On the first of each month I gather the numbers from the MLS for the prior month's activity. This helps me spot trends and keep up with the local real estate market. Here's what they look like for April 2006:

MLS Wide (Dade, Broward, and Palm Beach Counties)
SINGLE FAMILY and CONDO/TH/VILLAS

Data Item	Apr '05	Apr '06	% Change
New Listings	13,713	21,212	+55%
Closed Sales	9,644	5,233	-46%

• 4,580 Listings went under contract in April
• 78,386 Listings are currently active and available For the entire MLS
• At this rate it would take more than 17 months to get contracts for current inventory.
• Supply/Demand Ratio (New Inventory to Contracts Accepted) is 4.63, down very slightly from 4.89 last month (lower is better).

City of Deerfield Beach
SINGLE FAMILY and CONDO/TH/VILLAS

Data Item	Apr '05	Apr '06	% Change
New Listings	200	394	+97%
Closed Sales	140	106	-24%

• 97 Listings went under contract in April
• 1330 Listings are currently active and available
• In Deerfield at this rate it would take more than 13 months to get contracts for current inventory.
• Supply/Demand Ratio (New Inventory to Contracts Accepted) is 4.1, down slightly from 4.6 last month (lower is better).
  

Summary:  The numbers have ever so slightly improved over last month, but the inventory level, saturation rate, and supply/demand ratio still display a significant buyer's market in our part of south Florida.  

It's looks as though the idea to make one's tax savings under the SOH Amendment (SOH) portable is dead-- for now.  The legislature will likely commission a study on the idea and perhaps take it up at some point in the future.  Here's the article:

http://www.planetrealtor.com ...

I agree that a study must be done.  The increased property tax burden on businesses and other non-Homestead properties must be considered.  If portability related tax increases drive small business and second homeowners out of the state, then it might not be a good idea after all.  Let's study it and see the numbers... then decide. 

There's more support for portability as a solution to the problem discussed  in an earlier blog about the unintended consequences of Florida's Save Our Home tax policy.

An aritlce in the local newspaper, the South Florida Sun-Sentinal, tells us that Gary Nikolits, the Palm Beach County Property Appraiser likes the idea: 

The real estate industry would be "brought to its knees" if homeowners aren't allowed to take a property tax break with them when they move, Palm Beach County Property Appraiser Gary Nikolits said Wednesday

Here is the article.

Previous blog entry about Broward's property appraiser's support of portability.

     I woke up this morning and it was only 52 degrees Fahrenheit. Now I'm originally from Connecticut and suffered through decades of New England winters, so I have nothing to complain about. I know that. But I'm cold! I finally turned the heat on to take the chill out of the air.

     For my readers who don't live locally, we don't get many days where my wife an I think it's cold enough to turn on the heat. A few days a year, usually in January and February. The longest consecutive "cold spell" that I can recall lasted about a week.

     What I find amusing is the local weather reporting. First, when it's cold and windy, we sometimes get "warnings" that the wind chill might go below forty, which sounds really funny to me. And then whenever any part of the country is really cold or gets a bad snow storm, we hear about it on the local stations. I'm not sure, but I think they do it to remind us why we're here. Either that or to let the tourists and visitors know what their families are enduring while they are getting a tan on the beach.

     To keep this real estate related, as this is a Real Estate Blog: I guess I can tell you that, because we don't use the heat much in South Florida, most homes have electric heat. It works well enough for the few times a year we need it.

     So are you ready to move to South Florida yet?

UPDATE:  2/14/06 - Happy Valentines Day.  It broke into the high 30's last night.  Brrrr!

Ironically, the day after I wrote "Held Hostage by Property Taxes?" I received a newsletter from the Broward County Property Appraiser's office.  They had an article entitled "Are you Locked into Your House Because of the 'Save our Homes' Tax Cap?"

