South Florida home prices keep plunging

South Florida home prices keep plunging

There are 178 comments on the South Florida Sun-Sentinel story from Feb 25, 2009, titled South Florida home prices keep plunging. In it, South Florida Sun-Sentinel reports that:

Prices of existing homes and condominiums continue to plummet in South Florida as the weak housing market searches for a bottom.

Join the discussion below, or Read more at South Florida Sun-Sentinel.

B Madoff

Lake Worth, FL

#174 Feb 26, 2009
What? Let er crash I got billions, me and my banker buddies are gettin bailed out with your tax dollars. Eat it small fry!

Since: Jan 07

Hialeah, FL

#175 Feb 26, 2009
That is true to an extent. The biggest question (IMHO) is why didn't the mill rates fall from 2000-2006? Home prices went up 100-300%, and the mill rates remained constant? That's the real crime, and, again, IMHO, I think that its because of SOH that the mill rates didn't fall. There was no political pressure to reduce them because all the voters have SOH protection, and therefore don't care about the assessed values.

My father's home in NY was reappraised a few years ago at 10X his previous appraisial (housing bubble wasn't just FL, and it had been a long time since they did the appraisals). You know what happened to his taxes? They went DOWN! Only in FL do we have this idea that 10X increase in value means 10X taxes!! They lowered the mill rates to adjust for the new home values, and now, because the cost of services hadn't increased much, everyone pretty much still pays the same tax bill they had many years before (unless you made big improvements to changes to your home). It's all about RELATIVE value in the rest of the country. SOH has made it about ABSOLUTE value, which, during the bubble, was a disaster for everyone not covered by SOH.

If everyone's home values go up 10X tomorrow, does that mean we all pay 10X in taxes? Only in FL does that mentality even exist, your home value is only one part of your tax bill. The MILL RATE X value is what determines your tax bill. The mill rate remained unchanged while prices went up 2-4X. That's the real crime of SOH.
I AM A1ACharles Dammit wrote:
<quoted text>
I agree. The rapidly rising cost of taxes, a home, and insurance are a symptoms of an overheated RE market.
SOH did not raise your taxes, the cost of buying your home in an overheated market did.
DAS

Miami, FL

#176 Feb 26, 2009
Anyone who buys now is a FOOL
DAS

Miami, FL

#177 Feb 26, 2009
When you buy in Florida,add another 8-15K on your House payments for insurance,taxes,ELECTRIC Water,Garbage you name it this Dump Has it
Mark

Fort Lauderdale, FL

#178 Feb 26, 2009
Mike, you are absolutely correct. Only people who have owned property in other states understand how flawed our state's system of real estate taxation really is! For a time, I owned a home in North Carolina. First of all, property is on an 8-year assessment cycle, none of this once a year insanity. Further, state law demands revenue neutrality. That means taxing bodies are only allowed to collect the same amount as the previous year plus 3% or inflation, whichever is lower, plus growth (ie., new construction). So when property is reassessed, millage (tax rates) are forced to come down. It doesn't matter when you bought your house or whether you are a full time resident or not or whether it is an income property, you will roughly have the same tax bill as every other similar property in your neighborhood and you do not live in fear of rising property values.

REVENUE needs to be capped, not assesments.
DAS

Miami, FL

#179 Feb 26, 2009
Yea Good Idea Go ahead..........

JPMorgan Chase warned of more housing weakness across its mortgage portfolio this year and also said it would cut more jobs related to its purchase of failed savings and loan Washington Mutual than originally planned.

During presentations at the company's investor day in New York Thursday, executives noted that home-equity loan losses could climb as high as $1.4 billion per quarter this year.

The New York City-based bank said "non-credit impaired" loans would suffer in 2009 due in large part to the ongoing decline in home prices across the country, as well as the weaker economic climate.

"We obviously believe that home equity losses will continue to grow for some period of time," said Charlie Scharf, head of JPMorgan Chase's consumer banking business.

So far, the worst losses have been centered in states that have been hit hardest by the housing crisis, including Florida, California and Nevada.

