South Florida condos are red-hot, but what are the implications?

South Florida condos are red-hot, but what are the implications?

Writer: Catie Schwartzman

Broward condo2 min read April 2021 — As demand for single-family homes continues to heat up, South Florida condos have reached mass appeal. For Northeasterners new to the South Florida warmth and livable weather, condos are a little slice of paradise. But paradise may come with a rising cost in the form of a tax hike.

In the heat of the COVID-19 pandemic, buyers flocked to the Florida market but shied away from tightly confined spaces. However, now that the vaccine rollout is in full swing, a balcony and a moderate living space are just what buyers, both local and out-of-state, need. Nancy Corey, the Southeast Florida regional vice president for Coldwell Banker Realty, commented on the trend by email to the Miami Herald.  

“With the demand on single-family homes running high,” said Corey, “consumers are looking to condos as an option. In addition, consumers from the northeast and other areas of the country appreciate the difference of condo living in colder climates versus our balconies being an extension of the living area of the unit.”

Condo purchases also can be more moderately priced compared to the red-hot residential market for houses in South Florida. According to co-owner and director of Group P6, Ignacio Diaz, the uptick in condo demand came in January and February. Many of these condo shoppers are C-level business executives, he said.

“We have seen a lot of business owners,” said Diaz to the Sun Sentinel. “I haven’t seen as much as from the C-level suite. A lot of them are owners of very successful companies. They have companies that are sizable, but it’s not your typical Fortune 500 companies. Some of them have listed public companies.”

In February in Broward year over year, closed sales of condos and townhomes rose 22.8% to 1,451. In addition, cash sales were up 14.9%. 

A Coral Springs area broker and president of the Realtors group, Karen Johnson, said to the Sun Sentinel that high-end condos in the $600,000 to $800,000 range are flying off the shelves. She said she has listed properties in the early hours of the morning, only to find multiple offers within a few hours. 

With both condos and houses aflame within the hot housing market, tax implications will come this year. Even if the government keeps most tax rates, the market will still lead to higher taxes. 

“We anticipate the residential values will increase for the 2021 tax roll as we have seen robust activity in both single-family homes, townhomes and condos,” said Tim Wilmath, Palm Beach County chief appraiser, in an email to the Sun Sentinel. 

South Floridians are likely to receive their property tax notices by August. With low inventory on the region’s residential property persisting, a tax hike is likely.