Redfin Reports Florida Condo Prices Are Holding Up Best Away From the Coast

Redfin, a leading real estate brokerage, has released a report highlighting the resilience of Florida's inland condo market, which has been holding up better than coastal areas. The report, based on an analysis of MLS data in Florida metro areas where condos make up at least 5% of housing stock, reveals that inland Florida's condo prices rose 5.4% year over year on average in January 2024, compared with a 4.8% decrease on Florida's Gulf Coast and a 3% drop on the Atlantic Coast.

The report attributes this resilience to several factors:

1. Lower Insurance Costs and HOA Fees: Inland Florida has relatively lower insurance costs and HOA fees compared to coastal areas. This is due to the lower risk of natural disasters and the fact that inland condo buildings tend to be newer and more up-to-date with regulations. For instance, Tallahassee has a median monthly HOA fee of $250, which is the lowest among the 23 metros analyzed by Redfin, compared to $965 in Miami.
2. Less Disaster Risk: Inland Florida faces lower risk from natural disasters, with only 4.8% of condos facing high flood risk, compared to 59.4% on the Gulf Coast and 45.7% on the Atlantic Coast. This lower risk translates to more affordable insurance premiums and HOA fees.
3. Higher Share of New and Low-Rise Condo Buildings: Less than half (47.7%) of condo inventory in inland Florida is over 30 years old, compared to more than half on the Gulf Coast (57.1%) and the Atlantic Coast (71%). This means many inland condos haven't yet had to pay for inspections and are better protected against natural disasters. However, if they're over two stories, they may have to pay for inspections soon.
4. Slower Inventory Growth: While the inventory of condos for sale jumped 37.5% year over year in inland Florida last month, it's still lower than the 27% gain on the Atlantic Coast and the 19.2% increase on the Gulf Coast. This slower inventory growth helps maintain prices in inland areas.



In contrast, coastal areas have seen a pullback in the condo market, with prices dropping and potential buyers becoming wary of the additional financial obligations. This trend is most pronounced in coastal condo markets, where prices are falling due to the combination of high insurance costs and new regulatory requirements.

The report suggests that inland Florida's condo market may continue to hold up better than coastal areas, provided that insurance costs and regulatory requirements do not become too onerous. However, it's essential to monitor the market dynamics and inventory levels to ensure that the inland condo market remains stable and resilient.

In conclusion, Redfin's report highlights the resilience of inland Florida's condo market, which has been holding up better than coastal areas due to lower insurance costs, less disaster risk, a higher share of new and low-rise condo buildings, and slower inventory growth. As the market continues to evolve, investors and buyers should stay informed about the factors influencing condo prices in different regions of Florida to make informed decisions.