Since: Jan 07

Hialeah, FL

#180 Feb 26, 2009
My father is actually a tax professor at a large NJ college; the first time we discussed SOH we got into a big argument because he was convinced that I was wrong about how the system worked. Several days later he called me back to apologize; saying that SOH was the most incredibly flawed taxing scheme he had ever seen in practice. His words were "Don't people realize that this will lead to run-away taxation", to which my only answer was "Apparently not". He then mentioned that you'd have to be nuts to buy a 2nd home in FL given the SOH tax system, you're almost assured a completely unstoppable tax increase at the cheering of the residents. I had to agree.

The thing that most people just can't get their heads around is that if we had a revenue neutral tax system put in place (instead of SOH), we would all have a tax rate today of about 1%(instead of the 2% we currently pay). SOH has ripped off this state like no other law that has ever been passed, nothing has increased revenues faster then SOH, and yet, the people still (because they don't understand the interaction between mill rates, appraisals, and tax bills) support it. What most people don't realize, and nobody will ever tell them, is that even those with big SOH exemptions are still victims of the system. The only people who really make out with the SOH system is the rich, who own big homes, have owned them for 20 years, and have a tax bill of 5K on a 5M dollar home. The 2-3K that most people "save" because of SOH is nothing compared to the 100K+ that many of the mansions across S. FL have sheltered from taxation. Most people are losers on this system, unless you bought 20+ years ago, or have a VERY expensive home (also bought a long time ago) your a victim of the SOH system.

Oh well, perhaps one day the people will wake up. Until then, we have crushed the RE market in this state, and made it the most tax unfriendly state in the union for 2nd home owners/investors. Great idea when we have the biggest glut of homes in history, right?
Mark wrote:
Mike, you are absolutely correct. Only people who have owned property in other states understand how flawed our state's system of real estate taxation really is! For a time, I owned a home in North Carolina. First of all, property is on an 8-year assessment cycle, none of this once a year insanity. Further, state law demands revenue neutrality. That means taxing bodies are only allowed to collect the same amount as the previous year plus 3% or inflation, whichever is lower, plus growth (ie., new construction). So when property is reassessed, millage (tax rates) are forced to come down. It doesn't matter when you bought your house or whether you are a full time resident or not or whether it is an income property, you will roughly have the same tax bill as every other similar property in your neighborhood and you do not live in fear of rising property values.
REVENUE needs to be capped, not assesments.
Cowdogs2

Mobile, AL

#182 Feb 26, 2009
Oy. Can we still go to da oily-boyd specials?
levi

Miami, FL

#183 Feb 26, 2009
Mark wrote:
REVENUE needs to be capped, not assesments.
EXACTLY!!!!!!

Crist grow some balls and make REAL change
Realist

United States

#184 Feb 26, 2009
I lived in NC as well. A big difference in North Carolina is that they have a 7% state income tax which means they do not tend to rely as heavily on real property taxes (so the millages are not as high). They also had personal property taxes, a tax on dogs, and a variety of other taxes to supplement revenue.

I was having a discussion with a CPA friend who lives in Asheville and when we ran the numbers between tax burdens in NC and Florida it came out pretty similar.

I think the income tax way of raising revenue makes more sense than the system we have in place in Florida (since you pay tax on what you actually earn versus taxing the value of an illiquid asset). The income tax scenario may be even more favorable to someone who has lost a job since their tax burden would inevitably be decreased as income declined. I don't think we are going to see any constitutional approval in Florida for an income tax so its probably a moot point anyway.
Mark wrote:
Mike, you are absolutely correct. Only people who have owned property in other states understand how flawed our state's system of real estate taxation really is! For a time, I owned a home in North Carolina. First of all, property is on an 8-year assessment cycle, none of this once a year insanity. Further, state law demands revenue neutrality. That means taxing bodies are only allowed to collect the same amount as the previous year plus 3% or inflation, whichever is lower, plus growth (ie., new construction). So when property is reassessed, millage (tax rates) are forced to come down. It doesn't matter when you bought your house or whether you are a full time resident or not or whether it is an income property, you will roughly have the same tax bill as every other similar property in your neighborhood and you do not live in fear of rising property values.
REVENUE needs to be capped, not assesments.
Joe the Plumber

