Will lower property taxes be enough to get people to buy homes in South Florida? It may have helped 18 months ago but many other factors in home buying decision making have changed for the worse. And these property tax reforms only affect homesteaded properties which according to the City of Delray Beach website almost 45% of homes in Delray Beach do not even qualify for the homestead exemption. The insurance rates are still too high and property values still are considered too high. Even with lower property taxes and lower mortgage interest rates, people may not want to get locked into a new home mortgage because of the recession fears.
We can't know whether we are in a recession or not until we have had 2 consecutive quarters of negative GDP growth but economists are saying there is an 80% chance that we are already in a recession. And it is not just the Florida housing market that is having problems but the entire nation and the world's economy as well.
According to an article in the Sun Sentinel there are about 70,000 unsold single family homes and condos on the market right now in south Florida and at the rate sales are going it will be 2011 before we work through this inventory. This has caused the construction industry to grind to a halt. Many construction workers are now among the unemployed. Construction and the related industries of finance, insurance and real estate are about a third of Florida's economy.
The current fallout in the real estate market in Florida is a reflection of the nations economy as a whole. Can Florida's property tax changes spur the housing market or is it too little to late? Is the nations economy to far gone for local Florida tax changes to have any effect? Or maybe we need more reform? I'm just afraid that the Florida State legislature may be happy with the work they have accomplished and won't work towards a more comprehensive property tax overhaul.