RISMEDIA, June 20, 2007-(MCT)-The Florida Legislature pushed Adam Lubkin off the fence Thursday.
He didn’t get hurt, but it’s going to cost him hundreds of thousands of dollars.
Lubkin, a potential first-time home buyer, has been waiting to see what the state was going to do about property tax reform before starting to house-hunt seriously.
“I was sitting on the sidelines and waiting to see what was going on with property tax reform,” Lubkin said. “I didn’t want to be on the short end of the stick.”
Indeed, legislators hope a proposed constitutional amendment is just the stick needed to jump-start a slow real estate market by giving the most benefit to new middle-class homeowners.
That’s exactly how the 38-year-old Lubkin describes himself. He works for Elite Development Group in Miami, where he rents an apartment, but he wants to live closer to his aging parents in Boca Raton. He’s been pre-approved for a loan and plans to look for a house in the $600,000 range.
“You might say that’s a lot of money,” Lubkin said, “but in the areas I’m looking, you couldn’t get a townhouse for that a couple years ago.”
He’s right, of course: The local real estate market could use some remedies for runaway home prices that have kept would-be buyers from home ownership.
In April, single-family home sales in Palm Beach County fell 17% and in the Treasure Coast they plunged 41%, according to the Florida Association of Realtors. Median prices fell by single digits, not enough to get most buyers’ attention.
“Because Florida has been perceived as a place where home prices are too high, the Baby Boomers have been waiting to see,” said Nigel Fullick, vice president of HomeBanc for Palm Beach, Martin, St. Lucie and Hendry counties. “There’s pent-up demand and desire.”
Families that were forced during the real estate boom to buy homes that were smaller than they wanted because nothing else was available, or who bought homes in school districts that weren’t their first choice, can begin to think about buying that bigger home or that home in the neighborhood of choice, Fullick said.
“There are thousands of families waiting,” he said. “The timing couldn’t be better.”
Not so fast, says a local housing analyst.
“There isn’t likely to be much immediate impact,” said Mike Larson of Weiss Research in Jupiter. “That’s because the tax cut for the 2007-08 tax year is only averaging 7 percent, or about $170,” he said.
“And without Save Our Homes portability,” he added, “anyone who has owned a house a long time, and who plans to buy a new house and move in the next several months, isn’t looking at any big savings.”
Although Gov. Charlie Crist campaigned to make the Save Our Homes tax exemption portable, the legislature did not approve it.
Save Our Homes limits assessment increases for homesteaded property to 3 % or to the increase in the Consumer Price Index, whichever is less. It became effective in 1995, meaning that longtime homeowners have had the benefit of years of capped assessments and significantly lower property taxes.
Save Our Homes became increasingly divisive in recent years as the astounding run-up in home prices in red-hot markets such as Palm Beach County and the Treasure Coast meant that residents on the same street could pay vastly different property taxes while using the same services.
And since the tax exemptions apply only to primary residences, this ruffled the feathers of thousands of snowbirds who make Florida their winter home.
Besides setting off heated arguments , Save Our Homes also meant fewer home sales. Not surprisingly, the Florida Association of Realtors supported property tax reform.
“FAR is very excited about the work the Florida Legislature was able to complete in three short days!” said Elaine Russell on Realtors Association of the Palm Beaches e-stationery. “We had an amazing response to our call-to-action.”
Nevertheless, cooler heads cautioned that 60% of Florida voters must approve parts of the changes in property tax laws.
“And right now, cities and counties are putting the fear of God into everyone,” said Bill Cozart, CEO of the local Realtors association.
Copyright © 2007, The Palm Beach Post, Fla.
Distributed by McClatchy-Tribune Information Services.