By Paige Kovari | Palm Beach County Realtor
For years, buyers shopping for condos in Florida focused on many of the same things: location, view, amenities, condition of the unit and, of course, the monthly HOA fee.
Today, I believe there is another factor that may be just as important as all of those combined:
The financial and structural health of the building itself.
Florida’s condo market is going through what I call “The Great Separation.”
We are entering a market where two condos that look almost identical on paper may have very different values because of what is happening behind the scenes within their associations.
And buyers are starting to notice.
It’s Not Just About the Unit Anymore
When I evaluate a condo for a buyer today, I don’t stop at the MLS listing.
I want to know:
Those questions can completely change how I view a property.
A beautiful condo with a gorgeous lobby, great pool and low HOA can suddenly look much less attractive when you discover the association has spent years underfunding reserves.
Conversely, a building with a higher monthly HOA may actually be the safer purchase if the association has been responsibly maintaining the property and preparing for future expenses.
What Is SIRS?
Florida’s Structural Integrity Reserve Study requirements have forced many condo associations to take a much closer look at the long-term cost of maintaining their buildings.
A SIRS examines major structural and building components and estimates their remaining useful life and replacement costs.
That can include major items such as roofs, structural systems, waterproofing, fire protection systems and other significant components.
The important part for buyers isn’t simply whether a building has a SIRS.
I want to know what the SIRS says.
A reserve study showing millions of dollars of future capital needs isn’t automatically a reason not to buy.
Buildings cost money to maintain.
The real question is:
Has the association financially prepared for those expenses?
The Reserve Number Matters
Imagine two similar buildings.
Building A charges a $450 monthly HOA.
Building B charges $700.
At first glance, Building A seems like the obvious winner.
But then you look deeper.
Building A has historically kept dues low and has very little money in reserves. Major repairs are approaching and owners could potentially face significant assessments.
Building B has higher dues, but it has been consistently contributing money toward reserves and maintaining the property.
Suddenly, that $700 HOA doesn’t look nearly as bad.
This is why I don’t believe buyers should automatically search for the building with the lowest HOA.
Low HOA fees and low ownership costs are not necessarily the same thing.
Special Assessments Aren’t Automatically a Deal Killer
Special assessments scare buyers — understandably.
Nobody wants to purchase a condo and immediately receive a large bill.
But I also don’t automatically eliminate a building because it has had an assessment.
I want to know why the assessment happened.
What is being repaired?
Does the assessment solve a major problem?
Is the seller paying it?
How much work will be completed because of it?
And most importantly:
What does the building look like financially after the work is completed?
There is a huge difference between an association assessing owners to complete a defined capital project and an association repeatedly assessing owners because it has no long-term financial plan.
The Market May Eventually Price This In
This is where I believe Florida’s condo market becomes particularly interesting.
Historically, buyers might compare two similar units primarily by price per square foot.
I don’t think that’s enough anymore.
Over time, I expect buyers, lenders and investors to increasingly distinguish between buildings with:
Strong reserves
Completed inspections
Responsible boards
Realistic budgets
Well-maintained buildings
Manageable future capital obligations
and buildings with:
Low reserves
Deferred maintenance
Large upcoming projects
Repeated assessments
Rapidly increasing dues
Unresolved structural issues
Those buildings shouldn’t necessarily trade at the same valuation.
And I don’t believe they will.
There Could Be Opportunity Here
This transition may also create opportunities.
Some buyers are understandably nervous about Florida condos right now.
But fear can cause the market to treat every building the same.
They aren’t.
A condo selling at a discount because the entire condo market is under pressure may be very different from a condo selling at a discount because its particular association has serious financial problems.
Understanding that distinction matters.
As both a Realtor and real estate investor, I don’t want to simply know what a condo costs today.
I want to understand:
What am I actually buying?
That means evaluating the unit, the building, the association, the reserves, the inspections and the future obligations together.
The Condo Market Is Changing
Florida condos aren’t disappearing.
But the way we evaluate them is changing.
The days of simply comparing price, HOA and square footage are over.
The buildings that have maintained themselves, funded reserves responsibly and addressed structural requirements may ultimately be rewarded.
The buildings that postponed those expenses for years may finally have to confront them.
That is the Great Separation.
And for buyers willing to do the homework, understanding the difference could create some very interesting opportunities.
Paige Kovari
Palm Beach County Realtor
📞 561-323-5748
Palm Beach County REALTOR®
dalton wade real estate group
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