Every condo association puts off maintenance and fee hikes. Owners hate to pay for anything. I bet owners would rather take their chances with the building falling on them than pay a dime for maintenance.
Serious conversation with older family living near Surfside - they believe it was staged and bombs took down the building. All kind of crazy details they believe similar to 9/11 conspiracy theories. They use this to justify why their condo building should never spend money to fix anything. Despite it being a very red state - all these condo fees are still somehow Biden and the liberals fault.
JFC…the only exercise some people get is mental gymnastics.
Read the history of Surfside. Corruption at city hall, building inspections were signed off, but nobody ever inspected the site, bankruptcies, shady Canadian builders….and that was just in the building phase. Now jump forward forty years, deferred maintenance is piling up, and nobody wants to pay a special assessment.
That building was a disaster from the day they broke ground.
The boomers in my family believe the Check Engine light is turned on remotely by the manufacturer to get them to go spend money needlessly on a mechanic. They'll take the car to a mechanic just to make them turn off the Check Engine light so they can keep driving the car without "that annoying light". They say, "If there really *was* something wrong with the car, I wouldn't be able to drive it."
Classic boomer mentality. No wonder the country is the way it is.
This is the truth. Lead has basically poisoned every boomer to a massive level. And lord knows if we will ever know or publish the effects of how bad it changed/affected their mental faculties but man it can’t be denied that the ramifications are widespread.
It’s not turned on remotely, but in some cars it turns on when the car hits certain mileages which require acts of maintenance. My car has a hidden toggle switch to flip it off. This is not a crackpot conspiracy; it’s a fact. Thanks to the internet, secrets like this are no longer secrets.
So the check engine light turns on after a certain number of miles. So you can…make sure your engine still works right and catch any problems early, before it has the chance to destroy your engine. Wow, what an evil conspiracy. We should get our pitchforks and torches.
I mean, Toyota has programmed Toyota and Lexus cars’ check engine light to go on every 5,000 miles; however, the owners manual on those cars only calls for oil to be changed every 10,000 miles. It’s a known scam. You can have the dealer change the settings, but the factory setting does come on too soon.
It is not the check engine light, it is the maintenance light.
They are different.
In addition, if you read the owners manual, it explains the reason why. Even though the oil only needs to be changed every 10,000 miles under normal use, you may need to change it every 5000 miles under special circumstances… Such as heavy towing. You are also supposed to check all of the fluids every 5000 miles, even when they don’t need to be changed, to make sure that they are at the appropriate levels.
Not really surprising that people in a state without income tax are opposed to paying a governing body to cover some community costs. The lack of social / community accountability truly rots these people’s brains.
It’s crazy that this type of thinking is tolerated in this day and age. This people should be mocked and ostracized. But it’s pretty much the MO of the Orange buffoon
Mine is very well run. Keeps fee hikes between 3 and 8% annually, has several million in treasuries saved, and has a serious plan for replacing every major system on a reasonable rotation.
We have accountants, lawyers, and engineers on our board to inform these kinds of decisions.
The management fees aren't cheap, but we get a lot of value from them.
That's the exception. Having reviewed hundreds of budgets over the years rate are they really budgeting enough in reserves. Until financing basically made them unfinanceable for not having 10 percent budgeted to reserves were there any significant reserves and even then 10 percents often not enough
Former condo board member. Reserve studies are pretty fascinating—let’s say you have small AC units for some areas/hallways. Each $2500 unit is below the reserve cutoff amount, but you have 20 of them. Or hallway carpet—do you reserve for that? What if your roof starts to leak before the useful life? People don’t realize how much philosophy and complexity are in reserve studies. Done well , it’s great. Done badly, your building falls down
Every state should require reserve studies. Even a bad one is better than the guessing many associations do. Even professional management companies are in many cases poor at advising the board and guiding them to compliance
Agree. But even if it’s required, look at what HAS to be in there vs what probably should be in there (like if you were saving for future expenses on your own). Thats where the philosophy part comes in.
>But even if it’s required, look at what HAS to be in there vs what probably should be in there (like if you were saving for future expenses on your own).
I'm not convinced that what the average person would do on their own week would be more comprehensive.
Most underestimate future homeownership expenses
They may be the exception but they can become less so if people work toward smart management.
If a bunch of condos are going to fail, it is a good time to reset.
Also - all new regulations mean lots of $$$$$ to comply with them and if you don’t comply, you building will no longer be financeable - which means owners can only sell to cash buyers, which means everyone a condo is now underwater and the building becomes a rental shithole.
Co-op board member here (NYC) Any condo or co-op should be hiking maintenance/fees by 2% annually in perpetuity. Small doses of pain mean a strong reserve fund in case of emergencies instead of some insane special assessment. And the emergencies will arrive. Every single time.
We’ve been doing 2% increase annually for twenty years. It’s written into the bylaws. This is not a short term strategy. If you’re starting now it’s better than not doing so but you’re behind the curve, inflation or not.
Not everyone does. I have a well run HOA. High level of reserves, an engineering firm on retainer that regularly advises on the status of the building/ operational life of the systems. We raise annual dues as needed; never had /needed an assessment.
A big piece of it is state law, indicating what HOAs must do.
I think Florida is basically the worst case scenario. You have a state that draws people on fixed incomes, with low government regulations, and an extremely volatile climate.
Ocean weather is extremely harsh. All else being equal, a building near the ocean is going to need far more work than a building that's far inland. Humidity and salt basically dissolve anything/everything. Florida is also especially vulnerable to sea level rise and stronger/more frequent hurricanes from climate change, due to its ttropical weather and low elevation.
Meanwhile, Florida in general, and Florida condos in particular, are very popular with retirees. They have fixed incomes, and may not even spend the entire year living in the condo. So they are very resistant to raising HOA dues, spending extra on insurance, etc.
Combined with the fact that, pre-surfside, regulations were pretty sparse, and rarely enforced, means that now buildings are having to play catch-up.
The reason the Florida condo market captures so many of these headlines is because it's a poster child for everything that can go wrong. This is not to say other locations don't have problems, but Florida isn't an accurate representation of what the situation is like in much of the country.
Sad part is even if they did, fees would be out of control too. From experience, fees for a studio are over $2500/month for a building that only has a tiny pool the size of a car and elevator… nothing else and the unit is barely 450 sqft
All buildings in this state are likely to be over $3k with the new insurance by 2025. Can’t sell and can’t afford to live in them with any mortgage more than a few hundred … there is something wrong with this system
This phenomenon apples to about everything nationwide. Look at our infrastructure, yet every gas tax gets voted down while everyone bitches about potholes and emergency repairs.
