The number of condominium units for sale on the barrier island is rising faster than single-family home inventory as state condo regulations passed in 2022 and 2023 take effect.
“The supply is growing for two reasons,” said Douglas Elliman broker associate Sally Daley.
“On the one hand, more condo owners are deciding they can’t afford the higher costs caused by the new laws and are putting their units on the market. At the same time, those same new costs and fear about future costs have diminished buyer demand. A lot of buyers are fearful of the word condo.”
“Countywide, there’s roughly a five- or six-month supply of houses and a nine- or 10-month supply of condos,” said AMAC Alex MacWilliam broker Buzz MacWilliam. “The condo market is softer, and we are watching it.”
“A year or two ago, I’d get 20 showings for one transaction, people browsing,” said ONE Sotheby’s International Realty broker associate Hank Wolff. “Now there are good listings that go weeks without a showing.”
Between Jan. 1, 2024, and Jan. 1, 2025, single-family home inventory in 32963 increased by 70 percent, from 107 to 179, looking at a 90-day average. During the same two-year period, the number of island condos for sale increased 140 percent, from 74 to 178, double the increase in single-family homes.
The gap is smaller looking at a 7-day average, with home inventory up 90 percent over two years and condo inventory up 120 percent, but every measure shows condo inventory rising faster and condo sales slower, with more days on market than single-family homes.
“Barrier island condo sales were down 18.5 percent in 2024 compared to 2023,” Daley says.
Over a longer timeframe, the decrease is greater.
“Looking at the change between 2019 and 2024 is a better comparison with a typical market,” says Wolff. “In 2019, 32963 had 252 condo closings; in 2024 there were 179 closings. That is a slowdown of 29 percent,” even as more units are being listed.
As most readers are aware, the current condo conundrum started at 1:22 am on Monday, June 21, 2021, when a poorly built and badly maintained 1981 condo building partially collapsed in Surfside, Florida, killing 98 people.
Lawmakers rushed in their next session to pass legislation to better regulate condo upkeep and safety, producing SB-4D, signed into law in May 2022, 11 months after the collapse of Champlain Towers South.
Like the ill-fated, 12-story condo, the 88-page law was poorly built, causing confusion and unintended consequences, including the prospect of sudden, crushing expenses for many condo owners on fixed incomes.
A fixer bill, SB-154, was rushed through in the next session to clarify and change the requirements set out in the first bill. It was signed into law in June 2023.
But condo owners and associations, while agreeing that better oversight is needed, say there still are serious flaws in the law.
Gov. Ron DeSantis has called a special session of the legislature for Jan. 27, in part to try and fix the problems caused by SB-4D, but Republican leaders in the House and Senate say the action is premature, since DeSantis has put forth no plan for a fix and there is no proposed bill for them to vote on.
As it stands, the law requires most buildings three stories or higher and 30 years or older to get a milestone inspection from a licensed architect or engineer that catalogs the structural condition of the building.
These can run tens of thousands of dollars, with costs increasing along with the size and condition of the building or complex, especially if structural defects are discovered.
Even more onerous for condo owners who must foot the bill, associations are required to complete a Structural Integrity Reserve Study (SIRS) if their aging complex is three stories or taller and within three miles of the coast.
This entails another expensive inspection and estimate of repair costs for any needed or anticipated fixes.
Based on the SIRS, condo associations are required to impose special assessments on condo owners to fund a reserve to pay for current and upcoming repairs and building component replacements.
On the barrier island, that has led to special assessments close to $100,000 per unit at some complexes, according to island brokers.
In Vero, several condo complexes have joined the Treasure Coast Condominium Alliance to push back on what they see as unreasonable funding requirements.
“They are pricing us out of our homes,” Mark Shea, president of the Robles del Mar HOA, a member of the Alliance, told Vero Beach 32963 in September. He noted that many seniors living on fixed incomes will not be able to afford the extra costs.
Even for those who manage to hold on to their homes, he said, their property values will be seriously affected since anyone contemplating buying a condo will take a looming assessment right off the top of the purchase price.
Darlene VanRiper, who helped found the Alliance last year and lives in the Harborage Condos in Stuart, told WPTV in October that the SIRS engineer recommended $6,480,000 worth of repairs to her complex, which would cost residents on average “an extra $3,000 more per resident every month.”
Condo owners who don’t want to or can’t shoulder those kinds of additional costs, which come on top of rising insurance rates, are listing their units for sale, while buyers are fearful of taking on high or unknown expenses.
