Category: Housing Crisis

Home prices have now increased 67% in Florida with homeowners insurance skyrocketing 42% since 2020.

After five decades in education, Janet Stone envisioned a peaceful retirement in her condo overlooking Florida’s Atlantic coast.

However, she now finds herself back in the workforce, teaching preschoolers with disabilities, and living with her son in Las Vegas to manage a $100,000 bill from her condo association for a large-scale concrete restoration project.

“I shouldn’t say it, but it really sucks to work every day and not have a cent and have to wonder, ‘Can I afford groceries this week?’” Stone said.

She bought her Ormond Beach condo for $400,000 in 2021, but now all her earnings go toward the renovation costs.

Aging condo buildings across Florida face rising expenses and significant repairs to meet new regulations after the tragic collapse of the Champlain Towers in 2021, which resulted in 98 fatalities.

While these regulations aim to enhance safety, they are placing financial strain on many condo owners and threatening affordable housing options along Florida’s coastline.

Florida House Representative Vicki Lopez noted that the need for repairs could force some residents, particularly those on fixed incomes, to seek alternative housing during an already challenging affordable housing crisis.

The rising costs of housing are affecting many households in Florida, where home prices have surged by 67% since 2020, and homeowners insurance rose by 42% last year, per NBC News.

The median-income households in most Florida counties now struggle to afford median-priced homes.

Older condominiums have typically provided an alternative for those unable to buy single-family homes, often housing retirees and single-income households.

However, the financial burden of living in these buildings is increasing.

New legislation requires condo buildings over three stories and older than 30 years to pass structural inspections by the end of the year, impacting around 900,000 units statewide.

This law also mandates that condo associations maintain minimum reserves for future repairs, leading to increased monthly dues.

For example, residents at the Palm Bay Yacht Club in Miami are facing a $140,000 special assessment for building improvements, while owners at Daytona Beach’s Surfside condos have paid between $50,000 and $60,000 for concrete repairs and window replacements.

In Orlando, Regency Gardens residents were told they would need to pay $22,000 each for upgrades, prompting some to remove the board in hopes of reducing costs.

In severe cases, residents are being forced to evacuate due to structural issues found during inspections.

Greg Batista, a professional engineer, mentioned that he is currently working on a Miami Beach building that may require evacuation due to safety concerns.

Stone, who purchased her condo to be near her daughter and grandchild, was shocked to receive a $100,000 special assessment for necessary repairs just a year after buying the property.

Having already depleted most of her retirement savings for the down payment, she now faces the risk of foreclosure if she cannot pay the assessment.

Despite considering selling her condo, she found that the assessment had lowered property values significantly; a similar unit is now listed for $335,000, down from her purchase price.

With limited options, Stone returned to work at a school in Las Vegas, teaching children with autism.

“I am exhausted every single day,” she said.

“I come home and promptly fall asleep and get up and do it the next day.”

She estimates it will take two years of full-time work to pay off the assessment, after which she hopes to return to her Florida condo, currently shared with her son.

“This was supposed to be my retirement, a time to enjoy life with my family,” she lamented.

The rising costs of condo ownership are leading to more units being listed for sale and driving down prices.

Statewide, the number of condos for sale has increased by 23% in the last six months, while prices have dropped by 4.5%.

In Volusia County, where Stone lives, inventory is up 28% and sale prices have decreased by 9%.

Realtor Krista Goodrich noted that many condos are struggling to sell due to buyer hesitance stemming from concerns about structural integrity and the impact of hurricanes.

While some buildings may require little to no repairs, many are now facing the consequences of years of inadequate maintenance and substandard building practices, compounded by the corrosive effects of Florida’s saltwater on concrete and rebar.

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Also Read: Allstate Now Increasing Home Insurance Rates in California By 34%

Other Economy News Today

Allstate is now increasing home insurance rates in California by 34%, making it the largest rate increase among major insurers in the state.

This month, the Department of Insurance approved Allstate’s request to raise home insurance rates by an average of 34.1% for approximately 350,000 customers in the state, per Bloomberg.

While some homeowners may experience decreases of up to 57%, at least one customer could face a nearly 650% increase.

The new rates will be reflected in bills at the first renewal date after November 7, as outlined in the company’s filings with the state.

This is the largest rate increase by a major insurer since 2021, when Homesite Insurance Co., a subsidiary of American Family Insurance, was approved for a 38.2% hike in homeowner rates.

Allstate’s increase pertains solely to homeowner’s insurance, but the company also has a pending request to raise rates for condominium owners by an average of 30%.

“Higher home values and repair costs coupled with more frequent, severe weather lead to higher payments to help customers recover, so we need to adjust rates to better reflect the cost of protecting our customers,” a company spokesperson said in a statement.

A company spokesperson did not specify when the insurer would start accepting new policies again.

The conditions for resuming new policies include implementing a series of reforms known as the Sustainable Insurance Strategy, which Insurance Commissioner Ricardo Lara has pledged will be ready by year-end.

These reforms aim to change the pricing formulas and expedite the approval process for rate adjustments, reports SF Chronicle.

Experts believe these changes may enable insurers to increase their prices further.

In return, they will be expected to write more policies in regions most affected by the insurance crisis.

“Under Proposition 103, insurance companies are increasing their rates — legally — but they are not writing more policies. That is the problem Commissioner Lara is solving with the Sustainable Insurance Strategy,” Michael Soller, deputy insurance commissioner with the Department of Insurance, said in a statement.

He added: “California still has lower insurance costs on average than many large states.

Increasing availability is how we will get to affordability in all areas.”

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Also Read: Harris Proposes Building A Whopping 3 Million New Homes

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