by Lilly Rockwell
The News Service of Florida
In a sign that Florida’s housing market may be on the road to recovery, the state’s top economist expects an increase in school property tax rolls next year of 1.3 percent.
Though that is actually a slight decrease from the original forecast of 2 percent, it is one of the most promising signs yet that Florida’s ailing and hard-hit housing markets is on the mend after four years of plunging values.
Florida’s housing market was one of the hardest hit in the nation, the victim of an overwrought housing bubble, loose mortgage standards and a tourism-based economy.
The state’s housing woes have become fodder for national newspaper and magazine articles spotlighting the housing glut, examining over-developed South Florida subdivisions with plummeting home values.
Realtors, economists and property appraisers now say they see signs of a housing market recovery.
“We turned the corner,” said state economist Amy Baker, though she cautioned the economic recovery is still fragile. Her forecast was part of a discussion Wednesday of adjusting estimated property tax revenue this year.
“The correction from the housing boom was severe and very dramatic on the (tax) rolls,” Baker said. “Now most of that correction is behind us, but we are still not back to the growth we typically see.”
She said that property tax rolls are going to stabilize after four years of decreases, with drops of more than 10 percent in tax rolls in 2009 and 2010.
The forecast of school property tax rolls is a big indicator of the health of the housing market. When home values fall, school districts typically collect less money. When home values rise, then property tax rolls swell.
Is Baker’s forecast too optimistic? After all, Florida’s median home values are still sinking.
The latest real estate data shows that the median home price in Florida slipped 2 percent in June to $138,000, and that home sales fell by 4 percent in June from the same period last year.
Sean Snaith, an economics professor at the University of Central Florida, called Baker’s forecast “reasonable.”
The state’s tenuous economic recovery is heavily dependent on hiring, Snaith said.
“The states of the housing market and labor market are intertwined going forward,” Snaith said. “As we see better job creation numbers and a falling unemployment rate, that will help the housing market.”
While Florida’s unemployment rate has inched lower, it still stood at 10.6 percent in June.
Snaith said an increase in what a school collects in property taxes could come from home value appreciation, or a combination of that and an increase in the number of people or homes in Florida next year.
Property appraisers said they are already seeing signs of an improved housing market.