Real Estate Values Set Records in Tampa; Officials Debate Property Tax Relief
Residential real estate values rose to new highs this year in the Tampa area, setting a record for the biggest single-year leap in property dollar-value in Hillsborough County history.
On average, the values of area homes and businesses rose 20 percent over last year. Traditionally, annual increases have been closer to 8 percent.
“It’s just amazing,” said Tim Wilmath, Director of Valuation for the Hillsborough County property appraiser’s office.
Industry experts attribute the increase to this year’s red hot housing market, spurred in part by low Florida home loan rates.
For the local government, a booming housing market mean millions in property taxes, giving ammunition to city council members and county commissioners who think residents deserve tax breaks. Other government officials point out, however, that although they are collecting more money, government expenses are also going up — energy prices, personnel costs and insurance are all increasing steadily.
Those who will pay the most because of increased property values are those who bought homes in the past year, commercial real estate owners, and those with second homes who can’t claim a homestead exemption. People claiming such an exemption will receive property tax protection thanks to an amendment to the Florida state constitution that caps annual assessment increases on homestead properties at around 3 percent.
Hillsborough County will see a $14.1 billion increase in taxable values, a 22 percent boost that leaves officials debating what to do with the cash. County Administrator Pat Bean and the county commissioners are considering property tax rate reductions, but the board also wants to use the increase in property tax revenue to fund more transportation projects.
Overall, Tampa real estate values increased about 21 percent, from $22 billion to nearly $27 billion, amounting to about $28 million in additional funds for the city budget, according to Bonnie Wise, director of revenue. Much of the increase came from Community Redevelopment Areas, where development has boomed and money will be continue to be spent.
“This is good news with the city of Tampa, and I think we should share that good news with our citizens,” said Councilman Shawn Harrison, who is urging property tax relief for residents in his run for re-election. “Can we afford to give $2.8 million of that back? Sure we can.”
Others caution that the city’s expenses continue to rise and the real estate market has peaked as Florida home mortgage loan rates edge closer to 7 percent, meaning the current run of record property value increases may soon end.
Last year, the climate was so hot that homes in some neighborhoods went up by as much as $75,000 in one day. But this May the median price in the Tampa-St. Petersburg-Clearwater metro area was $230,900, up just $5,400 from April, the Florida Association of Realtors report.
Real estate has been a driving force in the local economy and a slowdown would have a widespread, lasting impact, said Tim Rogers, economist with Briefing.com. Just as the boom supplied several industries with profits, several are now poised to take a hit.
“If there aren’t as many homes built, we’ll see less employment in construction. People won’t be buying as much furniture, appliances and other things for their homes. Some businesses may not need as many employees,” Rogers said.
The change affecting real estate the most, said Keller Williams agent Rande Friedman, is the current inventory of homes on the market and how long they stay there before being purchased. As of Friday, 33,528 existing homes were on the market — nearly four times the amount for sale at this time last year.
There are other warning signs as well. The PMI Mortgage Insurance Co., one of the largest insurers of Florida home loans, said in its most recent risk index analysis that the Tampa metro area has a 29 percent chance of seeing home price declines in the next two years.
