Are Florida's property tax changes enough to help Economy?

By
Real Estate Agent with Keller Williams Realty-Boca Market Center
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.

Comments (5)

Heather the Realtor Orlando, Lake Mary
LemonTree Realty - Orlando, FL
First Time Home Buyers, Bank Owned Homes
I think amendment 1 was a terrible move and I voted against it even though our association pulled so heavily for it. You take money from one area to give each person $300 or so a year discount on their taxes? And it's not the tax issue that is holding most back from purchasing it may be 1 aspect but it's not the only or main reason. Try living in other states where property taxes are much higher and they also pay a state income tax. 
Feb 06, 2008 12:05 PM
Deb Short
TENNNESSEE REALTY & AUCTION LLC - Sparta, TN

i am from arizona originally..i know what you mean!

i love tennessee where there is no state income tax

Feb 06, 2008 12:11 PM
John Walters
Frank Rubi Real Estate - Slidell, LA
Licensed in Louisiana
Mark the state and politicians have to help bite the bullet also.  The housing industry is such a huge part of any ones economy.
Feb 06, 2008 12:27 PM
Celeste Starmer, P.A.
Town & Country Realty - Deland, FL
Affordable Housing Partner

Mark

Living primarily in Volusia... I see things a little differently...Volusia County has no MONEY!!!  There are no jobs here...Most are making ...well look here at the median income for volusia

ok so .....let's see... http://www.risep-fiu.org/reports/WorkingPovertyLowWageWorkersInFlorida.pdf

Check out the link above... Working Poverty Low Wage Workers In Florida....

In the study anyone making less than $8.55 an hour working an entire year would be considered in the working poverty.  Well, that is roughly $17,500 a year.   That's before the IRS and i think we work about 4-5 months just to pay income taxes per year.  The problem is ALOT of things... wages being one of them

The builder's over ran the market with new home inventories, then we had predatory lending happening...

Predatory lending in my book is any lender not explaining the WHOLE process!  all the fees... how things can change...AND WILL CHANGE.

Then we had what I call FALSE BUYERS....some people call them investors...some people call them flippers.

 Right NOW the only people that I see buying are REAL BUYERS, people that are going to live in home and that need a home to live in!!! 

The home prices doubled and then some where I live but, nothing happened to the wages.  They went up a tad, but there is virtually NO INDUSTRY here, no technologies...

I don't think we have seen the bottom of the market.  Especially with inventories like they are.  There are plenty of sellers that still have lots of equity in there homes because they were not a victim of the early 2004-2005 years, they can reduce the asking price of their homes to attract buyers.  Anything will SELL when priced right.

Unfortunately greed is what happened to our economy, in my opinion mostly brought on my NEW HOME CONSTRUCTION, and poor practices in NEW HOME DEVELOPMENTS, where investors were allowed to come in and buy homes to FLIP at a higher price.  Again false buyers.

We are for sure in a recession.  All's you have to do is talk to the little people... gas is ridiculous, food has gone up because of costly fuel... and no one is making any money because Florida basically has three ways of earning capital... tourism, agriculture, and housing industry.  Around here even 50 bucks a week less can break a person.

I have a great attitude, and I keep making sales happen... however, I think it is going to be a few years before we see a change in the real estate market.  It will hopefully bottom out soon...and then we will be back to the moderate 2-5% gain per year in values.

Celeste

Feb 06, 2008 01:16 PM
Dawn Rodriguez
HomeRun Title - Hollywood, FL
HomeRun Title - Title Insurance Company
I also voted against Amendment 1. In my opinion, it won't do much to help the situation we are currently in. Which by the way is a recession. Something needs to happen soon, if not, we might be seeing a depression.
Feb 06, 2008 01:40 PM