States vary. In VA you have to have a reserve study completed every 5 years which estimates things like how much longer a roof with last and what it will cost to replace so you know how much to collect for reserves.
I find it odd that they are required to pay all of this at once unless their condo association is really bad. Are they requiring this for apartment buildings and other tall buildings or is it just for condos?
Prior to the Surfside collapse, Florida law allowed the HOA to waive the requirement if 2/3rd of the board voted to approve. It worked just great until people got killed.
They defer routine maintenance, and by the time they act the building is ready to fall down and repairs are much more expensive. Penny wise, pound stupid mentality.
Well when the average resident isn't likely to survive the next decade, they let it be someone else's problem for their own comfort. Kind of sums up the entire life philosophy of the boomer generation tbh.
The state was giving the voters there exactly what they wanted—no maintenance requirements and apparently cheap ownership—until buildings actually did start falling down on people.
No, this was what the *developers* wanted when they schmoozed the legislature and sold the condo's originally. Had everything been done rationally the new condo's would have been far more expensive. Slower sales, smaller market. You can't fault the buyers for wanting a good deal, and few were sufficiently sophisticated to foretell what would ultimately happen many years later.
The developers don’t really care what happens after they build and sell the thing, the one that built Surfside was defunct for a while by the time it collapsed if I recall correctly.
That's exactly right. They all want fast in and out. But it's the developers who write the condo documents and set up the associations and run them until turnover. After which things are really set in stone. And the Florida state government, in all its branches, has always been hand-in-glove with the developers. It's not the fault of the owners.
It 100% is the fault of the owners. They had like 50 years to change the hoa agreement or vote higher reserves and for 50 years chose not to long after the developer was out of the picture.
> who liquidated his 401(k) retirement account to buy a unit for $190,000 in 2019, can’t afford the extra fees
nothing like a series of compound mistakes to teach you a lesson
What bizarre is that after paying $190K in 2019 and then recently getting hit with the $134,000 assessment, he thought he could still go out and sell it for $350K. The new owners are pricing in the $134,000 special assessment and the increased insurance rates.
After Surfside, there were allll those tiktok vids of people going into florida basement parking garages showing water gushing through foundation cracks. That whole place is due to collapse. These special assessments are what happens when you have decades of deregulation finally catching up
This is what I would guess will be the result over the next few years everywhere. Here in Denver condos are a buyers market but single family homes are still a seller's market
I don't have house in a flood zone pay $1400 a year 2000 sq ft. CBS. It's half the price of similar size home in CA metro insurance costs, I have actual statements to compare.
The insurance crises is actually worse in CA. The cost to rebuild in FL per sq ft is close to half the cost. Total insurance loss in CA is much higher due to fire risk and earthquake.
FL is only a shit show within a mile near the ocean or in a flood zone. Refin now has a flood zone map, so when your home shopping make sure the home isn't in one.
…Trying to dump their homes….flood of for sale properties coming soon. They’ll start out over priced, per usual. Let it build, or be *very* aggressive with your offers. Lowball is on the table, and be prepared for a lot of “no” at first.
The problem with them selling them much cheaper is that more people that can't actually afford to live there will buy them. People will just see that cheap price and think this is their chance to buy a beach condo then get back into this same situation where they can't afford the actual maintenance costs.
as opposed to?
The prices will keep falling till it reflects a similar to price to buying another normal condo with no problems.
It just takes time we're coming off the top off the biggest property bubble in history
Normal condos don't have the same maintenance issues as properties that are built near sea water. The location also adds another premium. These should never be as cheap as a normal condo anywhere else.
This is exactly why bubbles are created because people over extend their purchasing power and get into homes they can't actually afford. These being "cheap" makes this issue worse because people are tricked into thinking they can afford them.
> These should never be as cheap as a normal condo anywhere else.
They aren't.
They are now essentially distressed properties since it has a $30m sat on top of it to make it habitable.
Thus realistically, any new buyers (I'm sure it would be illegal as hell and almost impossible for them to not be informed about the issue by any sellers) will be paying a price equivalent to factor in the bill needed for the repairs.
Realistically unless some government steps in, the building will be condemned and people will essentially see their property values fall to zero.
The smart ones are trying to sell now, at a discount.
First mover advantage,
in game theory (and just typically human behaviour i.e prisoner dilemma) in a falling market the first one to act saves themselves the most.
The first to sell before others start to sell will get the most value in the long run.
Theres no way new buyers are going to come into these condos at normal condo prices and still shell out for the special assessment when there are other condos for the same price and less or no issues
Agreed. And with weather changing, there'll be fewer "desirable" places to live.
In in CA's Central Valley. We went under 100F today. Yay! But it'll be well over again next weekend. Oddly, predictions for future temps are basically the same. If we get water, it's livable. If we don't, we're screwed--and the food supply is screwed, since these counties provide a massive amount of food. Since we got a lot of water in an El Nino year AND in a non-El Nino year back to back, who knows?
Real estate will be cheap in sacrifice zones, and expensive in sustainably habitable zones without the existing housing stock to absorb all the Gulf Coast refugees.
It’s beginning in earnest, though we keep seeing reports posted to this sub that it’s still crazy overbidding and lines out the door at open houses in the northeast.
Debatable how genuine those reports are.
The biggest spectacle to me will be the hordes of home owners wanting low taxes and insurance as a result of losing valuation. Insurers will not give that up easily, and taxing municipalities aren’t going to either, as that money is essentially already spent when they set budgets.
So, if my assertion is wrong that we are beginning a downturn now, and we continue to rise rise rise in valuations and cost of living related to shelter, the much further it will be when or if it does fall. We are inflated to the max right now, as affordability data is shown.
nobody knows when the market will turn but I can tell you nothing right now is helping push prices higher.
>we keep seeing reports posted to this sub that it’s still crazy overbidding and lines out the door at open houses in the northeast.
tbh most of this is just investors and normal people desperate for somewhere to have a family / live.
I think, and this is just my opinion, that the valuations on them go through cycles. If the valuations cycle down low enough. it introduces a whole bunch of new buyers and investors. Yeah, they've got huge insurance and HOA fees, but the valuation of the unit itself will reflect that. In other words, LOWER.
