Property value erosion slows significantly

After two years of declines of more than 20 percent each year, county taxable property values dipped only slightly for 2011.

Property Appraiser Kesley Colbert certified the county property rolls last week with the county seeing a decline of just less than 7 percent compared to the same time last year.

“I don’t know if we are at the bottom yet, but I think we can see it,” Colbert said.

For the Board of County Commissioners the baseline for personal taxable property dipped from $1.57 billion to $1.46 billion, a 6.8 percent decline in revenue to the county budget under current millage rates.

The Gulf County School Board, which by law does not allow certain homestead exemptions allowed by the cities and county, saw its taxable property value decline by just 7.03 percent.

“The school board collects more than the county because the county allows more exemptions,” Colbert said, noting the additional $25,000 homestead exemption allowed to seniors by the county as one example.

Preliminary reports to both the county and school board earlier this year estimated that the decline in taxable property value would again be in double digits, around 10-12 percent, a number Colbert acknowledged he was looking at after three straight years of decline.

Property values fell 20 percent in 2010, 24 percent the year before and by 8-9 percent the prior year. Before 2008, the county had never seen a decline in property values in its history.

 “The decline this year is not near what it has been the past two years which is very good,” said Sissy Worley, financial officer for Gulf District Schools.

The cities saw declines that sandwiched those realized by the county and school board.

In the city of Port St. Joe, property values dipped 10.7 percent, from $328 million to $292 million; the city of Wewahitchka saw a decline in taxable property value of just 2.9 percent, from $67 million to $65 million.

“I think (the smaller decline compared to the past two years) is a good sign. I think it bodes well for us,” Colbert said. “I have had more activity, more inquiries and interest in property in Gulf County than I’ve had in years.”

The certified property roll is, in effect, a snapshot of the past.

By law each county’s property appraiser must assess taxable value as of Jan. 1 of each year. As Colbert noted, the market typically changes by the time of certification on July 1.

The rolls are also dictated by property sales from the prior year, not just an individual property, but like sales on a street or in a neighborhood, Colbert said.

“It is sales driven,” Colbert said. “The people who audit me at the Department of Revenue are basing my audit primarily on sales. And I can’t look at sales after January 1.”

Further, Colbert must come within 3-5 percent of what the Department of Revenue believes is the taxable value of property in the county or face an audit or serious discussions about how certain values were reached.

The DOR performs an audit of the property appraiser’s work each year, with a more in-depth audit every other year.

And bank sales, foreclosure sales so prevalent the past few years have little to no impact on the final certified roll.

“I can’t use those as qualified sales,” Colbert said, noting that state guidelines characterize a qualified sale as one done at arm’s length, under no duress and the property must be on the market for a specified length of time.

Colbert said that there were likely fewer sales than in 2010, but the sales prices were not dropping at the rate they had the past two years.

“We’ve about got to the baseline, or bottom line,” Colbert said, noting the value of the land in the county dictates that prices can’t sink much lower. “This is probably the best time to buy property if you don’t have to borrow much.”

Colbert said his work his one of common sense as much as number-crunching.

“We try to make the most intelligent decisions we can make on each property,” Colbert said, noting the county has 17,000 parcels which must be assessed and assigned a value. “I have to look the people of Gulf County in the eye and tell them I am doing everything I can to reach market value.

“I know I am six months behind but I am working hard to ensure that I do what I can to reach market value. We just don’t pull a number out of the hat. We are not trying to reach a certain number. We are trying to assign just value and make the best decisions we can.”

The volatility in the market the past few years, as logic would dictate, comes from waterfront or interior beach property.

“We saw the gains near the water, where prices were going up and up not long ago, but we now we are seeing those 20 percent drops near the water,” Colbert said.

Global economic conditions also play a significant role in property value trends in the county. As consumer confidence declined around the country and internationally, as banks slowed lending and land prices dropped across the nation, those factors play a role in Gulf County.

“A lot of what we do is beyond our control,” Colbert said. “All of the things that are happening financially around the globe accentuated what happened here. The more global it is, the more impact we feel here.

“I don’t know where that trust turns around.”

However, Colbert added, Gulf County is nicely poised for a turnaround.

“The history of land in Florida has always run in cycles,” Colbert said, noting that early in the 20^th Century men such as Henry Flagler and John D. Rockefeller got rich buying up Florida land only to see the bottom drop out decades later. “We just happen to be in a down cycle. It always bounces back.

“We have a community that is immeasurable and people will come to find it. They are going to come. We don’t have to build it and they will come, it is already here. The beach, the water, the sunsets, they are already here. The land has value. You know there is value there. There is value in our property, it just isn’t selling.”