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September 2, 2010 |
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| July 01, 2010 |
By: Eric Kalis |
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axable property values continue to fall across South Florida, putting increasing pressure in municipalities already struggling to balance budgets.
In Miami-Dade, appraised values fell $29 billion, or 13.4 percent, according to county Property Appraiser Pedro Garcia.
Homestead, one of the municipalities hit hardest by the residential meltdown, suffered the largest decline in property values at 31.2 percent.
dbr TV: Property appraiser Pedro Garcia says belts will need to be tightened after values decline
Broward County property values fared a little better but still took a hit, according to Property Appraiser Lori Parrish. Total taxable values in Broward dropped 11.7 percent to $129.9 billion.
“This is the second year of double digit decreases and hopefully the last,” Parrish said. “Property values dropping are another sign of our economy.”
North Lauderdale saw the steepest decline, with values falling 24 percent. Lauderdale Lakes and Lauderhill also declined more than 20 percent in value. Tamarac and Margate declined about 18.8 percent.
Palm Beach County values dropped about 10.9 percent to $125.8 billion. Lake Worth values fell the most, falling 23.4 percent, followed by Greenacres and Boynton Beach, where properties dropped more than 17 percent in value.
‘SAD TIME’
Miami-Dade’s decline tops the 9.2 percent retreat in 2009 and could lead to further budget cuts and loss of jobs in local government, according to Garcia.
While the property appraiser does not write the county’s budget or set the millage, or property tax rate, spending cuts are inevitable, Garcia said. Potential tax savings for residents whose property values were assessed below market value could be offset if commissioners raise the millage rate.
“It’s a sad time,” Garcia said. “I don’t envy the [County] Commission for the budget decisions coming up. In my 36 years as an appraiser I have not seen a drop like we have had the last three years.”
The Miami-Dade County Commission is to meet July 20 to discuss the budget.
Miami-Dade residents will receive a notice of their assessed values and taxes in late August.
Residents will have 25 days after notices are mailed to file an appeal.
Miami-Dade’s taxable property values in 2010 fell from $222.1 billion to $192.5 billion, according to final numbers released by Garcia on Thursday. The official report on the decline in values matches Garcia’s June 1 estimate. The values have been sent to the Florida Department of Revenue and will guide budget and property tax decisions by municipal governments.
Garcia, who became Miami-Dade’s first elected property appraiser in December 2008, cited mounting foreclosure sales, increased vacancies and declining rental revenue for commercial property owners, and a sharp drop in new construction as key reasons for this year’s lower values.
After Homestead 31.2 percent retreat, the next-steepest drops came from North Bay Village, which declined 26.4 percent; Florida City, which fell 23.5 percent; and Cutler Bay, down 22.7 percent.
“Homestead and Florida City had a lot of new developments and foreclosures that resulted in drops in value,” Garcia said.
“Properties that were previously assessed in those cities at $200,000 are being assessed at between $60,000 and $80,000.”
Taxable value from new construction throughout Miami-Dade declined from about $8.6 billion to $2.6 billion.
Residential properties accounted for about $21 billion of the $29.5 billion countywide decline, Garcia said.
Garcia said he believes Miami-Dade’s residential market has reached a bottom and should begin to stabilize.
“After the government tax credit [for first-time homebuyers] expired, there was a slow down in sales,” Garcia said. “But more sales are coming in. The condos hit the bottom and are leveling out.”
COMMERCIAL WOES
The commercial real estate market, saddled by rising defaults and vacancies and revenue declines, fell by about $8 billion and faces more pain, Garcia said.
“With the commercial market, there are problems in every sector,” Garcia said.
“The economy has led to such a loss of jobs. Mom-and-pop businesses and shopping center owners have a lot of vacant space. People can’t afford to pay rent for apartments; I have never seen so many apartments for rent.”
Despite the decline in commercial values, Coral Gables real estate consultant David Dabby is more upbeat.
“The commercial real estate market in South Florida has no shortage of short-term issues, from mounting defaults and lack of financing to property value declines, but the long-term prognosis is more optimistic,” Dabby said.
“The commercial market might have one more year of issues before it hits the bottom,” he said.
Commercial property owners could get major tax relief in November if Florida voters approve Amendment 3, which would reduce the maximum annual increase in assessments for non-homesteaded property from 10 percent to 5 percent, Garcia said.
The potential savings for commercial property owners from the amendment likely would result in an equivalent loss in tax revenue for municipalities.
A lower cap on non-homesteaded property assessments could be a boon for the residential sector, Garcia said, since it could lead to scores of second-home buyers in the county.
“A change in the cap will help a lot,” he said. “People will start buying second homes again. I think people will vote for that.”
Eric Kalis can be reached at (305) 347-6651. Staff writer Polyana da Costa contributed to this report.
Pedro Garcia photo by John P. Hernandez
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