Central Florida Housing Market: Behind the Numbers

And now, for a Central Florida housing market report.
Where are Florida mortgage applications down? Everywhere.
Where is the most troubled Florida real estate? low-end condos.
Where are values level? Established neighborhoods.
What prices are rising? Lakefront property.

That is a synopsis of what lies behind the property tax rolls appraisers reported to the state by Monday, the Orlando Sentinel reports.

Overall the news for Central Florida housing market underscored a trend that began in about 2005, when high insurance and property taxes curbed buyers’ appetite for coastal properties.

While Orange County’s tax base increased by 16 percent, Volusia County property values rose by less than half that amount.

Even within Volusia, inland property owners saw their values increase much more than their coastal neighbors.

Elsewhere in Central Florida, tax rolls grew about 10 percent, which varies slightly from the preliminary figures released a month ago.

“Coastal areas are where we’re seeing the lowest of the lows,” said Volusia County Property Appraiser Morgan Gilreath. “The market extended itself out the furthest. You can only pull a rubber band so far before it snaps back.”

Beyond the disparities between inland and coastal areas, appraisers said the tax rolls for 2006 show the beginning of trends that have grown during 2007.

Orange County’s growth in real-estate wealth was due in part to $5 billion worth of new construction, Property Appraiser Bill Donegan said.

Next year, eight major condominium projects will come on line, but Florida mortgage applicants could find that condo prices could suffer.

“The condo market is one that I think that you’re going to see somewhat of a price break because so many were bought by investors,” Donegan said.

“People said: ‘I’ll buy it and flip it tomorrow.’ So many of them bought it and they can’t flip it now.”

The most recent numbers reflect a 24 percent increase in new-home values, but don’t expect that to happen again anytime soon, Donegan said.

Much of Florida has seen a phenomenal run-up in property values in recent years, filling local government coffers with tax revenue.

The slowdown of that trend comes at the same time cities and counties are continuing to wrestle with insurance woes and now property tax cuts.

Central Florida’s elected appraisers reported what Florida real estate agents have been saying for months - sales are down, but home prices have not dipped much in established areas.

While “price reduced” banners are popping up on residential real-estate signs, house values in long-standing subdivisions are holding steady so far, Donegan added.

“We have not seen prices dropping in established neighborhoods, but we’re early in the year,” he added.

Seminole County Property Appraiser David Johnson said he has seen some Florida home prices soften in new subdivisions.

Particularly in new neighborhoods with prices from $350,000 to $500,000, home builders are offering buyers incentives and sometimes discounting prices by as much as 20 percent.

Investors who purchased new houses before construction are trying to sell and recoup their money. That all forces home sellers in new areas to drop their prices, he said.

Throughout Seminole, the demand for condominiums in the mid-$100,000s price range has dropped enough that prices are down about 10 percent, which is great news for Florida home mortgage applicants.

In contrast, appraisers said they saw no drop in prices for custom homes in the price range of $750,000 and for waterfront lots.

Next year, Johnson cautioned, Seminole’s tax roll will not get a billion-dollar boost from new construction, as it did this year.

Like other inland counties, Lake experienced an 11 percent increase in taxable values, but Frank Royce, chief deputy in the county Property Appraiser’s Office, said residents should not expect to see similar growth when next year’s tax rolls are released.

“We’re at the tail end of that boom period. We hear all the time that the market is down. It’s down. It’s down. And it is down as far as the number of houses that are selling and the amount of time they are on the market, but prices are not dropping on house resales.”

Meanwhile, Royce estimated that the number of Florida mortgage loan foreclosures quadrupled in Lake during the past year.

SOURCE: Orlando Sentinel