The Condo Crisis in South Florida: Financing Roadblocks, Rising Fees & Market Slowdowns

by Joanna Maud

The South Florida condo market is facing serious challenges, making it harder for buyers to secure financing and for sellers to move their properties. Between special assessments, unexpected repairs, skyrocketing HOA fees, and stricter lending requirements, many deals are falling apart at the last minute.

 

If you’re thinking about buying or selling a condo, here’s what you need to know about the current situation and how to navigate it.

 

The Big Issues Facing Condo Owners & Buyers

1. Financing Roadblocks – Fannie Mae and Freddie Mac are increasingly refusing to finance condos with pending repairs, even if no special assessment has been issued. Condo questionnaires are frequently coming back incomplete or with red flags, leading lenders to deny loans.

Example: I had a listing under contract and we were almost at closing when Fannie Mae denied financing due to upcoming repairs. The seller had no idea these repairs were planned—no assessment had been issued, no work had started, and six months later, we still don’t have a timeline. The sale fell through, and we had to rent the unit instead.

2. Delays in Required Repairs – Many condos are stuck in limbo, waiting for necessary structural work to be completed before lenders will approve financing. Even if a buyer is willing to wait, these repairs can take months.

Example: I worked with a buyer who had to delay closing for four months because the building’s roof repairs had to be completed before the lender would approve financing.

3. Rising HOA Fees – Monthly maintenance fees are increasing rapidly as buildings try to fund necessary upgrades, adding to the already high cost of homeownership in South Florida. Many buyers are getting priced out, especially in luxury markets where HOA fees can rival a mortgage payment.

4. Properties Sitting on the Market – With financing challenges and rising costs, many condos are taking much longer to sell. For sellers who need to cash out in order to buy their next home, this creates serious roadblocks. Investors, at least, have the option to rent their units out, but that’s not a solution for everyone.

 

How Buyers & Sellers Can Protect Themselves

 

Given these challenges, here’s what buyers and sellers can do to avoid costly surprises:

• Hire an experienced agent who knows the right questions to ask. Many sellers don’t even realize their building has financing issues until it’s too late. A knowledgeable agent will investigate before you get too deep into the process.

• Look for buildings that have already been renovated. If major work has been completed and reserves are solid, you’re less likely to run into financing issues.

• Ask about reserves and upcoming assessments. New laws require condos to maintain reserves, but many buildings are still playing catch-up. Buyers should ask for a breakdown of financials before making an offer.

• Be prepared for higher HOA fees. If you’re budgeting for a condo purchase, factor in potential increases in maintenance fees.

 

The Bottom Line

 

The condo market in South Florida is changing fast, and buyers and sellers need to be prepared. Financing restrictions, repairs, and rising costs are making transactions more complicated than ever. Whether you’re buying, selling, or investing, having the right information (and the right agent) is key to navigating these challenges successfully.

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Joe Bryan

Pack Leader | License ID: 2017002960

+1(314) 210-6540

1215 Cypress Dr., Ofallon, Missouri, 63366, USA

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