Property Taxes = Florida's Downfall?

Wow!!! I love coming here for a little optimistic pick-me-up!! Thanks!!! :clap_1:

Excellent article.

We are looking to buy a home, and this is definitely an issue for us.

We owned property on Hilton Head Island, and quite frankly the property taxes there were not much different than they are here in Walton Co. The insurance is quite a bit cheaper here than in South Carolina though.

We owned property on Hilton Head Island, and quite frankly the property taxes there were not much different than they are here in Walton Co. The insurance is quite a bit cheaper here than in South Carolina though.

SC is more equitable w/ reassesments and obviuosly there is no Save our Homes{screw all newcomers and anyone desiring to move].

Cil, though you're in a position where your home will fall under the homestead exemption laws, and that really helps- taxes can't go up more than 3% a year on homesteaded homes without voter permission.

Cil, though you're in a position where your home will fall under the homestead exemption laws, and that really helps- taxes can't go up more than 3% a year on homesteaded homes without voter permission.

Very close, but to clarify for those who do not know, the taxes can go up more than 3% (via higher millage rates), but the "assessed value" cannot increase more than 3% per year on homesteaded property in Florida after you own the home for one year.

Though generally voter permission is needed to raise the millage rate beyond a certain point. We've had to get voter approval of fire department millage increases where I live a couple times in recent years, first to buy a new ladder truck, and then last year to fund sending all the firefighters to paramedic school and increasing their pay afterwards to reward the higher skill set.

We owned property on Hilton Head Island, and quite frankly the property taxes there were not much different than they are here in Walton Co. The insurance is quite a bit cheaper here than in South Carolina though.

The price of insurance in Florida is going to go up BIG TIME in the next couple of months. The taxes are the first nail in the coffin for the second/investment home/retail market, the insurance will definitely be the second!

The price of insurance in Florida is going to go up BIG TIME in the next couple of months. The taxes are the first nail in the coffin for the second/investment home/retail market, the insurance will definitely be the second!

Could you provide some details and/or a link? Where do you get your information? Do you include my insurance company in your statement? I would like to be prepared for how much my insurance will be going up in the next couple of months. How much is "BIG TIME"?

I got my insurance bill for next year and quite to my surprise it didn't go up anywhere near the catastrophic levels our prognosticator Shelly stated.

Yet, I know of other people whose insurance rates recently increased 80%, and they are Bayfront, as opposed to Gulf Front.

We're 4 houses from the Gulf at some of the higher elevations. Maybe that's why it didn't go up so much.

SHELLY...I have some questions. Do you own property in SoWal? If so, have your insurance and property tax hikes caused you to consider selling? I am very interested to know what your connection to the area is and if you have taken the time to ENJOY the beauty and uniqueness that attracts so many to 30-A. Thanks for your reply.

Recently, I heard someone say something which I believe to ring very true. "In the recent past, people bought out of fear (fear that they would not be able to own if prices kept escalating). In the near future, people will be buying out of love for the area."

If that is the case, I wonder if they will see past the property taxes and insurance. My guess is that it won't matter too much, if they can afford today's prices anyway.

I got my insurance bill for next year and quite to my surprise it didn't go up anywhere near the catastrophic levels our prognosticator Shelly stated.

That is probably because the "little old lady on fixed income who lives 60 miles from the coast in a one-bedroom trailer" is now subsidizing Citizen's insurance--give it time, and another season.

What are you all complaining about?
Taxes in Florida are dirt cheap compared to up North.

and if you live in Florida you are not paying the 6% income taxes I am here in Ga, and we still have the 49th ranked school system in the U.S. As we say here, thank goodness for South Carolina (ranked 50th)

We received notice this May that our wind ins (currently covered by Citizens) was being assumed by Florida Peninsula and the rates are actually lower. Any one else receive this change in their insurance?

Ah-Ha!....made ya' look

As a wise professor once told me, "you know you've got'em when the best they can do is revert to personal attacks."

I study behavioral investing and the herd mentality--which leads to my fascination of anomalies such as the dot-com era, bankrupt/penny stock investing and now the real estate/condo rush.

The only thing real estate bulls (or those who are overweight in real estate now) want to hear are things that make them feel good and give them comfort about where they are right now. They're not looking for truth, they're looking for validation and seek out people who support the conclusions they've already reached. So I'm not surprised that a contrarian view would tend to rub some the wrong way.

As for the property tax/insurance issues with Florida real estate--it is a problem and no amount of sugarcoating is going to change that fact.

SHELLY...please don't think that I have in any way "personally attacked" you. And, you didn't make me look....I try to respect each and every poster on this board. I have learned so much about many subjects from the many and varied folks that take the time to post here. That said, I had a real interest in hearing your connection to the area. To me, the "scrooge/chicken little" approach is one dimensional and gives you less credibility. In my quest to find your more humane side, I think you have misinterpreted my intention. My questions remain on the table for your response.

What next, an Oija board as investment tool? Nothing complicated about "behaviorial investing." It's called Capitalism. The boom-and-bust market dynamic has always been with us. The wise investor asks themselves where the less vulnerable (i.e., those least effected by recession and Wall Street fluctuations) market segment will want to invest at the end of the day, following the ebb and flow. Ask yourself what factors put a place on the map in the first place, what makes it special, and how well those special characteristics are likely to endure under the stewardship of its caretakers. Historically, condos have been a less dynamic segment of the housing market, because they are so often overbuilt, easy to throw up. Once an area limits condo development, you start to see some real appreciation. Raw land in abundance is the same, because it is speculative for a long time before real value is created. The South Walton market has been begging a cooling for some time now, with pre-construction condos doubling and tripling in value before construction begins and many lots being created simply by virtue of the amount of undeveloped land at relatively low prices. It is actually a healthy thing for the area.