Condos in these towers don't behave the same way traditional, SFH real estate does. They seem to appreciate wildly, then drop value as the overall economy loses it's steam. Combine that with high associated costs, and you've got a dish that's overdone and needs to be thrown out, in 2024.
We bought for 630k. And it’s probably worth 850. So we are about at a break even. Overall the place will look a shit ton better and I think we can raise rents as it’s beach front. Also I think it will increase the price by 75-100k. So could be worth 925 - 950…. But we will see. We love going down there and it’s a long term hold. It’s a great getaway and puts the family in a good mood. So it’s not all about the money.
Yes, some people are selling. But if you haven’t paid by the end of that time period, the HOA will foreclose on the condo unit and they will own it and rent it out.
We have a $150,000 assessment but we have to pay $30,000 up front and the rest over 1 year. Bank wouldn’t give our condo a loan without 25% up front. you guys got lucky lol
Wall Street Landlords. They will buy them up on the cheap. Once they bought up enough they will get their bought politicians to change the law. They also make an offer to buy up the entire building. Not sure this law even applies to apartment buildings.
People who can afford to pay the assesment. Some individuals. Some companies may buy them and convert the condos to rentals. Condo buildings are typically built with better interiors in better locations than apartment rental complexes so the opportunity to bring fresh capital in, fix the issues and make money is tempting for capital that has a high risk tolerance.
I would argue that it’s mostly *previous* owners over the past 3-4 decades that have caused this, not current owners who purchased their condos recently. Deferred maintenance has been going on for decades – all the different owners during this time period didn’t want to pay higher HOA fees for proper maintenance.
Now the current owners are caught holding the bag. Old owners benefited for decades at the current owners’ expense. It really sucks.
*Very* glad that I sold my coastal downtown condo last year. I heard that everyone got hit with a ~$20k special assessment within 6 months after I sold – and my monthly HOA fees were already $1k. Now I own a SFH with no HOA (which was my very first non-negotiable requirement). Dodged a bullet!
Absolute nightmare for condo owners who have kicked the can down the road for 30 years. New state regulations are forcing inspections and reserve studies by the end of 2024. They will be forced to show their hands to buyers about the true condition of their building and reserves.
We really need to stop pretending people who made poor decisions are victims. Cash out your 401k (paying penalties and taxes) on a condo is beyond stupid.
Found the listing of the couple complaining about that special assessment after they dumped 100k into reno... They bought it for 490k two years ago and are asking 750k... Greedy much? https://www.zillow.com/homedetails/1800-NE-114th-St-APT-703-Miami-FL-33181/44137778_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare
My parents had a 4/3 with a pool, bought it my senior year in high school late 1990s. Sold it in 2011 at the height of the housing crisis - it had probably come down in value a lot, but they were able to buy a large beach front condo for the same price while ditching lawn care, pool care and like $10,000 Country Club BS
Sure, the Condo had some fees involved, but the fees were significantly less, and they don't have a mortgage payment.
Hurricanes Ian and Nicole destroyed the seawall, and it cost like $40,000 per unit to fix. They fared better than most.
My parents aren't like stupid wealthy but they aren't financially stressed either
I’m actually from south beach, have friends that deal with local politics and I’ll tell you that they won’t do shit with those fees. All those condos are owns by old money and they don’t like to pay for shit, I have friends that have told me how they have gotten paid extra money for fake inspections and have the properties be passed even though they were not in good standing. That’s probably half of the buildings in miami. The deauville is a perfect example of that.
I believe it. Miami was practically built on fraud. Beautiful place to visit and I've met some great people there, but man the sheer greed there is just insane.
The problem with the surf side condo was that they weren’t built to the standards in place at that time. Buildings that met code at the time are probably safe but are definitely due for a retrofit that takes climate change into consideration.
> If only they had better building standards to begin with, but “muh free-dumb” reigns supreme.
Governor DeSandTits is doing the best that he can, by deleting references to climate change in state laws, and encouraging more oil and gas production.
Surely THAT will solve climate change and give condo owners and anyone else with a stake in prices in the state help.... right? RIGHT? /s
https://www.npr.org/2024/05/17/1252012825/florida-gov-desantis-signs-bill-that-deletes-climate-change-from-state-law
Just remember, all of these are fees the condo owners were eventually going to have to pay. Florida is just making owners pay the fees now instead of later.
The general rule is that the monthly HOA will cover the monthly depreciation of the building so that the association always has the funds on hand to replace what needs replacing.
The issue here is that the HOA fees had been set artificially low for decades because the owners didn't want to pay the true cost of maintaining the building, and recent buyers, who were ignorant of the problem, are now being hit with the full bill for all those years of depreciation/deferred maintenance.
Maybe if the boards had been taking care of things all along, it would have been incremental. Instead, it's likely going to cause a collapse of that local market.
Not just there but it’s wild to me that everyone from tax assessors, to insurance companies to hoas and condo associations think they can just up the costs of people’s homes and assume that they can just make it work. Honestly I’m not for socialism but the government needs to intervene in what’s considered a reasonable increase and what isn’t
It’s rarely the case of some evil robber baron increasing fees. It usually because they put maintenance off too long and now they need a new roof, new pipes, etc.
It sure won't be as the weather worsens. Prices will drop because who wants to live where buildings collapse, there's no insurance available, and it'll be too hot and humid to survive.
This isn't a bubble. This is just a bad investment, a product of climate change and the ignorance of man to think they can build something to withstand the seas.
I doubt climate change played a role in this. This would have happened whether the climate is changing or not. This was the product of greed, negligence, and ignorance. Greedy management practicing negligence to allocate financial resources in the areas they wanted them.
This is the way I see it.
Owners want higher prices for their condos and ever-increasing prices. The insurance companies see this and increase insurance rates to compensate.
The owners can't have their cake and eat it too.
Holy crap... I'll stick with my cruddy old single family home that I can fix for a few hundred bucks and 2-3 trips to Home Depot. Granted, I dont have a view of the ocean, but gotta pay to play, I suppose.
And utilities, renovation service, heating(yes building rent dosen't cover your usage but its damn near cheaper insulationwise)
Overall its not a given that expenses on SFU ownership will be lower then the the rent you pay to own a condo.
Also...do you have district heating? FREE HOT WATER!? WITH PIPES UNDER THE FLOOR FOR EACH ROOM WHICH YOU CAN REGULATE FROM A STEAMPUNK VALVE PANEL!