In the article, Property Appraiser Lori Parrish supports the idea of making the SOH shelter "portable."  Depending on the implementation, it would go something like this.  If you bought another home with an assessed market value equal to your current home, the effect on your taxes would might go as such: 

Market value of current home: $300,000

SOH "capped" value:           $125,000

Portable differential:        $175,000

New house market value:       $300,000

New SOH "capped" value:  $300,000-$175,000 = $125,000

So rather than having your new taxes calculated on its current value of $300,000, more than double your current taxed value - which is what happens now - your taxes would remain fairly steady.  If you bought a larger home with a higher assessed market value, your taxes would go up, but based only on the difference in market value, like this:

Market value of current home: $300,000

SOH "capped" value:           $125,000

Portable differential         $175,000

New house market value        $425,000

New SOH "capped" value:  425,000-175,000 = $250,000

Rather than having your taxes calculated on $425,000 - almost 3½ times your current taxed value - which is what happens now - your taxes will only be based on the capped value of $250,000. 

It sounds like a great idea, right?  I like it.  I'll let experts crunch the numbers to see if it's feasible, but on the surface, it sounds pretty fair to me.  It leaves intact the current system that protects the Homestead property of Florida homeowners and it will make moving to a new home a possibility for many people who are currently locked into their current homes by taxes.  Is there anything wrong with this plan?  Well, I can't fully endorse it until I see how the numbers work out.  If portability is established, then the counties will not gain as much revenue when properties change hands to qualified "Homesteaded" buyers.  This means the burden of making up for the loss will fall on property owners who do not qualify for Homestead and the SOH cap.  These properties are the second homes of Florida residents and part-time out-of-state residents, and they are commercial properties.  What will the effect be on these properties?  What kind of additional tax burden will we be placing on local small business owners?  How will it affect the retired couple on a fixed income who own a humble condo in Florida where they live for the winter?  Their taxes are already uncapped and so have gone up as dramatically as the price of real estate has.  When I see these figures, I can make a judgment on whether to get behind such a portability program.  For me personally, I would love it.  But is it right for the community or the state in whole?  Of that, I'm not yet sure.  But I certainly hope so.

Comments welcome.

Homeowners in Florida are being held hostage in their homes by a tax policy that was meant to be a good thing.  In 1993 Florida voters approved a constitutional amendment that became effective January 1, 1995, called the "Save Our Homes Amendment."   This amendment placed an annual cap of 3% on the increase in assessed value of a Florida Homestead property.  One must file with the county to make a property a Homestead, one must be a resident of Florida, and only one's primary residence qualifies.  You can read more about the SOH Amendment here:

http://www.leepa.org/amendment_10.htm

But the law of unintended consequences has struck hard.  When the voters approved this measure, they were probably thinking they liked the idea that folks wouldn't be forced out of their homes by unpredictable or dramatic increases in property taxes.  They had a point too-- especially if you consider the rapid rate of appreciation in the value of real estate in most parts of Florida.   For its limited goal, the idea worked... quite well, in fact.  But the problem is it has worked so well that people can no longer afford to move because they can't afford the taxes on a replacement home, whether they are upsizing or downsizing.  What happens is the county keeps track of the uncapped "real" assessed value of a property while taxing it at a "capped" level.  Then when the property changes hands, the cap is removed and the new owners get taxed on the "rea" value.  If the new owners file for Homestead, they qualify for the cap but it starts anew at the higher value. 

Let me give you a real world example.  To keep the number easy, let's assume the tax rate is $10.00 for every 1,000 in assessed value, and the assessed value is equal to the sales price.  Incorrect assumptions in the real world, but it will make the example easier to follow:

The Smiths purchase a home in 1995 for $100,000 and file for Homestead Exemption.    Real estate values remain steady for five or six years and then suddenly skyrocket out of control (sound familiar?).  Because of the SOH Amendment property tax cap, they are only paying taxes on $125,000 while the true value of their home is now $500,000. 

The Smiths want to sell their house and buy an equal home in a different neighborhood so they investigate their options on a $500,000 property.  But look what happens: Their annual taxes go up from $1,250 to $5,000!   Sure, they can afford the new mortgage because of the equity in their current house, but they can't afford the more than 300.00 per month increase in property taxes! 

Situations like this are happening all over Broward County, and I'm sure in the other rapidly appreciating real estate markets in Florida.  It is one of the causes of a slowing real estate market because its effect is a decrease in the number of buyers who can afford to be in the market. 

Perhaps this article will also help you understand the answer to these questions:

Why do I pay so much more in property tax than my neighbor does?

When I buy a house, why will my taxes be so much more than the current owner's taxes?

Is there a solution to this problem?  I don't know, but I'll explore one option in a later article.