Market Won’t Get Worse, Florida Mortgage Lenders Informed
The real estate markets in Manatee and Sarasota counties have hit rock bottom, will stay there for the next 12 to 18 months and then begin a 3 percent to 4 percent annual growth climb.
That’s the opinion of noted Florida economist and financial oracle Henry H. Fishkind, who shared his crystal ball gaze with 125 at Town Hall on Thursday, during a luncheon sponsored by the Lakewood Ranch Civic Action Forum.
“This is great news for real estate,” said Manatee County Commissioner Donna Hayes, who attended the speech. “There has been so much negative news swirling around the [Florida mortgage loan] industry.”
Lunch attendees Jack Hubbard and his wife, Karen, were happy with the news because they have had a home on the market in Greenbrook for 15 months.
“I’m thrilled,” said Jack Hubbard.
The Hubbards priced the home at $414,900 just before the market collapsed. Now, they have it listed at $319,900. After the meeting, Fishkind said if the Hubbards can hang on for awhile, they won’t need to drop the price anymore.
“I don’t know their financial shape, but if they can, they should stay with it,” Fishkind said. “We have definitely hit rock bottom. But it will take 12 to 18 months to chew through all this inventory.”
Fishkind held court for 45 minutes on the hot button topics, including real estate, property insurance, property taxes, and baby boomer migration to Florida.
Fishkind said there is a need to reduce property taxes in Florida, but he dislikes the plans proposed by Florida’s governor and House of Representatives.
He has a plan of his own.
The governor’s plan to double the homestead exemption and make it portable is ill-conceived because current homestead properties are protected by Save our Homes legislation and the revenue loss would be significant to local governments, Fishkind said.
The House plan to increase sales tax and eliminate property tax on homestead properties is a bad idea because it would be unfair to some counties, he continued.
“Orange County generates a tremendous amount of sales tax because of the attractions there,” Fishkind said. “They would pay billions more in sales tax and other counties would get the windfall benefits.”
Fishkind’s idea would be to eliminate the portion of property tax that goes to schools through school board taxes.
“That would cut property taxes for all property owners, residential and commercial, by a third,” Fishkind said, advocating a plan of attack that would increase the sales tax by two cents up to eight cents and increase the documentary stamp tax collected from each $100 sale from 70 cents to $1.25.
“It would give $8 billion in property tax savings for everyone in Florida,” Fishkind said.
Fishkind believes the sales tax and documentary stamp boost will be enough to sustain Florida schools.
Other Fishkind comments:
• “Commercial development builds the tax base and employment. That’s why a no-growth policy can be bad.”
• “Affordable housing will continue to get lip service and not much more. Density remains a four-letter word to most counties. The private sector would build affordable homes if it were profitable to do so.”
• “Baby boomers will still want to come to Florida when they retire. But instead of buying a home, they might want a resort- type situation where, if there is a hurricane, they can call the concierge to check things out. They will also want to be close to an airport for weekend trips because most of them will still be working into their 70s. That puts Sarasota-Bradenton in good shape.”
• “Florida’s population growth would have sustained 500,000 annually, but with the insurance and property tax issues we have [driving away potential Florida mortgage borrowers], I see it more at 350,000 to 375,000 annually. South Carolina and Tennessee will gain.”
• “In the short run, insurance costs will come down. Availability has improved because of the Florida Legislature. The issue is in the longer run. The future is difficult in the way we have our subsidized state insurance growing rather than shrinking.”
SOURCE: The Bradenton Herald
