Here's How Condo Collapse Could Reshape Real Estate Market

The deadly condominium collapse in Surfside may have long-term effects that reshape South Florida's real estate market.

NBC News reports market observers have already seen a drop in demand for units in older buildings typically occupied by lower-income tenants and retirees, similar to Champlain Towers South condominium, which experienced a partial collapse on June 24.

There has, however, been a much greater demand for buildings erected after 2000, typically purchased by wealthier residents.

“That’s going to be more common, at least for a while,” said Sepehr Niakan, a real estate broker for Condo Black Book in Miami via NBC News. “The fear of going into an older building is going to be greater, and buyers are going to be much more careful and sensitive to the history of repairs and maintenance of a building, which wasn’t really an issue before.”

The Surfside condo was built in 1982 and going through its 40-year recertification prior to its collapse last month, requiring an engineer to ensure the building's structural and electrical safety, often leading to the need for costly repairs.

A structural field survey report conducted by an engineer in October 2018 revealed evidence of "major structural damage" to the concrete slab below the pool deck and "abundant" cracking and crumbling of the columns, beams and walls of the parking garage under the building, the New York Times reports.

The field survey led to plans for a multimillion-dollar repair project that was scheduled to begin soon -- more than two and a half years after the building managers received a warning -- prior to the collapse.

The complex's management association had disclosed some of the problems following the incident on Thursday, but the full nature of the concrete and rebar damage was not made public until the 2018 report was released by city officials on June 25.

“Though some of this damage is minor, most of the concrete deterioration needs to be repaired in a timely fashion,” the consultant, Frank Morabito, wrote about damage to the building in the 2018 report.

Morabito didn't give any indication that the structure was at risk of collapse, but did note that it needed repairs in order to maintain "the structural integrity" of the building and its 136 condos.

Market experts expect prices for older condos to drop amid lagging interest, while the push for more engineering reports will likely force lower-income condo owners to take on assessments they can't afford or sell as quickly as possible.

At least 78 people have died in relation to the June 24 collapse as of Friday (July 9) morning, the Miami Herald reports.