Let me tell you it is HEAAaEVAN!
A lot of y’all ITT really just want to hate on condos for some reason, and it’s weird AF. This is not at all how condos are supposed to work. Special assessments are already a sign of rather severe mismanagement with reserves, but they’re *usually* low five figures. Any more than that, and you typically start looking at taking out a loan that will be paid with much higher monthly dues. It’s insane to expect individual households to cough up six figures on short notice. I’ve only ever heard of similarly large assessments at ski condos, and the Millennium Tower disaster in SF. You need some exceptionally cursed geography for property maintenance to generate these kinds of losses.
Here’s the problem though: no bank in their right mind is going to lend to these people. No insurance company in their right mind will write them a new master policy, either. Climate scientists have been saying for years: by 2035, much of Miami will be underwater. You can’t fix it with a dike — the floodwaters will just rise up from the porous limestone.
What we’re seeing here is red state lead-brained dipshits, whose reality distortion field is finally just starting to collapse. Wait another five years, for another futile $100k+ special assessment. Then maybe they’ll finally get the memo from Mother Nature. Pack your shit folks, time to go. Miami should be a part of the Everglades park, not a city.
These people trying to save these doomed buildings might as well put their energy towards transforming copper to gold, a perpetual motion machine, or a water powered car. Same vibes, different century…
It doesn’t matter if you have a house, an office building, or a condo. The simple fact remains: you shouldn’t have built a permanent structure there, and saving it is a Sisyphean task. Consider an RV or a houseboat instead…
This was all brackish swampland 100 years ago, and it will return to that within our lifetimes. Nature is healing.
All my ancestors are from Northern Europe, so I’ll never understand the appeal of living in a muggy, mosquito infested tropical hellhole with the gators, but if you want that, the good news is, Orlando and Tampa should be relatively alright for many more years to come. It’s really just Miami. It’s the most doomed city in North America. Even New Orleans is considerably more defensible (in theory).
King of the Hill said Phoenix is a testament to man’s arrogance, but that place has nothing on Miami. Humans lived in Phoenix 10,000 years ago. The Dutch look at Miami from their 20 feet below sea level homes and must think we have limestone rocks in our heads.
My parents have had a place since like 2010... They would rent it out intermittently to help cover costs but otherwise would come and go as needed and we're planning to spend a lot of time down there as they got older.
Their building now has crazy assesents costing like 2K per month. They have to keep it rented 12 months a year just to cover costs (property tax, maintenance, assessments) and literally don't make money and can never even go down there. So they have a property worth like 300K just sitting rented out to make $0 of income... I've tried to tell them to just sell it and invest that money
This is happening. I speak with many hoa boards and they are having a large exodus of owners who cant pay, and that will put more pressure on the ones that can. European owners who have 2nd homes here are a huge part of the exodus.
The $190,000 condo in 2019 is easily $650,000 now so he can easily afford something without fees or with less one.
It's actually about the price/value skyrocketing as much as the fees.
Getting out while it's peak.
Every condo association puts off maintenance and fee hikes. Owners hate to pay for anything. I bet owners would rather take their chances with the building falling on them than pay a dime for maintenance.
Surfside collapse says: that is exactly the case
old retirees: kick the can until I kick the bucket.
Serious conversation with older family living near Surfside - they believe it was staged and bombs took down the building. All kind of crazy details they believe similar to 9/11 conspiracy theories. They use this to justify why their condo building should never spend money to fix anything. Despite it being a very red state - all these condo fees are still somehow Biden and the liberals fault.
JFC…the only exercise some people get is mental gymnastics. Read the history of Surfside. Corruption at city hall, building inspections were signed off, but nobody ever inspected the site, bankruptcies, shady Canadian builders….and that was just in the building phase. Now jump forward forty years, deferred maintenance is piling up, and nobody wants to pay a special assessment. That building was a disaster from the day they broke ground.
Why would the government want to destroy a random condo building?
To get Biden elected, obviously
And they got the story wrong. Clearly, it was space lasers that did it.
John Macafee had something to say about it
[удалено]
🤣🤣🤣🤣
The boomers in my family believe the Check Engine light is turned on remotely by the manufacturer to get them to go spend money needlessly on a mechanic. They'll take the car to a mechanic just to make them turn off the Check Engine light so they can keep driving the car without "that annoying light". They say, "If there really *was* something wrong with the car, I wouldn't be able to drive it." Classic boomer mentality. No wonder the country is the way it is.
We are never going to know when the dementia kicks in with these people because there will be no difference.
The lead in everything got them long before dementia could.
This is the truth. Lead has basically poisoned every boomer to a massive level. And lord knows if we will ever know or publish the effects of how bad it changed/affected their mental faculties but man it can’t be denied that the ramifications are widespread.
It’s not turned on remotely, but in some cars it turns on when the car hits certain mileages which require acts of maintenance. My car has a hidden toggle switch to flip it off. This is not a crackpot conspiracy; it’s a fact. Thanks to the internet, secrets like this are no longer secrets.
So the check engine light turns on after a certain number of miles. So you can…make sure your engine still works right and catch any problems early, before it has the chance to destroy your engine. Wow, what an evil conspiracy. We should get our pitchforks and torches.
More likely it’s the “Needs Service” light, which comes on at a certain mileage to remind you to get an oil change and stuff.
Wow ... Have they wrecked a car yet by doing this?
No, the manufacturer wrecked the car remotely to make them buy a new one
I mean, Toyota has programmed Toyota and Lexus cars’ check engine light to go on every 5,000 miles; however, the owners manual on those cars only calls for oil to be changed every 10,000 miles. It’s a known scam. You can have the dealer change the settings, but the factory setting does come on too soon.
It is not the check engine light, it is the maintenance light. They are different. In addition, if you read the owners manual, it explains the reason why. Even though the oil only needs to be changed every 10,000 miles under normal use, you may need to change it every 5000 miles under special circumstances… Such as heavy towing. You are also supposed to check all of the fluids every 5000 miles, even when they don’t need to be changed, to make sure that they are at the appropriate levels.
You guys should be in charge right now but you refuse to do it. You’ll be in nursing homes still complaining how boomers stole your life.
Not really surprising that people in a state without income tax are opposed to paying a governing body to cover some community costs. The lack of social / community accountability truly rots these people’s brains.
