Saturday, December 09, 2023

A Deep Dive On Condo Fees

 After blathering on for over a year now about coming condo fee increases I see that we've had enough movement among  the Cocoa Beach and Cape Canaveral condo complexes to have a look at some actual numbers and see where we stand in the condo fee inflation story. Note that the majority of these increases do not yet reflect funding for the newly required structural reserve fund. Condos have until the end of 2024 to come into compliance so there will be a lot more fee increases throughout next year as associations get their milestone inspections and reserve studies completed. Many of the recent fee increases we've seen were triggered by radically increased insurance costs alone.

I pulled these numbers from currently for sale MLS-listed units that had changed hands in recent years and with recent fee increases. This is but a small, random sampling among the 241 current condo listings.  There are plenty of others with similar increases that don't happen to have a unit currently for sale in the complex. The data I'm quoting came from agent input so, as always, I'm at the mercy of the accuracy of that input. Some of these complexes like Villages of Seaport have different fees for different sized units so I'm quoting the fee history for a specific unit that is currently listed for sale. There might be some errors but I believe we can trust the overall trend. All these numbers are publicly available.

  • Cocoa Beach Club - 2022 fees - $525/month * 2023 fees $860/month
  • Royal Mansion - 2019 - $355/month * 2023 fees - $594/month
  • Xanadu - 2021 fees - $575/month * 2022 fees - $675 * 2023 fees - $950/month
  • Canaveral Towers - 2021 fees - $550/month * 2022 - $650 * 2023 - $1085/month
  • Windward East - 2018 fees - $415/month * 2023 - $638/month
  • Windrush - 2021 fees - $470/month * 2023- $665/month
  • Villages of Seaport - 2019 fees - $360/month * 2023 fees - $760/month
  • Emerald Seas - 2016 fees - $470/month * 2022 - $640/month * 2023 - $940/month

Owners in several of the complexes listed above had the additional burden of special assessments during the period when the fees were climbing. Many of these and others not listed will be forced to raise fees again when the results of their structural reserve studies are completed. 

2024 looks to be a year of reckoning for our condo market. So far, prices have not really reacted in a meaningful or measurable way to this year's fee increases but there have been no sales in several of the of the affected complexes since the last fee increase. Is it the typical year-end slow market or is the market waiting on sellers to compensate for the new, higher fees with new, lower asking prices? Perhaps buyers will shrug off higher costs of ownership as an acceptable issue and will continue to pay higher and higher prices for the limited number of condos available in our area. Maybe rents can be raised enough to cover the fee increases for investor-owned units. That seems unlikely to me but it won't be the first time our market has fooled me. By the end of 2024 and possibly as soon as the end of snowbird season we will know. In the interim I think it's reasonable to expect the inventory of condo units for sale to continue to increase as the higher costs of ownership sink in. I expect post-snowbird listings next spring to be plentiful. 

You have 16 days left in which to procure your gifts. Use them wisely. 

"One of the most frightening things about your true nerd, for many people, is not that he's socially inept - because everybody's been there - but rather his complete lack of embarrassment about it." _Neal Stephenson