities are closed and it looks terrible. And it's super noisy. You go inside, you can't open balcony doors because everything is locked up. It's terrible. And the fact that this is all occurring at the same time that the housing market in general is on a downward slide, especially in Florida, the timing really couldn't be worse to try and sell a condo, guys. And the funny thing is, I see a lot of people trying to get out of these places now, now that it's too late. You see a ton of condos for sale and everybody is just late to the game. No one could have seen this coming. And it's really unfortunate because if these people would have just been a little bit smarter and paid more attention to market trends by watching channels like mine over the past few years, they would have known that it would have been better to sell two or three years ago. You would have gotten a much higher dollar amount and you wouldn't be on the hook for any of these special assessments. It'd be the next buyer's problem. But trying to sell when the building's under construction and everybody else is trying to sell at the same time is a recipe for disaster. Inventory has exploded. So buyers have unlimited choices, essentially, and buyers are extremely skeptical of these properties as they should be. As of the May numbers, South Florida has approximately 12 months of condo inventory, which means it would take a full year to sell all of the that are listed for sale right now, even if no new units came to the market, which is wild. Median condo sale prices have fallen three and a half percent over the past year in Miami. And one of the leading condo experts in Miami, Peter Zalewski, he's been around forever talking about the condo market, very trusted real estate source over there. And he says that the Miami condo might not fully recover until 2030 or 2032. And I think that's a pretty accurate assessment, guys. We're already halfway through 2026 and things are just now starting to become a real problem for condo owners. And it's not going to get better anytime soon. A lot of these buildings are going to have to be fully restored and a lot of assessments paid and the budget on track and maybe reserves finally getting fully funded to have the true price discovery of what these places are now worth. And if any buyers are even willing to touch some of these buildings. And the ones that can't make it through that process are going to be the buildings that are going to get shut down. They're going to fail inspections. They're going to get condemned and they're going to be bought up by developers. And you're going to see places that used to cost half a million dollars get replaced with four to $10 million condos because that's what's happening all over right now. But the good news is, there is good news here, is that if you are a condo buyer, now is actually a pretty good time to be in the game. You have a ton of inventory to choose from. There's more transparency now with all of the dealings going on with any given building. You have access to more information than before so you can make the most educated decision that you've ever been able to make. And at the same time, prices have been dropping like a rock. That three and a half percent decline is just the median guys, but I've seen many examples of places taking huge, huge price cuts. Condos that were once a million dollars are selling for 600K. That's a 40% discount, but it comes with a major warning. You need to make sure if you're the buyer, that the building has been structurally inspected and the work has either been done or is being done right now. And you need to confirm that the condo association has adequate reserves. Doesn't have to be full reserves because that's not a legal requirement yet, but also look into what is it going to be when it is full reserves? Because that means your HOA fee is guaranteed to go up from whatever it is right now, probably by a sizable amount. But like I said in the beginning, owning a condo now basically makes no sense because it is so much cheaper just to be a renter in general right now than any type of homeowner, but specifically a condo owner, because of how many additional expenses there are with owning a condo these days, guys, it really doesn't add up. It really doesn't. Even like myself, I'm stuck just like everybody else. I could sell right now and still technically make a profit because I got my condo for such a good price, but I will be leaving a lot of money on the table versus if I just waited until the condo market did fully make a recovery and all the building work is done and property values recover. I could be potentially losing hundreds of thousands of dollars by selling now, so I'm not going to do that. But in general, it is a much better decision right now to be a renter of any condo than to own it because it is significantly cheaper than owning. You're not going to be on the hook for any of the special assessments, the HOA increases or anything like that. And best of all, because there's all these ongoing maintenance projects with these condos, if you're renting a place and this starts, you can just move. You move to a building that's not going through this and that's it. You're back to having your peace and quiet and not having any trouble with that.