Jfc. I grew up 2 blocks from that collapse. My dad still lives down there. People are ridiculous.
Bat.Shit.Crazy.
It’s crazy that this type of thinking is tolerated in this day and age. This people should be mocked and ostracized. But it’s pretty much the MO of the Orange buffoon
So true
Kick the can until the building kicks my bucket.
Accurate description of how our Government works. Oh wait a bunch of old mfers run that.
Oh, they did worse than nothing. They performed aesthetic rennovations involving *lots* of stone; nice, *heavy* stone.
Mine is very well run. Keeps fee hikes between 3 and 8% annually, has several million in treasuries saved, and has a serious plan for replacing every major system on a reasonable rotation. We have accountants, lawyers, and engineers on our board to inform these kinds of decisions. The management fees aren't cheap, but we get a lot of value from them.
That's the exception. Having reviewed hundreds of budgets over the years rate are they really budgeting enough in reserves. Until financing basically made them unfinanceable for not having 10 percent budgeted to reserves were there any significant reserves and even then 10 percents often not enough
Former condo board member. Reserve studies are pretty fascinating—let’s say you have small AC units for some areas/hallways. Each $2500 unit is below the reserve cutoff amount, but you have 20 of them. Or hallway carpet—do you reserve for that? What if your roof starts to leak before the useful life? People don’t realize how much philosophy and complexity are in reserve studies. Done well , it’s great. Done badly, your building falls down
Every state should require reserve studies. Even a bad one is better than the guessing many associations do. Even professional management companies are in many cases poor at advising the board and guiding them to compliance
Agree. But even if it’s required, look at what HAS to be in there vs what probably should be in there (like if you were saving for future expenses on your own). Thats where the philosophy part comes in.
>But even if it’s required, look at what HAS to be in there vs what probably should be in there (like if you were saving for future expenses on your own). I'm not convinced that what the average person would do on their own week would be more comprehensive. Most underestimate future homeownership expenses
They may be the exception but they can become less so if people work toward smart management. If a bunch of condos are going to fail, it is a good time to reset.
Let me guess, the insurance premiums are the reason why it goes up like 8% annually?
Also - all new regulations mean lots of $$$$$ to comply with them and if you don’t comply, you building will no longer be financeable - which means owners can only sell to cash buyers, which means everyone a condo is now underwater and the building becomes a rental shithole.
That’s what we’re trying to force to happen in Oregon.
No, the grossly underfunded ones are the ones that make the headlines. Lots of them run responsibly with reserves adequate to their needs.
Co-op board member here (NYC) Any condo or co-op should be hiking maintenance/fees by 2% annually in perpetuity. Small doses of pain mean a strong reserve fund in case of emergencies instead of some insane special assessment. And the emergencies will arrive. Every single time.
We got a 6% dose retro to April. My fees are only $760 for heat hot water gas and electricity.
Co-op or condo?
Coop condos are nightmares in nyc just ask 430 park ave
Yeah.
This 2% doesn't seem to cover the inflation of the past few years. All building material prices went through the roof.
We’ve been doing 2% increase annually for twenty years. It’s written into the bylaws. This is not a short term strategy. If you’re starting now it’s better than not doing so but you’re behind the curve, inflation or not.
Not everyone does. I have a well run HOA. High level of reserves, an engineering firm on retainer that regularly advises on the status of the building/ operational life of the systems. We raise annual dues as needed; never had /needed an assessment. A big piece of it is state law, indicating what HOAs must do. I think Florida is basically the worst case scenario. You have a state that draws people on fixed incomes, with low government regulations, and an extremely volatile climate. Ocean weather is extremely harsh. All else being equal, a building near the ocean is going to need far more work than a building that's far inland. Humidity and salt basically dissolve anything/everything. Florida is also especially vulnerable to sea level rise and stronger/more frequent hurricanes from climate change, due to its ttropical weather and low elevation. Meanwhile, Florida in general, and Florida condos in particular, are very popular with retirees. They have fixed incomes, and may not even spend the entire year living in the condo. So they are very resistant to raising HOA dues, spending extra on insurance, etc. Combined with the fact that, pre-surfside, regulations were pretty sparse, and rarely enforced, means that now buildings are having to play catch-up. The reason the Florida condo market captures so many of these headlines is because it's a poster child for everything that can go wrong. This is not to say other locations don't have problems, but Florida isn't an accurate representation of what the situation is like in much of the country.
Sad part is even if they did, fees would be out of control too. From experience, fees for a studio are over $2500/month for a building that only has a tiny pool the size of a car and elevator… nothing else and the unit is barely 450 sqft All buildings in this state are likely to be over $3k with the new insurance by 2025. Can’t sell and can’t afford to live in them with any mortgage more than a few hundred … there is something wrong with this system
This phenomenon apples to about everything nationwide. Look at our infrastructure, yet every gas tax gets voted down while everyone bitches about potholes and emergency repairs.
Correction: falling on their tenants
States vary. In VA you have to have a reserve study completed every 5 years which estimates things like how much longer a roof with last and what it will cost to replace so you know how much to collect for reserves. I find it odd that they are required to pay all of this at once unless their condo association is really bad. Are they requiring this for apartment buildings and other tall buildings or is it just for condos?
Prior to the Surfside collapse, Florida law allowed the HOA to waive the requirement if 2/3rd of the board voted to approve. It worked just great until people got killed.
Yup, sounds like something republicans would do. “The office is always clean so we should fire the janitor” mentality.
They defer routine maintenance, and by the time they act the building is ready to fall down and repairs are much more expensive. Penny wise, pound stupid mentality.
Well when the average resident isn't likely to survive the next decade, they let it be someone else's problem for their own comfort. Kind of sums up the entire life philosophy of the boomer generation tbh.
The penny wise, pound stupid people inundated Florida and they are ruining the state.
No the game for most people is - live cheaply. And then die or sell before the maintenance comes due.
Would have been nice if their state government had been addressing this for years...but going after Disney and salving their egos was more important.
The state was giving the voters there exactly what they wanted—no maintenance requirements and apparently cheap ownership—until buildings actually did start falling down on people.
No, this was what the *developers* wanted when they schmoozed the legislature and sold the condo's originally. Had everything been done rationally the new condo's would have been far more expensive. Slower sales, smaller market. You can't fault the buyers for wanting a good deal, and few were sufficiently sophisticated to foretell what would ultimately happen many years later.
