Massive Florida Real Estate Crisis Could Make Thousands Flee to New York

Home prices in Florida are reaching catastrophic levels; sparking concern that residents are being forced to flee to other states.

It wasn't that long ago when Florida emerged as a hotspot for retirees and people seeking a cheaper cost of living.

The Sunshine State advertised itself as a promised paradise that offered low taxes, picturesque beaches, warm weather year-round, plenty of entertainment options, and a more-relaxed lifestyle.

The message was especially effective during the pandemic. New York reported a mass exodus of residents in 2022, where 91,201 residents fled down south. According to the latest Census numbers, more than 1.6 million former New Yorkers call Florida their home.

Now, the opposite is apparently happening. Condo prices, homeowner association fees, and insurance costs have ballooned so much, residents are fleeing in droves.

Steven Kupchan, a real estate export from One Sotheby's International Realty, warned Daily Mail the number could get worse because of skyrocketing housing and insurance costs.

"In the worst-case scenario, a significant number of condo associations could go bankrupt due to the inability to cover the costs of necessary repairs and maintenance," he said.

This would lead to an intense domino effect through the market, triggering massive foreclosures and causing property values to plummet. In that situation, Kupchan predicted "a glut of unsold properties and further declines in prices."

HOA fees in South Florida jumped by 60% since 2019, according to Redfin.

He also said insurance companies are assisting in driving out residents. Premiums increased after a law was passed in 2021 following the mass casualty event in Surfside, where a condominium suddenly collapsed and killed 98 people.

The law ushered in mandatory safety checks after it was found the Surfside condo association held off on crucial building repairs to save money. The new legislation mandates all condos 30 years and older to have annual safety inspections, and for all flagged repairs or issues be remedied by the end of the year.

A consequence of that law, he said, could cause premiums to rise to "unsustainable levels, making it difficult for buyers to obtain financing."  HOA costs are already rising to help associations cover needed repair work.

How high are these charges? One condo in Saint Petersburg charges $2,300 a month in HOA fees.

One bright side, Kupchan noted, was increasing interest in single family homes over condominiums. That could possibly help offset a mass exodus, but Kupchan is erring on the side of caution.

With "market volatility" likely in the coming years because of the condo boom and apparent collapse, the issue could bleed into "other sectors of the real estate market as well."

As for a possible invasion of ex-Floridians, New York is already seeing an uptick in expats. The most recent Census data reported roughly 22,000 Floridians moved to New York in 2022.

Read More: Americans from These States Are Flocking to New York the Most

It seems New York is looking like a more attractive escape in recent years because the Empire State added 301,500 new residents that same year.

What do you think? Is this brewing housing prices going to be a big problem for Florida? Let us know by giving us a shout using the station app.

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