Naples’ condo market is facing what one experienced agent calls a structural affordability crisis: post-hurricane assessment hikes of 20 to 30 percent are changing buyer behavior and widening the performance gap between condos and single-family homes, a trend that may persist for years.
“I’ve seen now almost $1,000 a month in assessment fees. So that’s huge,” says Mike Shoaff, a top 1% agent with RE/MAX Hallmark Realty who has tracked the Naples market since 2015. Shoaff explains that these rising costs, layered on top of mortgage payments, are pushing out the retiree buyers who have traditionally anchored Naples’ condo market.
Recent market data reflects Shoaff’s observations: single-family homes in Naples have appreciated 3.2% year-over-year, while condos have declined by 8% on average. Shoaff contends that the spike in assessments signals more than a temporary adjustment – it is fundamentally changing the economics of condo ownership in post-hurricane Florida.
Fixed-Income Buyers Face New Barriers
Shoaff says the assessment problem is especially acute for Naples’ core demographic: retirees on fixed incomes who are sensitive to monthly expenses. “A lot of older retirees are very price sensitive, and they’re on a fixed income. An extra four or five hundred dollars per quarter is a lot of money to them,” Shoaff says.
He notes that the problem extends beyond the actual dollar amount to the uncertainty about future costs. “There’s been a lot of hype in the media about condos, and there have been some issues with condos raising their assessments, going up by 20 to 30 percent and kind of pricing a lot of people out of the market,” Shoaff says.
As a result, buyers now approach condos with greater skepticism, prioritizing assessment risk over traditional factors like location and amenities. “It’s all about the assessments right now, and the special assessments,” Shoaff says, indicating that these costs have become the main concern for buyers.
The increases Shoaff describes are primarily driven by hurricane repairs and rising insurance costs. “There are still special assessments happening due to Ian and the other storms over the last three years,” Shoaff explains. He emphasizes that these are not one-time charges, but ongoing costs that permanently alter the financial equation for condo owners.
Compounded Costs and Buyer Caution
Shoaff details how assessment fees, when combined with other ownership expenses, create affordability barriers that didn’t exist before the hurricanes. “Buyers are turned off when they come down here and see that they have to not only cover a mortgage, but also pay $600, $700, $800 per month just in assessments,” Shoaff says.
He explains that this stacking of costs – mortgage, assessments, insurance, and flood insurance for waterfront properties – creates monthly obligations that many retirees find unmanageable, even if they technically have the resources. The psychological impact of unpredictable, high monthly expenses is deterring buyers who might otherwise be able to afford the properties.
Shoaff notes that older condo buildings in flood-prone areas are particularly difficult to sell. “Where I still see some things not moving are the areas that were affected by flooding, and people are still concerned that that may happen again,” he says. “A lot of these low-lying areas closer to the water, a lot of the older construction on the first floor, if it’s a condo, that may flood again, and people realize that – they’re holding off on buying in those areas.”
This creates a cycle in which the properties most vulnerable to future storms face the highest insurance and assessment costs, making them the least attractive to buyers and hardest to sell.
Demand Shifts to Single-Family and New Construction
Shoaff reports that the assessment crisis is driving buyers away from condos and toward single-family homes, which don’t carry assessment risk, and toward new construction where builders offer incentives to offset costs.
“There are better deals in new construction because the builders are offering lower interest and more incentives,” Shoaff says. “A lot of people are going towards new builds right now.” Builders can absorb or subsidize some ownership costs that existing condo associations cannot, giving new inventory a competitive edge.
Shoaff believes this shift will lead to a prolonged performance gap between property types. “I believe a lot of the high-rise sales are still going to lag this year and maybe next year,” he says of the condo market outlook.
Even luxury waterfront condos, which once commanded premium prices, are affected. “Buyers are still out there paying that premium. But they’re kind of worried because of the high assessments that are still happening due to Ian and all the other storms,” Shoaff says.
This suggests that the assessment problem is deterring even affluent buyers, who are reconsidering condo purchases because of the uncertainty around future costs.
Wider Market Impacts
Shoaff’s analysis indicates that the assessment crisis could have broader consequences for the Naples housing market. If a significant portion of inventory becomes less attractive due to high assessments, overall market liquidity and transaction volume could decline.
The assessment issue also compounds other market challenges, including high insurance and flood risk. “Property insurance is high closer to the water,” Shoaff says, pointing out that waterfront condos face a triple burden: assessments, property insurance, and flood insurance, all of which add to affordability challenges.
Shoaff has also observed some longtime Naples residents leaving the area entirely. He notes that sellers in working-class neighborhoods like Golden Gate Estates are moving to states such as North Carolina, Tennessee, and Virginia. While Shoaff attributes this migration mainly to growing population and increased traffic, he acknowledges that rising costs may also play a role as some segments reach their affordability limits.
Navigating the Assessment Challenge
RE/MAX Hallmark Realty, Shoaff’s firm, is addressing the assessment challenge by focusing on buyer education and realistic pricing. Shoaff says he provides hands-on client service from contract to closing, including detailed analysis of assessments and total ownership costs to help buyers make informed decisions.
Shoaff’s business relies heavily on referrals – “90% of business is referral” – indicating that his approach to managing client expectations around costs is resonating with clients, even in a challenging market.
Whether Naples develops broader solutions to the assessment crisis – such as caps on assessments, alternative insurance models, or infrastructure improvements that reduce future costs – will likely determine how quickly the condo market can stabilize, and whether the current divide between condos and single-family homes becomes a lasting feature of the local real estate landscape.