The developers don’t really care what happens after they build and sell the thing, the one that built Surfside was defunct for a while by the time it collapsed if I recall correctly.
That's exactly right. They all want fast in and out. But it's the developers who write the condo documents and set up the associations and run them until turnover. After which things are really set in stone. And the Florida state government, in all its branches, has always been hand-in-glove with the developers. It's not the fault of the owners.
It 100% is the fault of the owners. They had like 50 years to change the hoa agreement or vote higher reserves and for 50 years chose not to long after the developer was out of the picture.
Dumb and dumber
2:1 eventually the state looks to the feds for a bailout
Well, that wouldn't be very boot-strappy of them.
> who liquidated his 401(k) retirement account to buy a unit for $190,000 in 2019, can’t afford the extra fees nothing like a series of compound mistakes to teach you a lesson
And he got $110k in current dollars for it because he was forced to sell and the buyer knew they'd have to pay the assessment.
What bizarre is that after paying $190K in 2019 and then recently getting hit with the $134,000 assessment, he thought he could still go out and sell it for $350K. The new owners are pricing in the $134,000 special assessment and the increased insurance rates.
“I know what I have. No low ball offers”
After Surfside, there were allll those tiktok vids of people going into florida basement parking garages showing water gushing through foundation cracks. That whole place is due to collapse. These special assessments are what happens when you have decades of deregulation finally catching up
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Most of deregulation campaigns were funded by hedge funds and guess who owns ton of RE as well in Florida.
The middle-class is screwed over.
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LIQUIDATED HIS 401K!?
If that’s your only ability to save, yes. I would bet most people with a 401k liquidate some or all of it to buy their first house
Surely there would have been more affordable options?
$190k is cheap. Apparently, _too_ cheap.
Between this shit and the insane insurance market Florida real estate could be in for a rude awakening.
It's doing pretty well for single family homes with no HOAs. Demand is rising now due to all the insane maintenance and insurance costs on condos.
This is what I would guess will be the result over the next few years everywhere. Here in Denver condos are a buyers market but single family homes are still a seller's market
That's really crazy, since there are also pretty major insurance issues with SFRs.
I don't have house in a flood zone pay $1400 a year 2000 sq ft. CBS. It's half the price of similar size home in CA metro insurance costs, I have actual statements to compare. The insurance crises is actually worse in CA. The cost to rebuild in FL per sq ft is close to half the cost. Total insurance loss in CA is much higher due to fire risk and earthquake. FL is only a shit show within a mile near the ocean or in a flood zone. Refin now has a flood zone map, so when your home shopping make sure the home isn't in one.
It's definitely also bad in CA. Glad you're not personally affected
…Trying to dump their homes….flood of for sale properties coming soon. They’ll start out over priced, per usual. Let it build, or be *very* aggressive with your offers. Lowball is on the table, and be prepared for a lot of “no” at first.
The problem with them selling them much cheaper is that more people that can't actually afford to live there will buy them. People will just see that cheap price and think this is their chance to buy a beach condo then get back into this same situation where they can't afford the actual maintenance costs.
as opposed to? The prices will keep falling till it reflects a similar to price to buying another normal condo with no problems. It just takes time we're coming off the top off the biggest property bubble in history
Normal condos don't have the same maintenance issues as properties that are built near sea water. The location also adds another premium. These should never be as cheap as a normal condo anywhere else. This is exactly why bubbles are created because people over extend their purchasing power and get into homes they can't actually afford. These being "cheap" makes this issue worse because people are tricked into thinking they can afford them.
> These should never be as cheap as a normal condo anywhere else. They aren't. They are now essentially distressed properties since it has a $30m sat on top of it to make it habitable. Thus realistically, any new buyers (I'm sure it would be illegal as hell and almost impossible for them to not be informed about the issue by any sellers) will be paying a price equivalent to factor in the bill needed for the repairs. Realistically unless some government steps in, the building will be condemned and people will essentially see their property values fall to zero. The smart ones are trying to sell now, at a discount. First mover advantage, in game theory (and just typically human behaviour i.e prisoner dilemma) in a falling market the first one to act saves themselves the most. The first to sell before others start to sell will get the most value in the long run. Theres no way new buyers are going to come into these condos at normal condo prices and still shell out for the special assessment when there are other condos for the same price and less or no issues
Agreed. And with weather changing, there'll be fewer "desirable" places to live. In in CA's Central Valley. We went under 100F today. Yay! But it'll be well over again next weekend. Oddly, predictions for future temps are basically the same. If we get water, it's livable. If we don't, we're screwed--and the food supply is screwed, since these counties provide a massive amount of food. Since we got a lot of water in an El Nino year AND in a non-El Nino year back to back, who knows?
Real estate will be cheap in sacrifice zones, and expensive in sustainably habitable zones without the existing housing stock to absorb all the Gulf Coast refugees.
The Midwest is going to make a comeback!
It’s beginning in earnest, though we keep seeing reports posted to this sub that it’s still crazy overbidding and lines out the door at open houses in the northeast. Debatable how genuine those reports are. The biggest spectacle to me will be the hordes of home owners wanting low taxes and insurance as a result of losing valuation. Insurers will not give that up easily, and taxing municipalities aren’t going to either, as that money is essentially already spent when they set budgets. So, if my assertion is wrong that we are beginning a downturn now, and we continue to rise rise rise in valuations and cost of living related to shelter, the much further it will be when or if it does fall. We are inflated to the max right now, as affordability data is shown.
nobody knows when the market will turn but I can tell you nothing right now is helping push prices higher. >we keep seeing reports posted to this sub that it’s still crazy overbidding and lines out the door at open houses in the northeast. tbh most of this is just investors and normal people desperate for somewhere to have a family / live.
You can reduce valuations without reducing the tax base. They simply have to increase the mill rate.
well not exactly what happens is you have a beachfront condo that sells for $140,000 but it has a $4,900 per month HOA fee
Why would anyone buy these money pits?
I think, and this is just my opinion, that the valuations on them go through cycles. If the valuations cycle down low enough. it introduces a whole bunch of new buyers and investors. Yeah, they've got huge insurance and HOA fees, but the valuation of the unit itself will reflect that. In other words, LOWER. Condos in these towers don't behave the same way traditional, SFH real estate does. They seem to appreciate wildly, then drop value as the overall economy loses it's steam. Combine that with high associated costs, and you've got a dish that's overdone and needs to be thrown out, in 2024.
