Florida Real Estate Update: Trends and Challenges in the Multifamily Market and Beyond
Sales of Older Multifamily Complexes in Florida Decline Amid New Building Codes
Florida’s multifamily real estate market is experiencing a significant slowdown, particularly for properties built before 1992, according to a recent report by Trepp, a leading research firm in structured finance and commercial real estate. The report highlights how updated building codes, implemented after Hurricane Andrew in 1992 and further revised following the Champlain Towers collapse in 2021, have contributed to a notable decrease in transactions for older multifamily complexes.
As Florida continues to recover from past disasters, the evolution of building codes has become a critical factor in shaping the real estate landscape. The stringent regulations aimed at enhancing safety and resilience have inadvertently made it more challenging for older properties to attract buyers. The Trepp report indicates that the sales volume for these older multifamily units has dwindled, as potential investors weigh the costs of compliance against the potential returns.
In a parallel trend, many Quebec snowbirds are also feeling the pinch of rising costs in the Sunshine State. With the Canadian dollar currently valued at around $0.70 US—the lowest in five years—many Canadians are listing their Florida properties for sale. The combination of high living expenses and unfavorable exchange rates has prompted a mass exodus, further impacting the state’s real estate market.
As the Florida Legislature prepares for its spring session, insurance reform is also on the agenda. Proposed changes include the introduction of "Citizens windstorm insurance for all," closing loopholes for bad-faith insurance claims, and establishing an insurance advisory council. These measures aim to address the growing concerns among homeowners regarding insurance affordability and accessibility.
Despite the challenges faced by older multifamily complexes and the shifting dynamics of the snowbird market, Florida’s real estate scene remains vibrant. The ongoing demand for housing continues to drive prices up in certain areas, even as mortgage rates rise and some markets experience a slowdown. Notably, a recent report revealed that the median sales price for single-family homes in Northeast Florida rose to $400,000 in 2024, marking a 3.9% increase from the previous year.
In the luxury segment, a $285 million mansion in Manalapan is poised to become the most expensive home ever sold in the U.S. This ultra-modern property, located at 1960 South Ocean Boulevard, has generated significant buzz despite not yet breaking ground, showcasing the enduring allure of Florida’s high-end real estate market.
As the state grapples with these multifaceted challenges and opportunities, the future of Florida’s real estate landscape remains uncertain yet promising. With legislative changes on the horizon and evolving market dynamics, stakeholders are keenly watching how these trends will unfold in the coming months.