The End of Falling Property Values in Lee County

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The Brown Team

RICK BROWN: (239) 322-2313 BRENDA BOOTH: (239) 287-8834 www.TheBrownRealtyGroup.com

Lee County’s real estate values leveled off from a five-year free fall, with the property appraiser Friday estimating that areas hit hardest by the housing market crash are rebounding. Taxable property values in Cape Coral and Lehigh Acres increased last year by 3.53 percent and .72 percent respectively, according to the property appraiser’s initial estimate. Fort Myers, which also has seen drops in recent years, saw an increase of .25 percent. Meanwhile, real estate values in the beach communities of Sanibel, Bonita Springs and Fort Myers Beach lost value, according to the estimate. While current numbers indicate a .9 percent drop in countywide values, Property Appraiser Ken Wilkinson said he expects the figures will work out to an increase by the time he submits his report to the state on July 1. Lehigh Acres-based real estate broker Fred Elliot said he’s not surprised by the uptick in values, as foreclosures rates in Lehigh have fallen and people are back to buying homes. “We’re also listing fewer properties than we’re selling, which means the inventory is starting to go down,” Elliot said. As for the beach communities that witnessed decreases, Bonita City Manager Carl Schwing said he suspects they’re experiencing some aftershocks, having escaped the earlier stages of the housing crash relatively unscathed. Assistant County Manager Pete Winton said now that values have leveled off, he anticipates they will start to climb. Accordingly, he said, the county will start to run projections that anticipate higher revenues and growth Taxable property values in the county have plummeted by about 45 percent since fiscal year 2007-08, according to county budget documents. The county has been relying on reserves to fill the shortfall caused by the real estate crash. Over the past several years, the county has spent down its savings by about $30 million a year. Over roughly the same period, about $94 million was slashed from the county’s budget. The estimated values didn’t change County Commissioner Frank Mann’s mind. He said the county needs to stop spending its savings and start cutting costs. The county dipped into its reserves again this year to cover a shortfall of about $30 million.

Cape Coral

Vicki Bateman, Cape Coral’s finance director, said the uptick in values equates to an increase of $2.3 million in revenues over last year’s budget. Bateman said it means the city won’t have to talk about potential cuts to core services in its upcoming budget discussions and might even be able to throw funds into capital projects such as road improvements. Councilman Marty McClain said the figures are reason to breathe a sigh of relief. McClain said it’s good to hear the city is leading the area in the upswing, considering it was near the top of the pack nationally when values were sliding. “It’s nice to be on the positive side of this recovery,” he said. Values fell 16.3 percent in 2009 and 5 percent in 2010. While the residential market crashed, the commercial market continued to place its faith in the city. “They believed this was an area that was going to bounce back,” she said. And now, homeowners are seeing the windfall as well, with many homes that would be lucky to draw one offer a year ago now raking in 5 to 10.

Bonita Springs and the islands

Schwing said Bonita won’t be fazed by the 2.32 percent drop, which amounts to about $120,000 in property taxes. “Because of the prudent way that the City Council and the staff has managed the budget in the past, we’ll be able to absorb that into a balanced budget presentation in several weeks when we bring it to council,” Schwing said. He does not anticipate service cuts, layoffs or pay decreases. The city’s current budget is $9.5 million. This year, most homeowners paid less in city taxes than the year before. The council approved a tax rate at 83 cents per $1,000 of taxable value, which has been the rate since 2008-09. That meant a person with a home valued at $200,000 with a $50,000 homestead exemption paid about $125 in city property taxes. Those without the exemption paid about $166. Fort Myers Beach took one of the largest estimated losses at 3.36 percent. While town officials said the drop caught them by surprise, the consequences shouldn’t be too dire.

Lehigh Acres

Lehigh became the poster child for foreclosure communities, and the plummeting property values backed that up. Property values fell 71 percent between 2006-07 and 2011. The Lehigh Fire District faces a $2 million to $2.5 million budget shortfall for the 2012-13 fiscal year. Officials from the district didn’t return phone calls Friday but in March had a meeting to address low morale at a time when employees were being asked to take a 25 percent cut in pay and other compensation.

San Carlos, Bonita and Estero fire districts

Alexis Rothring, spokeswoman for the San Carlos Park Fire District, said the decrease in property value of less than a half percent will mean that the district will take in about $27,000 less than this year. “That being said, the actual drop in property values are historically less severe than estimated, so we can be hopeful in that light,” she said. Bonita Springs Fire Chief Phil Kinsey said the 2.43 percent drop in the district is about what was anticipated. “My best case scenario was that we would break even, so this was about what we were expecting,” he said. Kinsey said the numbers won’t impact services or personnel at the district. Property values declined 3.25 percent in 2010, which forced the district to raise taxes by 11 percent last year from $1.99 to $2.23 for every $1,000 of property value. The district also cut costs by accepting early retirement from nearly a dozen employees. The budget includes $15.7 million in personnel costs for salaries and benefits, $2.38 million for operations and $1.3 million in capital expenses for equipment replacement. Commission chair of the Estero Fire District, Dick Schweers, said he hoped property values would increase or stay the same, after the district raised rates last year to compensate for a drop. But it looks like the district will lose another .92 percent of its tax base, according to the estimate. Schweers said he doesn’t know yet how the loss could impact services or tax rates. “Hopefully, next year we’ll start to see (values) headed in the right direction again,” he said. Read more at: http://www.news-press.com/article/20120602/RE/306010023/1002/RSS01

The Brown Team

RICK BROWN: (239) 322-2313 BRENDA BOOTH: (239) 287-8834 www.TheBrownRealtyGroup.com
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