The Florida Exit Is On: Foreclosure Investors Are Just Getting Started

Something is happening in South Florida real estate, and many still refuse to acknowledge it. After years of frenzy, optimism, and record-breaking prices, the harsh reality is setting in: investing in South Florida is no longer a smart move for most buyers. This isn’t just a cycle or a short-term adjustment. It’s a fundamental shift in the economics of owning property in the region.

Over the past three years, home prices in South Florida soared due to a perfect storm of low interest rates, pandemic-driven demand, stimulus-fueled cash in the market, and foreclosure moratoriums. However, while other markets across the U.S. are adjusting, prices in places like Miami, Fort Lauderdale, and West Palm Beach remain stubbornly high, despite rising inventory and waning buyer demand. Condos, in particular, are seeing price cuts after three years of buildup, but it’s not enough to attract buyers back into a market that has become both overpriced and financially toxic.

The cost of owning real estate in South Florida has become a nightmare. Insurance premiums have more than tripled since 2020, with average homeowner’s policies now costing over $6,000 per year according to the Insurance Information Institute. HOA fees are skyrocketing, especially after the new mandatory inspections and reserve funding laws were enacted following the Surfside collapse. According to Redfin, HOA dues in Florida have increased by more than 60 percent since 2019. In some buildings, owners are now being asked to pay $1,000 or more per month in fees that often include bloated budgets with questionable expense justifications. Property taxes have also surged. In cities like Miami and Fort Lauderdale, local governments have raised valuations and rates, resulting in tax bills that have increased by 20 to 50 percent over the last few years. At the same time, municipal services are declining, with slower permit approvals, more red tape, and growing dissatisfaction among residents.

Meanwhile, rental demand is softening, particularly for mid- to low-income properties. Florida experienced a net out-migration in several key metropolitan areas in late 2023 and early 2024, with residents citing affordability and insurance costs as the primary reasons for leaving, as reported by the University of Florida’s Bureau of Economic and Business Research. Investors who bought in at inflated prices are finding themselves underwater, unable to sell in a saturated market and unable to generate returns. If you own a property outright with no mortgage, you’re lucky to clear a 2 percent annual net return after taxes, insurance, and HOA. If you have financing, chances are you’re losing money every month.

Can this be fixed? Partially, but not anytime soon. HOA regulation is still weak in Florida. Management companies are largely unregulated, and there is no real oversight on how they spend money. The state has proposed some reforms, but implementation is slow, and opposition is strong. Insurance reform is being discussed in Tallahassee, but even if bills are passed, the effects would take years to stabilize the market. Property tax relief seems unlikely given municipal budget constraints and rising infrastructure costs. In short, while some changes may happen over time, the market won’t become healthy again overnight.

The truth is that the Florida real estate market, particularly in the southeastern region, is going through a painful correction. And for many investors, that means losses. The dream of endless appreciation and quick flips is gone, and the harsh math of ownership is now exposed. But in the middle of this chaos, a window is opening, not for speculators looking to time the bottom, but for strategic foreclosure investors ready to step in when others are stepping out.

With rental income dropping and expenses exploding, many landlords are reaching their breaking point. Between unaffordable insurance, ever-growing HOA demands, and shrinking returns, some property owners are making the hard decision to simply walk away. They are letting go of properties they can’t sell and can’t afford to hold, even if it means losing equity. That’s already triggering a wave of early-stage defaults, and it’s just the beginning.

Foreclosures are rising, not because people lost their jobs, but because they’re trapped in bad investments. And that’s where the opportunity lies. When properties hit the market through foreclosure, they’re often heavily discounted, not just because of their condition, but also because the original owners gave up fighting a system they could no longer afford to participate in.

This isn’t the type of market where you make fast money. But it’s the kind where long-term, well-researched plays can generate real, lasting value. If you understand how to identify legal risks, navigate auctions, and source deals before they hit the radar, South Florida could become one of the most profitable distressed markets in the country.

It won’t be easy. But this kind of chaos is where real investors thrive. And that’s why now, more than ever, foreclosures deserve a second look.

Fernando Alonso

Fernando Alonso is the founder of Refis LLC, a firm established in
2008 specializing in research and investment strategies in Florida foreclosures. He holds two master’s degrees earned in the U.S. and has received academic recognitions from Wharton, Columbia, and MIT. With over 15 years of experience, Fernando has been actively involved in servicing, teaching, and guiding investors through the complexities of the foreclosure market.