Surfside Condominium Collapse Could Change Miami’s Real Estate Market

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Surfside, Florida – Deadly collapse of an apartment building in Surfside, Floridahas prompted many in the region to ensure that their buildings are durable. In the long term, these estimates, as well as consumer fears and rising costs, could change the situation in South Florida. real estate market generally.

Market watchers said they have already begun to see a decline in demand for apartments in older buildings in an area that is usually occupied by low-income tenants and retirees, as in fallen condominiums. Champlain Towers South at Surfside… And those built since 2000 and usually inhabited by wealthier Florida residents are attracting more and more attention from buyers.

“This will be more common, at least for a while,” said Seper Nyakan, real estate broker for Condo Black Book in Miami. “The fear of entering an old building will be greater and buyers will be much more attentive and attentive to the history of the building’s renovation and maintenance, which was not a problem before.”

The Surfside building, built in 1982, was undergoing 40 years of recertification… This process requires an engineer to ensure the structural and electrical safety of the building and can often identify costly repairs. An engineering report provided by Champlain Towers indicated that the condominium required millions of dollars in repairs to fix “severe structural damage” to the concrete slabs below the pool deck and building’s driveway. documents showed

Nyakan and other real estate agents said they pushed for information on the building recertification process for their clients as it provides a clear warning of an impending assessment – determining how larger construction costs such as roof work or renovations will increase. elevator. shared by tenants.

After a brief pause to demolish the remains, search and rescue personnel work in the rubble of the 12-story Champlain Towers South condominium on Monday in Surfside, Florida.Giorgio Viera / AFP – Getty Images

But, they said, buyers now want engineering reports for safety reasons, and those reports are not always easy to obtain. Fears like this are also driving sales of older condominiums, which several real estate agents said, were still a “hot market.”

Market experts in South Florida expect declining interest in these older condos will drive prices down, while pushing for more engineering reports is likely to put low-income condominium owners at a disadvantage, forcing many to perform valuations they don’t. can afford or sell as quickly as possible.

This could lead to significant changes in condominium ownership and even in Miami’s skyline.

“If the results of those engineering reports in old buildings require significant repairs or tens of millions of dollars, and apartment owners cannot afford to do assessments, you will see units get thrown away,” said Adam Mopsik, CEO of Amicon. , an owner’s representative and construction firm that has worked with hundreds of condominium associations in the region.

Mopsik and others warned that this would be a slow process, but they said it could lead to a frenzy for developers who are eyeing the valuable land on the Florida coast.

Satellite view of the Champlain Towers in Surfside, Florida on June 4, before collapsing.Maxar Technologies / via Reuters

Paul Sassville, real estate agent for Compass Florida, said he had already received a call from a New York client asking if this would be an opportunity to buy a property. The client equated this with the community market along the East Coast after Hurricane Sandy in 2012 caused excessive damage and forced many to sell.

“All the best homes were built in the 70s, 80s and 90s on this nice coastal area,” Sassville said of Miami Beach. “Now you’re going to see what we call condominium closings, where developers buy out old buildings, demolish them and install new ones.”

Sassville said the demand for engineering reports from him has also skyrocketed, and Pugsik said he has had to hire more workers in recent weeks to keep up with the number of calls he has received from condominium associations.

“We get a lot of hysterical calls from old customers and new customers just wanting a technical report,” Mopsik said, noting that demand is driving up the price of services because there are not enough engineers to do it. number of requests.

But it’s not just new appraisals, plummeting condominium prices, or engineering reports that should worry low-income residents.

Mike Clarkson, president of the Hilb Group of Florida, a statewide insurance brokerage firm, said he expects buildings across the state to be recertified 40 years after the Surfside collapse, and that thereafter are likely to be redesigned every 10 years.

This is the warning Clarkson says he brings to a series of condominium board meetings he will attend across the state in response to clients asking for clarification.

“Surfside is not alone in demand. It’s not just Miami. It’s all over the place, ”Clarkson said. “The number of emails and phone calls I get — and we have 750-800 associations that we insure in Florida — is crazy. They call me from three-story buildings. “

Another problem is that premiums can suddenly rise, Clarkson said. He recalled that after Hurricane Andrew in 1992, many major insurers left Florida due to the number of claims and because “premiums rose 400 percent, 500 percent overnight” due to lack of competition.

“This is becoming a holiday,” he said. “And this is something that will happen again, or they are going to release a policy with so many exceptions that it almost makes no sense.”



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