As the U.S. real estate market attempts to recover from its recent collapse, South Florida is dealing with its own market crisis. For nearly a decade, Floridians have witnessed a signficant increase in the number of condominiums constructed in their neighborhoods. This housing boom was historic, unlike any other housing boom in Florida’s recent history.

When you think of South Florida condominiums you probably envision lush and luxurious high rises situated along the shorelines of the best Florida locations. However, over the past decade the landscape of the condominium market has changed drastically with the emergence of the condo conversions trend.

What are Condo Conversions?

In the real estate market, condo conversion is the process of converting multi-unit apartment complexes to single condominium units to rent or sale. Typically, developers invest millions in condo conversion projects, and pre-sold the units to interested buyers.

In South Florida, condo units are an affordable alternative to pricey single family homes. Unfortunately, this attraction coupled with the troubled real estate market has resulted in a huge supply of condo units, many of which have remained vacant over the past couple of years. 

Condo Conversion Statistics

From 2003 to 2009, in Dade and Broward counties more than 70,000 multi-unit apartment complexes were converted to single-owner condominiums. During this time period, a little more than 50,000 new condominium units were constructed. Real estate analysts believe Florida’s condo conversion market will be one of the last to recover from the dysfunctional real estate market considering the supply of newly constructed condos available.

Since the real estate market collapse two years ago, most of all condo developments have lost value, foreclosures rates have increased, and condo associations are struggling to stay afloat. However, condo conversions are experiencing even tougher times with their share of foreclosures, plunging prices, and aging problematic structures. 

According to the Florida Association of Realtors, the average prices of condo conversion units have dropped as much as 75 percent. This is compared to a 50 percent drop of home prices in Miami-Dade and Broward counties.

Despite the present state of the condo market, the low prices and huge supply of condos may result in unimaginable bargains for property investors. If you’ve considered investing in condominiums in prime Florida locations, now may be an ideal time to give it more thought and consideration. Contact the real estate attorneys of Schecter Law to discuss acquisition of newly constructed or converted Florida condominiums.

This entry was posted on Friday, August 14th, 2009 at 5:43 pm and is filed under Fort Lauderdale Real Estate, Miami Real Estate, Real Estate Law. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.