Florida’s condo insurance crisis isn’t just a headline anymore. It’s fundamentally altering buying behavior in the luxury market, and the ripple effects are creating winners and losers across property segments. Vlado Konatar of Kona Realty is watching it play out in real time in Sarasota’s high-end market.
“I probably have 10 or more condo listings right now, and I’m just not seeing the activity,” Konatar explains. “Buyers come, they love the property, then they see the HOA breakdown and the predictions for next year. They get scared. I would be too.”
The problem stems from multiple converging factors. After structural failures in Miami and recent hurricane activity, insurance companies either left Florida entirely or dramatically increased rates. HOA fees have responded accordingly, sometimes tripling from previous years. Until the state addresses provider competition and brings rates down, Konatar expects the condo market to stagnate or worsen.
For condo owners trying to sell, the advice is straightforward but not encouraging. “Price it well, do necessary repairs to make it look perfect, market aggressively, and wait,” Konatar says. “We have to be patient. There’s a buyer out there, but it’s going to take time to find them.”
The contrast with single-family new construction couldn’t be sharper. While condos sit, custom homes are selling in days. Konatar sold his entire inventory by December, well ahead of the spring market, and is scrambling to source 10 to 20 new properties monthly.
The shift isn’t just about avoiding condo headaches. It’s about buyers demanding condo-level amenities in single-family format. Konatar’s projects now routinely feature saunas, cold plunges, putting greens, mini golf, basketball courts, and pickleball facilities.
“Buyers transitioning from luxury condos are used to certain amenities,” he explains. “We’re providing all of that in a single-family setting. When they see what’s possible, the value proposition becomes clear. Why deal with HOA uncertainty when you can have exclusive access to the same amenities?”
This amenity arms race is defining the current market. Properties offering something unique and custom, what Konatar calls “diamond properties,” are moving fastest. These aren’t just large homes. They’re highly customized residences that can’t be easily replicated.
The buyer profile for these properties has also shifted. Konatar is seeing significantly more buyers in their early 30s to early 40s, many relocating from California and New York with $2 to $5 million to spend. All cash.
“This is a different demographic than Sarasota traditionally attracted,” Konatar notes. “These are young families who’ve built substantial wealth and are looking for a specific lifestyle. They’re not retirees. They’re not snowbirds. They’re full-time residents who want the cultural amenities Sarasota offers alongside the coastal location.”
The psychology around interest rates adds another layer to buying decisions, though not in the obvious way. “When rates are high, buyers earn 5% just parking cash in savings accounts,” Konatar points out. “Last year, about 95% of our deals were cash, so the mortgage rate itself didn’t matter. But the psychology does. When rates drop, that safe return disappears, and suddenly deploying capital into real estate looks more attractive.”
Looking toward 2026, Konatar expects the divergence between property types to continue. He’s optimistic about entry-level single-family homes picking up momentum in the second and third quarters. But the condo market faces an uphill battle until state-level insurance reforms materialize.
“The government needs to figure out how to bring new insurance providers to Florida and create real competition,” Konatar says. “Until that happens, HOA fees will stay elevated or get worse. That’s going to continue suppressing the condo market.”
For the luxury new construction segment, particularly single-family homes with extensive amenities, he expects strong performance throughout the year. “We ended last year up about 5%, which sets a good benchmark. I think this year will be stronger, especially if rates move toward 5%. The demand is there. The challenge is finding enough inventory that meets buyer specifications.”
Konatar sees Sarasota maintaining its position as an outlier within Florida’s broader market struggles. “Sarasota operates as its own ecosystem,” he explains. “The families who built wealth here over the last century still have it. New buyers are attracted to the lifestyle and culture, not just the real estate. They’re coming for the city, and the property is secondary.”
The insurance crisis has accelerated a trend that was already developing: a flight toward single-family new construction with luxury amenities and away from the complications of condo ownership. For developers and agents positioned in that space, the opportunity is substantial. For those heavily invested in the condo market, the path forward remains uncertain until meaningful policy changes emerge at the state level.
Vlado Konatar is the founder of Kona Realty Group, a Sarasota-based firm specializing in luxury new construction and high-end residential real estate. With over 11 years of experience in the Florida market, Konatar works closely with developers on projects throughout the Sarasota area. Learn more at konarealtygroup.com.
Disclosure: Individuals or companies mentioned may have a commercial relationship with KeyCrew.