Insurers are dropping HOAs, threatening the condo market
Published On Jan 25, 2025, 7:44 AM
Homeowners' associations (HOAs) are facing increasing difficulties in obtaining insurance, as insurers are either hiking premiums significantly or exiting the market altogether. This situation is largely attributed to rising losses from extreme weather and structural integrity issues following events like the Surfside condo collapse. As a result, HOA fees have surged, making homeownership more expensive. The impact is notably severe on condos, where owners may see their monthly fees double, affecting sales and market inventory. Nationally, condo sales are declining while inventory is rising, particularly in disaster-prone areas of Florida and Texas, indicating potential challenges ahead for the condo market.
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The ongoing issues with HOA insurance could lead to decreasing demand for condos due to rising costs, impacting resale values negatively. Investors should exercise caution in the condo market, especially in areas heavily affected by recent weather events and insurance hikes.
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