United States

#185 Feb 26, 2009
Why would anyone want to take a chance in todays times to buy a new home? There are so many uncertainties here...When in doubt..get out!
Plumber the Joe

Miami, FL

#186 Feb 26, 2009
Joe the Plumber wrote:
Why would anyone want to take a chance in todays times to buy a new home? There are so many uncertainties here...When in doubt..get out!
The time to buy is when everyone's selling. The time not to buy is when everyone's buying.
Plumber the Joe

Miami, FL

#187 Feb 26, 2009
Realist wrote:
I lived in NC as well. A big difference in North Carolina is that they have a 7% state income tax which means they do not tend to rely as heavily on real property taxes (so the millages are not as high). They also had personal property taxes, a tax on dogs, and a variety of other taxes to supplement revenue.
I was having a discussion with a CPA friend who lives in Asheville and when we ran the numbers between tax burdens in NC and Florida it came out pretty similar.
I think the income tax way of raising revenue makes more sense than the system we have in place in Florida (since you pay tax on what you actually earn versus taxing the value of an illiquid asset). The income tax scenario may be even more favorable to someone who has lost a job since their tax burden would inevitably be decreased as income declined. I don't think we are going to see any constitutional approval in Florida for an income tax so its probably a moot point anyway.
<quoted text>
One of the few financial incentives Florida has left for people is no state income tax. Ask anyone from NJ or CA how they like paying both income and property taxes.
Mark

Fort Lauderdale, FL

#189 Feb 26, 2009
You will never see me supporting an income tax. That being said, I found North Carolina to have a relatively high tax burden. I paid 1% in property taxes, but when you add in the income tax, the sales tax in Wake county which was 7%,(there was even a 2% tax on food purchased in a grocery store, which I found to be outrageous), and you also paid a property tax on your cars, boats, etc.

I do think Florida can do a better job by not relying so much on the property tax, and I would only be in favor of an increase in sales taxes if it were coupled with reform in the way property taxes are levied.
Broward Resident

United States

#190 Feb 26, 2009
Flipper, oh Flippper, where's that can't lose mentality now. Have you made your million or are you looking at that $90K house you paid $400k for and wondering where you went wrong? It was a sure thing
Plumber the Joe

Miami, FL

#191 Feb 26, 2009
Funny thing, property taxes weren't nearly the hot issue back in the 1990's when property was cheap. Since it looks like we're well on our way back to 1990's prices, maybe Crist will dodge a bullet.

Since: Jun 08

Miami, FL

#192 Feb 26, 2009
Millionaire Freebie wrote:
<quoted text>
That is where you made your mistake. When something increases 10%, you multiply it by 110%, by adding 100 to the "increase" number.
So, if it increased 175%, that means 100K *(100+175)%. Your match was right, you just forgot the initial 100% of the original property value.
I hope this helps.
True!
Oregon gator

Warwick, RI

#193 Feb 26, 2009
Buying is good its a real sham....these buyers go first class buy something they can't afford live big time for 5 years and then walk off for us to pay for their pleasure.....maybe I am old fashion but I only buy what I can pay for.....and within my means of comfortbale life style.. I am 67 and never had a new home..
so why should people come in from other countries not even show a ss number and live high and mighty walk off and here we are are paying for their mess.
Sure

United States

#195 Feb 26, 2009
Plumber the Joe wrote:
<quoted text>
The time to buy is when everyone's selling. The time not to buy is when everyone's buying.
Is this called the "Catch a Falling Knife" financial strategy?

Let's apply your logic to the stock market.

In September 2008, everyone was selling their stocks -- in fact, the S&P dropped nearly 10% during that month.

Similarly, in October 2008, everyone was selling their stocks -- during that month, the S&P 500 dropped nearly 18%.

By your logic, September and October 2008 would have been wonderful times to buy stocks.

What's happened since?

Since early September 2008 and October 2008, the S&P 500 is down 40% and 34% respectively.
I AM A1ACharles Dammit

West Palm Beach, FL

#196 Feb 26, 2009
Now we subsidize the marine industry's tax bill.

Great.

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