Condos that were around when the Hurricanes lost a national championship game to the Nebraska Cornhuskers in the Orange Bowl are flooding the South Florida market.
That was 30 years ago.
Gasoline was about $1.17 a gallon and the average condo sold for about $57,000, or $120,000 today adjusted for inflation.
Average condo prices are a lot higher than that now, but they have been falling as more properties hit the market looking for buyers.
There is a crush of condos built in 1994 or earlier for sale in South Florida — almost 18,000 condos of that vintage were on the market in the second quarter. About nine of every 10 condos for sale in Miami-Dade, Broward and Palm Beach counties dates back to at least 1994, according to real estate sales and marketing firm ISG Worldwide.
"What we've seen in the last 12 months is a rush to sell by the owners of those condos," said ISG Worldwide CEO Craig Studnicky. "That's met with a lack of rush from the buyers who want to buy that stuff."
Condominium prices across the region have fallen back to about where they were in February. They have dropped for four straight months through June in Miami-Dade County. Broward condo prices have fallen for three out of the past four months. And they fell in Palm Beach County from May, according to data from the Miami Association of Realtors.
The lower prices come as the number of condos for sale has skyrocketed. In June, the number of condos listed for sale in Broward County was more than double from a year ago. And it's taking longer to sell a condo — the average is about three months across the three counties.
The number of condos for sale in South Florida has been growing steadily for the past year. It has almost tripled in the past two years. All of the increase between the first and second quarters of 2024 is from buildings that were built before 1994.
One big reason?
Surfside.
The early morning partial collapse of the Champlain Towers South building in 2021 killed 98 people. It led to a series of condominium reforms passed by the Florida Legislature. Two of the more significant changes for condo owners are a mandatory structural inspection and increasing reserve funds for condo associations of buildings at least 30 years old.
"The buyers who are moving to Florida are specifically asking, 'Realtors, don't take me to one of those [older buildings],'" said Studnicky. "Those would be a building that is more than likely going to get tagged with a special assessment. 'Bring me somewhere new,' [they're saying],'" he said.
ISG Worldwide Craig Studnicky on the balcony of Circ Residences in Hollywood. The building was built as an apartment building in 2019. It's developer is now selling the apartments as condos.
Studnicky spoke to WLRN from the living room of an apartment on the 20th floor at the Circ Residences on Young Circle in Hollywood. Its balcony looks east toward the Atlantic Ocean. The building hopes to benefit from buyer worries about older vintage condos. The Circ was built in 2019 — "a puppy dog by construction standards," said Studnicky.
In February, its developer decided to change course and sell its 386 apartments as condos. Studnicky's firm is leading the sales effort. Prices range from $450,000 to $1.3 million. Two-bedroom, two-bath units range in rent from $2,200 to $3,100 per month. Studnicky said many buyers of the condos are turning around and renting them out.
The market certainly is showing signs of stress for older vintage units. While average sales prices for condos younger than 30 years old have continued increasing, those dating back to 1994 or before have seen price drops. That bucks the trend experienced by most residential real estate in South Florida since the COVID-19 pandemic.
"I hesitate to say the word glut," said FAU housing economist Ken Johnson.
"Imagine yourself as an owner of a condo in South Florida. It's very difficult to sell there. There's uncertainty over future pricing of condos," he said.
Pressure on older condo buildings to turn to rentals
Johnson doesn’t think the big jump in older condos for sale and associated price declines will infect the overall housing market. Instead, he predicts it could lead to just the opposite of what Studnicky is leading in Hollywood, where a recently-built rental apartment building is going condo. Johnson thinks older condo buildings facing increased assessments and a soft market of buyers will look to the rental market.
"I think you'll see a lot of pressure on condo associations to allow for rentals because otherwise you're going to have a property setting empty. You're going to have somebody that can't sell because of the price," Johnson said.
That would require many condo associations to change their rules around renting. It is common for associations to restrict rentals in condo buildings such as limiting the proportion of units able to rent or restricting the number of leases a unit owner can enter into each year. These regulations can discourage a condo owner from offering a unit for a short-term rental through AirBNB and VRBO. They also can make it difficult to have a traditional annual lease.
Johnson acknowledges owner associations would have to become more rent-friendly, and if they do, the changes would increase the number of rentals on the market.
"This will result of an infusion into the supply side of roofs to live under and rent plus roofs to live under and own," Johnson said.
While such new rental supply may benefit those renting, he admitted owners and associations of older condos won't like it.
"It's kind of a zero-sum game," he said.
This story was produced by WLRN, South Florida’s only public radio station at 91.3 FM, as part of a content sharing partnership with The Biscayne Times. Read more at WLRN.org.