So condo inventory is rising.
But the condo news isn’t all bad.
The bottom hasn’t fallen out of the market. Daley says the average sales price of a 32963 condo in 2024 was $1,073,000 compared to $965,000 in 2023, due in part to sales of new, high-dollar oceanfront condos that push up the average.
Many condos in Vero are not subject to the recent legislation and most of the buildings here are in much better shape than Champlain Towers was on the day of collapse.
“There are still closings on condos every week,” says Wolff. “Each association is different from the next and buyers can ask sellers, condo boards and property management companies if there any upcoming special assessments or large projects,” to protect themselves and get a clear picture of what they are buying.
“Real estate has always been driven by motivation,” says MacWilliam. “If the buyer wants to buy or seller wants to sell, they will negotiate and get the deal done.”
Daley says the new inspection and disclosure requirements in SB-4D are a big benefit to buyers.
“The buyer is getting this giant, super-expensive inspection that you couldn’t do as a unit owner or buyer. Nor would you want to pay for it. You are getting an extraordinary level of due diligence that far supersedes a typical home inspection. Buyers just need to be educated to see that this reduces their risk in a condo purchase.
“Information was murkier before. You may have been able to see capital funds in the bank but had no idea what expenses might be in the future. Now you have an engineer’s or architect’s professional report on the building and a professional calculation of what operating expenses and HOA dues will be going forward. Under the new law, you can even see HOA board minutes to hear all the chatter.
“Buyers can now go into a negotiation with far more information than before, so that their eyes are wide open, and they can make realistic financial decisions.”
Daley thinks the value of having a clear picture of a building’s condition and future is so great that even buildings not covered by the new regulations should complete the SIRS inspection and report.
“It helps the building in terms of perceived value and desirability, she says. “It is kind of like a house that is renovated and move-in ready compared to one with a lot of unknowns. I think buildings that chose not to get the inspections are going to pay a price in terms of days on market and the values they are able to sell for.”
Even if the SIRS report bumps monthly dues up from $500 to $1,000, the condo may still be more attractive to a buyer than a house when all the numbers are crunched.
Per-square-foot prices for home on the island are 40 percent more than for condos, $689 compared to $479, according to the latest data from Douglas Elliman. So a higher monthly carrying cost can be justified for many buyers.
Carrying costs for single-family homes are going up too, with rising insurance rates, maintenance costs and property taxes.
If a buyer can get 2,500 square feet in a condo for 40 percent less than in a house, higher monthly costs can make sense.
Daley says it’s also important to realize that the island market is made up of multiple mini markets defined by price range, location and specific complex.
Some island complexes have onerous cost increases coming down the pike, but others are less affected by the new, still evolving regulations.
Either way, buyers can now see more clearly as they go into the transaction and seek to buy at a price that makes sense to them.
Sellers will reap benefits too, especially as the law is corrected and refined.
“For those who ride it out and absorb the extra costs, they will end up with a stronger, more valuable building,” Daley says, noting that clarity and transparency about a building’s condition add value to condo properties by making it easier for buyers to feel confident about a purchase.
Many who decide to sell their island condos will be cushioned by substantial equity built up during and before the pandemic property boom.
“Even with new costs and assessments, sellers with a low cost basis are not in bad shape,” MacWilliam says. “If you bought your condo 10 years ago for $300,000 and it’s now worth $900,000, you have room to be a little more flexible, more negotiable.”
That wiggle room allows buyers who want out to shoulder the cost of an upcoming assessment or otherwise meet a buyer’s demands while still walking away from the closing table with a large check.
“Those who have the luxury of a lot of equity can afford to price in a compelling way to offset any negatives,” Daley says.
“Costs associated with the recent regulations are hindering condo sales somewhat,” MacWilliam says. “But where there is a will, there is a way. Buyers and sellers can negotiate based on many factors, including what is happening with reserve requirements.”
“This is still a great time to buy a condo for someone who wants that maintenance free lifestyle and has all the relevant information about the building,” Daley adds.
By most accounts, Tallahassee bumbled its first attempts to create needed safety regulations for condominium buildings, but the legislative process is ongoing. Condo owners want an appeal process to challenge engineering reports and the ability to spread costs out over a longer period of time, possibly via interest-free state loans to cover repair expenses.
When the dust has settled, the new laws may well be a net benefit to the owners of Florida’s 600,000 condos, whose lives were so powerfully impacted by the failure of a single poorly built and maintained building in South Florida.