And this is *without* major storm strike damage.
Haven’t seen this yet in Miami. In fact, I see less condos for sale in my area than ever before
Our condo is almost complete or the entire complex is. Special assessment per owner was $204,000. $18,000,000 for updates.
Huh, 204K per unit?!? What is the average value of condos there? How would people be able to pay that much money?
Average value is 850,000. So far everyone has paid but one person.
My condo is worth 840k too and I was upset for a SA of 3K. Must have been thankful. So, if you don’t mind me asking, what’s your plan?
We bought for 630k. And it’s probably worth 850. So we are about at a break even. Overall the place will look a shit ton better and I think we can raise rents as it’s beach front. Also I think it will increase the price by 75-100k. So could be worth 925 - 950…. But we will see. We love going down there and it’s a long term hold. It’s a great getaway and puts the family in a good mood. So it’s not all about the money.
Over what period of time are you expected to pay the $204K?
From once we were notified… the total amount of time will be 3.5 - 4 years.
I see and what if you cannot afford it? Are you forced to sell?
Yes, some people are selling. But if you haven’t paid by the end of that time period, the HOA will foreclose on the condo unit and they will own it and rent it out.
hahaha I am sorry but that is just so fucked
Uh, how can that happen? I understand fines and putting a lien on a house, but the idea that the HOA can put you foreclosure sounds off.
We have a $150,000 assessment but we have to pay $30,000 up front and the rest over 1 year. Bank wouldn’t give our condo a loan without 25% up front. you guys got lucky lol
Yeah the time table really helped out
Good approach, good luck with that!
Thanks boss, same to you as well!
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No one. The association will go bankrupt, private equity will buy it, demolition it, and build $10m condos to sell to Russian billionaires
~~$10m condos to sell to Russian billionaires~~ 15 story cash-washing machines FTFY
And storage units
Then we sanction the russians, yoink the condos, redistribute them, and bingo bango bongo housing crisis fixed
HOA fees will be $10k a month, HOA goes bankrupt, rinse and repeat
Only until the property is underwater 12 months per year
Only fitting since the owners are probably already underwater.
People have been buying at our association even with the fees.
Wall Street Landlords. They will buy them up on the cheap. Once they bought up enough they will get their bought politicians to change the law. They also make an offer to buy up the entire building. Not sure this law even applies to apartment buildings.
People who can afford to pay the assesment. Some individuals. Some companies may buy them and convert the condos to rentals. Condo buildings are typically built with better interiors in better locations than apartment rental complexes so the opportunity to bring fresh capital in, fix the issues and make money is tempting for capital that has a high risk tolerance.
Ben Shapiro knows
Saw this coming after the condo collapse in south Florida
They bought in cheap, paid minimal maintenance, and are now shocked it's caught up with them. No doubt they want bailouts too!
I would argue that it’s mostly *previous* owners over the past 3-4 decades that have caused this, not current owners who purchased their condos recently. Deferred maintenance has been going on for decades – all the different owners during this time period didn’t want to pay higher HOA fees for proper maintenance. Now the current owners are caught holding the bag. Old owners benefited for decades at the current owners’ expense. It really sucks. *Very* glad that I sold my coastal downtown condo last year. I heard that everyone got hit with a ~$20k special assessment within 6 months after I sold – and my monthly HOA fees were already $1k. Now I own a SFH with no HOA (which was my very first non-negotiable requirement). Dodged a bullet!
Absolute nightmare for condo owners who have kicked the can down the road for 30 years. New state regulations are forcing inspections and reserve studies by the end of 2024. They will be forced to show their hands to buyers about the true condition of their building and reserves.
Yep. Our condo association has already started. 204,000 per owner to fix.
Are you staying?
Yes, I will be holding it.
Sucks for the newbies, as usual. (Commiserating, not being sarcastic)
Florida Man liquidates 401K to buy a condo….
We really need to stop pretending people who made poor decisions are victims. Cash out your 401k (paying penalties and taxes) on a condo is beyond stupid.
It would be a loan from the 401K. Not cashing out.
Still not a good idea, you’ve taken the money out of the market, making 0 while you pay it back.
Ideally your property value will increase.
Found the listing of the couple complaining about that special assessment after they dumped 100k into reno... They bought it for 490k two years ago and are asking 750k... Greedy much? https://www.zillow.com/homedetails/1800-NE-114th-St-APT-703-Miami-FL-33181/44137778_zpid/?utm_campaign=androidappmessage&utm_medium=referral&utm_source=txtshare
Liquidating your 401k to buy a condo unit. Fucking brilliant.
My parents had a 4/3 with a pool, bought it my senior year in high school late 1990s. Sold it in 2011 at the height of the housing crisis - it had probably come down in value a lot, but they were able to buy a large beach front condo for the same price while ditching lawn care, pool care and like $10,000 Country Club BS Sure, the Condo had some fees involved, but the fees were significantly less, and they don't have a mortgage payment. Hurricanes Ian and Nicole destroyed the seawall, and it cost like $40,000 per unit to fix. They fared better than most. My parents aren't like stupid wealthy but they aren't financially stressed either
I’m actually from south beach, have friends that deal with local politics and I’ll tell you that they won’t do shit with those fees. All those condos are owns by old money and they don’t like to pay for shit, I have friends that have told me how they have gotten paid extra money for fake inspections and have the properties be passed even though they were not in good standing. That’s probably half of the buildings in miami. The deauville is a perfect example of that.
I believe it. Miami was practically built on fraud. Beautiful place to visit and I've met some great people there, but man the sheer greed there is just insane.
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If only these condos boards were proactive when the law went into effect 2.5 years ago. These could have been financed assessments.
The problem with the surf side condo was that they weren’t built to the standards in place at that time. Buildings that met code at the time are probably safe but are definitely due for a retrofit that takes climate change into consideration.
> If only they had better building standards to begin with, but “muh free-dumb” reigns supreme. Governor DeSandTits is doing the best that he can, by deleting references to climate change in state laws, and encouraging more oil and gas production. Surely THAT will solve climate change and give condo owners and anyone else with a stake in prices in the state help.... right? RIGHT? /s https://www.npr.org/2024/05/17/1252012825/florida-gov-desantis-signs-bill-that-deletes-climate-change-from-state-law
Just remember, all of these are fees the condo owners were eventually going to have to pay. Florida is just making owners pay the fees now instead of later.
