In my previous columns I have discussed the proverbial real estate bust or lack thereof and the three reasons to expect a slowdown: Interest rates, homeowner's insurance and real estate taxes.
The bureaucrats in Washington proved me wrong by raising the rates yet again. I still believe it's a bad idea. Second, I said insurance or lack or availability of it would cause a slow down in sales. I was correct on that one as the legislature put a band-aid on trauma injury. The third was real estate taxes. The rapid increase in this category is finally starting to rear its ugly head. As Broker/Manager of Sand Key Realty, I can tell you that over the last two weeks, our company has lost three sales, two tax related and one for insurance. It is my opinion that this is just the tip of the iceberg.
One home was moderately priced at $600,000 with a current tax bill of approximately $6500. After reviewing the possible sale with the Tax Collector's Office, we had to inform the potential buyer of his new real estate taxes - just over $13,000. Obscene? You bet! As dictated by law, we told the potential buyers of the new taxes and they quickly deiced to put off the purchase, even though they loved the home location and the price.
As for the insurance related home, the price was a modest $169,000, a starter home if you will. Homeowner's insurance was quoted at $4900 per year. You do the math. That's an additional $400 PER MONTH in the mortgage payment for a middle income family. It just doesn't work! It is going to get worse before it gets better and it will affect everyone. You may have the best home, best price and best location, but it will not sell because of taxes and/or insurance.
Citizens, homeowners, realtors and business people need to get off the cushions and start to bombard our local and statewide elected officials to come up with a viable solution and fast. Here is a little secret to the future of local and statewide budgets - DEFICIT. State documentary stamp revenue will crash this year and next while the insane spending continues. Remember I told you so!
Ric Cornelius is the Broker/Manager of Sand Key Realty Sales and Rentals, Inc. Sand Key Realty has three offices with 40 agents. One office is at 740 S. Gulfview Blvd., Clearwater Beach, 727-443-0032; the second office is at 2701 Gulf Blvd., Indian Rocks Beach, 727-595-5441; and the third office is at 309 Belleview Blvd., Belleair, 727-461-4200.