It is obvious that there is a current lull in the real estate market in South Walton across the boards, just by looking at the amount of inventory and slower sales. This is attributable to many factors: overspeculation, high market values reducing the pool of qualified investors, the aftermath of hurricane season 2005 and how it might effect costs, and increased interest rates. Concern has also been expressed about increased taxes and insurance rates. However, assessments in Walton County are still lagging considerably relative to selling prices and insurance rates have increased little or none for many people living near the water. This is because the State of Florida has kept insurance companies from cherry-picking their clientele and because they recognize the contribution that waterfront development makes to their revenue basket. So everyone in the State gets to share in the pain, thus evening out costs. How many people out there have actually been dropped by insurance carriers without being picked up by another one? This is a myth and a scare tactic.

Anytime there is considerable value created for some wise investors, there will be a Chicken Little who would like nothing more than to have those fortunate investors made the fool. They are usually the ones poised to pounce on the misfortunes of others. And that is called bottom feeding.

Anytime there is considerable value created for some wise investors, there will be a Chicken Little who would like nothing more than to have those fortunate investors made the fool. They are usually the ones poised to pounce on the misfortunes of others. And that is called bottom feeding.

Excellent post as usual Donna. I was beginning to think that SHELLY was like those people who post on message boards about how a stock is going to fall because they are looking to sell it short. This explanation is more interesting and unexpected. SHELLY, thanks for sharing a little more about your purpose here. It does clear up a lot. But I am a little concerned -- are you studying the posters here, and using the responses to your comments to bolster your viewpoint (agenda)?

Because generally I don't think most people here have blinders on. We have discussed the RE market difficulties and insurance woes ad nauseum. And yes, my insurance went up 80 percent after my claim from Ivan, so I do agree that insurance is going to be the sticky wicket for at least a couple of years. I'm up in the air about property taxes. If people really stop buying second homes, then yes, the fact that taxes go up disproportionately in Florida for non-homesteaders will be a factor. But the factors on the other side in SoWal's favor include: 1) Baby boomers and that wealth transfer people keep talking about, 2) higher elevation, 3) new airport and thus a greater audience, 4) the general feel of the area.

I don't feel like part of "the herd" at all, unless you count tried-and-true strategies like buying Vanguard funds and buying and holding real estate. I usually have my own clear view of what to do and when we purchased our properties, we did it with long-term prospects in mind. We were and are fully prepared to carry them as long as it takes. So I hope you are not looking here for those who think with the herd. If you want to find those people, go down to Miami or over to Las Vegas and talk to some of the waiters/investors getting into condos.

There were foolish people who got into the market in SoWal for sure. I know at least one of them who is having trouble as a result. But not all of us are like that. My husband and I were pure investors at the start but our idea of flipping was selling in three years, so we didn't do anything we weren't comfortable with. Also, as I've written before, we are completely in love with the area and plan to carry at least one of the two investments for many many years.

When real estate speculation popped up on my radar (for my study of herd mentality) in the last couple of years, unlike my previous studies--this one was more personal. Other "bubbles (if you will)" such as tech, bankrupt stocks, beanie babies and the like didn't result in widespread and permanent destruction of the beauty and natural resources of my home state bought on by the likes of real estate speculation.

Clear cutting of trees, and destruction of dunes and wildlife habitats in the name of quick profits was difficult to watch. Then came the hurricanes--Mother Nature's attempt to "fight back" against man's onslaught on her territory maybe? But I had to keep my emotions in check and keep looking at the numbers, watching the trends and evaluating the economy.

All the damage aside, I thoroughly enjoyed watching the state and national real estate frenzy over the last couple of years since there are so many dimensions and an amusing cast of characters--Realtors, owners, speculators/investors, mortgage brokers, developers, appraisers, state and local government, RE bulls & bears, insurers, publications (WSJ, Barrons, Florida Realtors magazine), FSBO publications, CNBC & Fox pundits, etc., etc.

In the last year I've watched the Fed choke off the easy money, the impact of property taxes/insurance rates, speculators running for the exits and "Reduced for Quick Sale" signs and "open house" balloons and banners proliferate. The "baby boomer" buyers seem to be the industry's remaining trump card (for every town, city, hamlet and condo development NATIONWIDE). Moreover, the 2nd argument, "they ain't making any more land" doesn't wash--it isn't like someone chews up beachfront and...er...."deposits" it in Toledo (except maybe a Cat 7 hurricane--and that ain't good). For those who've studied the economy and the history of the housing market know the "herd" that invests for big profits following those lines of reasoning will find themselves driven over the cliff. The same line of reasoning spelled trouble for folks who bought all the way down the other side of NASDAQ 5000 or loaded up on "Stumpy the Beaver" beanie babies to fund their future. (Only those last two frenzies didn't leave our beautiful state in ruins.)

Shelly, if you don't already read it, there's a good blog for recreational gloomin' and doomin' about the housing market here-

http://thehousingbubble2.blogspot.com/

Lots of hard data that's been prediction a slowdown for a while, as well as some fun rubbernecking about how insane the California housing market is right now. ($300K for a 700 square foot house in Compton? I'll pass on that one)


I'm of the opinion that housing in the Panhandle was somewhat undervalued in 2001, and is somewhat to really overvalued now depending on location and type (single family v. condo). Next five years are going to be interesting for the area because there are 3-4 different huge players and actions that are going to really influence housing in the area and it's going to play out in some interesting ways. Does hitting buildout south of Eglin trump rising interest rates? How much is the PCB condo crash going to affect areas further west? What does BRAC change? Do people really all want to buy a house in Freeport?

It's all a big puzzle, and I love puzzles.