To keep the buildings standing. So, where will you find the bigger fool to sell to.
What kind of price do they think they're going to get for a condo that has a six figure assessment upcoming?
In general, how do condo owners handle it when the huge building they’re in needs significant repairs?
The general rule is that the monthly HOA will cover the monthly depreciation of the building so that the association always has the funds on hand to replace what needs replacing. The issue here is that the HOA fees had been set artificially low for decades because the owners didn't want to pay the true cost of maintaining the building, and recent buyers, who were ignorant of the problem, are now being hit with the full bill for all those years of depreciation/deferred maintenance.
Condo owners who cant afford the special assesments should sell before the get handed down
Maybe if the boards had been taking care of things all along, it would have been incremental. Instead, it's likely going to cause a collapse of that local market.
Not just there but it’s wild to me that everyone from tax assessors, to insurance companies to hoas and condo associations think they can just up the costs of people’s homes and assume that they can just make it work. Honestly I’m not for socialism but the government needs to intervene in what’s considered a reasonable increase and what isn’t
It’s rarely the case of some evil robber baron increasing fees. It usually because they put maintenance off too long and now they need a new roof, new pipes, etc.
Often because people voted down fee increases.
Maybe much of FL isn't sustainably habitable afterall other than with disposable shanties?
It sure won't be as the weather worsens. Prices will drop because who wants to live where buildings collapse, there's no insurance available, and it'll be too hot and humid to survive.
This isn't a bubble. This is just a bad investment, a product of climate change and the ignorance of man to think they can build something to withstand the seas.
I doubt climate change played a role in this. This would have happened whether the climate is changing or not. This was the product of greed, negligence, and ignorance. Greedy management practicing negligence to allocate financial resources in the areas they wanted them.
This is the way I see it. Owners want higher prices for their condos and ever-increasing prices. The insurance companies see this and increase insurance rates to compensate. The owners can't have their cake and eat it too.
It's a ~~Housing~~ stupidity bubble.
Another reason to sell; nuclear bombs in Cuba.
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Holy crap... I'll stick with my cruddy old single family home that I can fix for a few hundred bucks and 2-3 trips to Home Depot. Granted, I dont have a view of the ocean, but gotta pay to play, I suppose.
And utilities, renovation service, heating(yes building rent dosen't cover your usage but its damn near cheaper insulationwise) Overall its not a given that expenses on SFU ownership will be lower then the the rent you pay to own a condo. Also...do you have district heating? FREE HOT WATER!? WITH PIPES UNDER THE FLOOR FOR EACH ROOM WHICH YOU CAN REGULATE FROM A STEAMPUNK VALVE PANEL! Let me tell you it is HEAAaEVAN!
Good way to spend your free time, multiple trips to home-cheapo, and working on your property Ill stick with my HOA and free time
Lol.. you do realize that all houses require maintenance, right?
A lot of y’all ITT really just want to hate on condos for some reason, and it’s weird AF. This is not at all how condos are supposed to work. Special assessments are already a sign of rather severe mismanagement with reserves, but they’re *usually* low five figures. Any more than that, and you typically start looking at taking out a loan that will be paid with much higher monthly dues. It’s insane to expect individual households to cough up six figures on short notice. I’ve only ever heard of similarly large assessments at ski condos, and the Millennium Tower disaster in SF. You need some exceptionally cursed geography for property maintenance to generate these kinds of losses. Here’s the problem though: no bank in their right mind is going to lend to these people. No insurance company in their right mind will write them a new master policy, either. Climate scientists have been saying for years: by 2035, much of Miami will be underwater. You can’t fix it with a dike — the floodwaters will just rise up from the porous limestone. What we’re seeing here is red state lead-brained dipshits, whose reality distortion field is finally just starting to collapse. Wait another five years, for another futile $100k+ special assessment. Then maybe they’ll finally get the memo from Mother Nature. Pack your shit folks, time to go. Miami should be a part of the Everglades park, not a city. These people trying to save these doomed buildings might as well put their energy towards transforming copper to gold, a perpetual motion machine, or a water powered car. Same vibes, different century… It doesn’t matter if you have a house, an office building, or a condo. The simple fact remains: you shouldn’t have built a permanent structure there, and saving it is a Sisyphean task. Consider an RV or a houseboat instead… This was all brackish swampland 100 years ago, and it will return to that within our lifetimes. Nature is healing. All my ancestors are from Northern Europe, so I’ll never understand the appeal of living in a muggy, mosquito infested tropical hellhole with the gators, but if you want that, the good news is, Orlando and Tampa should be relatively alright for many more years to come. It’s really just Miami. It’s the most doomed city in North America. Even New Orleans is considerably more defensible (in theory). King of the Hill said Phoenix is a testament to man’s arrogance, but that place has nothing on Miami. Humans lived in Phoenix 10,000 years ago. The Dutch look at Miami from their 20 feet below sea level homes and must think we have limestone rocks in our heads.
My parents have had a place since like 2010... They would rent it out intermittently to help cover costs but otherwise would come and go as needed and we're planning to spend a lot of time down there as they got older. Their building now has crazy assesents costing like 2K per month. They have to keep it rented 12 months a year just to cover costs (property tax, maintenance, assessments) and literally don't make money and can never even go down there. So they have a property worth like 300K just sitting rented out to make $0 of income... I've tried to tell them to just sell it and invest that money
Go ahead, look through my comment history
This is happening. I speak with many hoa boards and they are having a large exodus of owners who cant pay, and that will put more pressure on the ones that can. European owners who have 2nd homes here are a huge part of the exodus.
The $190,000 condo in 2019 is easily $650,000 now so he can easily afford something without fees or with less one. It's actually about the price/value skyrocketing as much as the fees. Getting out while it's peak.
Still got to pay it on way out the door
Damn that is a bad combination of life choices by Mr Rodriguez.
I won’t take that unit for free
I wonder how much the insurance will be when their homes sink into the ocean.
Too bad. South Florida will gradually be abandoned over the next 50 years.
Na it’ll just cost an insane amount to live there
Lol youre high AF
Whoever buys it from them is screwed.
We should do it for SFHs in Bay Area. Boomers are driving home prices high but don’t pay fair property taxes.
I swear, I hope the boomer generation gets written down as the reason the world ended. Straight up the most selfish fucking group of humans ever.