Why many potential buyers have been scared away from Florida's condo market
Fort Lauderdale, Florida — Mayra Villalona is sitting on what she thought was real estate gold.
She bought a two-bed, two-bath condo near Fort Lauderdale in 2021 for $145,000, hoping to pounce on pandemic-era real estate prices.
"This is really a great community to live in," Villalona told CBS News. "It's just to me, for me, it's not an investment right now. It's not a good one."
Villalona's condo has been on the market since last November. Despite spending $20,000 upgrading the kitchen and the bathrooms, she has seen virtually no potential buyers. She has lowered the price twice with no luck. It is currently listed for $255,000.
"Because it wasn't moving…And…I wanted to sell it," Villalona said of why she lowered the price.
In an already challenging U.S. real estate market, many South Florida condo owners cannot sell because some buyers have been scared off from a surge in special assessment fees that are used to make safety upgrades to older condominiums in response to a new state law passed following the 2021 partial building collapse of the 12-story Champlain Towers in Surfside, killing 98 people, one of the deadliest building collapses in U.S. history.
Older buildings, like Villalona's that are three stories or higher, are now required to increase inspections and build up a reserve to fund restoration projects. Fees are paid by the homeowners, which can range in the tens to hundreds of thousands of dollars.
Villalona says her fund restoration fees have increased "three times already" because of the law, from about $20,000, to now over $50,000.
"Well, it used to be 20 and then they went to 35, and now I owe over 50," Villalona said.
In hindsight, would Villalona have still bought the condo back in 2021?
"Probably not this one," she said.
Brokers told CBS News that mortgage giant Fannie Mae has compiled a list of 1,400 condo developments across Florida that are considered high-risk to secure a mortgage because the buildings are either underinsured or have overdue repairs making them harder to sell.
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