Beach Homeowners Encountering a Buyer?s Market

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Escalated insurance costs, property taxes, causing Florida homeowners to sell
The only force that might remove for-sale signs in the South Lagoon Drive area of Panama City, Florida, is a hurricane.

Homeowners trying to sell?either because of increased property taxes or other reasons?say they are not finding buyers quickly. Some of their homes have been sitting on the market for a year or more.

Ronald Roberts said he sold an apartment and a home he owned on Pinetree Avenue two years ago within a couple of days. Now, he is about to enter the ?buyer?s market? that local real estate agents say currently exists, meaning buyers are waiting because property values have soared and economic conditions, such as high gas prices, are deterring house hunting.

Roberts recently plunged a selfmade sign in his yard on Long John Drive that lambastes the county and his hurricane insurance provider for escalated costs that he said are forcing him to sell. His home will be on the market in December.

?How much more does the federal government and the county expect people to tolerate?? he says.

County Property Appraiser Rick Barnett has said assessed property values are dramatically higher than last year because people had been selling profitably to rich investors, which sets the market at that level. Also, many county properties had not been assessed in a decade or more, he explains.

Roberts bought the home on Long John Drive last year, when it was appraised for $89,032. His primary home was in Acworth, Georgia, but he intended to make Panama City Beach his year-round residence. Because his homestead exemption is on the Georgia home, Roberts saw his appraised value jump to $185,593 this year, bringing his estimated property taxes to $3,458.

Under Florida law, the taxable value of homes that are homesteaded can only increase 3% per year.

A retired truck driver, Roberts, 63, says he will be heading back to Georgia when the place sells on Long John Drive?and he will not purchase real estate again in Bay County.

But anyone who wants to move is a ?slave to the market,? as Roberts? neighbor Gerald Schwartz puts it. Schwartz?s home has been for sale since May.

Schwartz and his wife want to move to Baltimore where they have family. Schwartz?s Realtor, Harry Tice with RE/MAX, says Schwartz likely will have to take less for his home, something other homeowners are having to do in the South Lagoon Drive area.

Schwartz says he paid $61,000 for his home 20 years ago. Based on home sales in the area around Schwartz, Tice originally said his client should ask for $300,000. But now, Tice thinks the selling price will be about $280,000.

RE/MAX Realtor Mary Jane Shields says the most she has seen sellers drop their asking price is 10% to 15%.

She is trying to sell a 984-squarefoot home on Hilltop Avenue, which is listed at $250,000. It was assessed at $101,555 this year, up from $55,120 in 2004. Proving that values had not changed much prior to this year, the Hilltop Avenue home was assessed at $47,900 in 1998.

Shields says it has only been about six weeks since the Hilltop Avenue home was put up for sale. She adds that she has seen some homes and condominiums?mainly those selling for $500,000 and higher?listed for 500 days.

?The market is stagnant, whether it?s a condo or house, but the market is moving if it?s under $300,000,? she explains.

A 2,621-square-foot waterfront home on South Lagoon Drive is listed for $1.1 million. The property was assessed at $227,867 this year. If it were to sell for $1.1 million, Barnett says the market value would be set to within 90% of that price.

The selling price does not always dictate the new market value of a home or condo. Barnett says his office considers the neighborhood and whether the selling price is consistent with other sales.

Recently, a real estate agent from Coldwell Banker, Marta Prupas, was checking on homes she is trying to sell for clients. She agrees with Roberts that there are fewer people currently interested in buying homes here, but she attributes that to the economy.

?This is just a transition; it will pick up again,? she says.

Regardless of future economic cycles, Roberts believes the lots in his neighborhood will never sell for anything close to their original asking prices. He says the county is ?crushing? its own property tax market. Families cannot move in because of upward property values and taxes, so homeowners here cannot sell.

Toward the end of the year, the housing market typically softens, according to Tice, whose customer base is about 80% second homeowners. He claims he is not yet worried about persistent inability to sell.

?The tax situation is becoming sort of ridiculous,? he says. ?I?ve heard of investors leaving here and going to devastated areas (where Hurricane Katrina struck) because they think they?re going to get good deals. That?s not necessarily the case.

?We?re not in emergency mode. If it?s not getting better by April, we?ll sound the alarm.?

Copyright ? 2005, The News Herald, Panama City, Fla.

Distributed by Knight Ridder/Tribune Business News.