Homestead, Portability, PCPAO

Florida Homestead, Portability & PCPAO

For those of you not fortunate enough to be Florida residents, 😊 we have homesteading which gives full-time residents a discount on property taxes for their primary residence. Florida residents are granted a $50,000 exemption from the property’s ASSESSED value. Some residents are given additional exemptions for statuses such as widow, senior, disabled and veteran. Homeowners must apply for homestead status which can be done online on the Pinellas County Property Appraiser’s Office (PCPAO) website. New homeowners must file for homestead by March 31. Filing can be done online.

Save Our Homes is a 1995 Florida Constitution amendment that limits annual increases on the assessed value of property with a homestead exemption to 3% or the change in the Consumer Price Index, whichever is lower. The CPI is usually lower.

Portability
Part of the Save Our Homes amendment allows homestead property owners to port (or transfer) the accumulated difference between assessed value and the just/market value. This allows the homestead value to be transferred to a new home. If a homeowner sells their homesteaded property, they have 2 tax years from January 1st of the last qualified homestead exemption (not from the sale date) to purchase a new home and port their exemption.

Tax Estimator
Sometimes new home buyers get a big shock after purchasing a home when they find out that the property tax on their new home is going way up. This can happen when the seller owned the home for a long time and was homesteaded. After the home is sold, the prior cap on the assessed value is lifted and the taxes are calculated for the new owner. This shouldn’t be a surprise. The PCPAO’s website has a page for entering a property and calculating what the new taxes may be.

For more information on Homestead, please refer to this document: https://www.pcpao.org/Homestead%20%26%20Other%20Personal%20Exemptions.pdf

My RE/MAX Metro office recently had the Pinellas Cty Property Appraiser, Mike Twitty speak at our monthly office meeting (which is currently a Zoom call). One of this things Mr. Twitty talked about is a new website that is about to be launched. If you are a homeowner and you haven’t looked up your property on the PCPAO website, I recommend that you do. On the site you can see permit history, sales history, tax information, a property layout, square footage and more. Mr. Twitty also shared the graph below which shows the trends in assessed value.

Pinellas County Tax Value Trends

Pinellas County Tax Value Trends

Posted on October 14, 2020 at 5:17 pm
Michelle L. Anderson | Category: Home Buying, Home Ownership, Real Estate Market, Selling Your Home, St. Petersburg

The Dirt on Solar Panels

House with solar panels

House with solar panels in the Central Oak Park neighborhood of St. Petersburg, FL

 

I just sold a house with solar panels. There are some misconceptions about them, and some inaccuracies generated by solar salespeople. I did extensive research prior to listing this house. The main points to know are:

1). When a home w/ solar panels is sold, they don’t add much value to the house.

Some appraisers say there are so few comparable sales with solar it makes it hard for them to determine value. Keep in mind that most home improvements don’t realize a full return on investment (ROI). For example, the average kitchen remodel provides a homeowner with a 69% ROI. One local Tampa Realtor said, “I’ve had appraisals twice on homes with solar panels, once the appraiser only gave $5,000 and the other time they gave us nothing.”

2) When a home w/ solar panels is sold, the seller has to pay them off in full at or before closing. Statements from salespeople such as, “You can transfer the payments to the new buyer,” or “You can move the panels to your new home” are just bogus.

Transferring payments – Think about it, how many people buying a home want to take on a new mortgage AND solar panel payments? And to complicate matters more, if they qualify to purchase a home at a certain price, that number changes if they are adding the additional payment. One local Realtor said, “Buyer taking over payments will affect their DTI (debt to income ratio). Its never wise to expect a buyer to take over someone else’s debt. If a homeowner updates a kitchen with a loan, they aren’t going to sell the house and ask the buyer to finish making the payments.”

Moving the panels to a new home – If you have already purchased a new home and you move the panels to that house BEFORE selling, that is feasible. What exactly the charge will be to move them is unknown. But think about it this way – if you were buying a home that had panels on it that were not conveying with the sale – at minimum you would want them removed BEFORE doing a home inspection. What if the removal of the panels damages the roof? What if the panels aren’t removed prior to the scheduled closing and closing is delayed? And if you are closing on your new home the same day as the sale of the solar panel one, then you essentially have to have all of those things happen IN THE SAME DAY. This scenario makes Michelle want a glass of wine just thinking about it. If you have to sell a home with solar panels in order to buy a new one, that is tricky to say the least.

3) Don’t put solar panels on an aging roof – When you put on the new roof, you have the extra cost of removing and reinstalling the panels.

4) Don’t count on saving money on low electric bills – My clients were paying $135 / month for the solar panels on their 950 SF home. They still had electric bills ranging from $60-$80. Those 2 bills combined were more than they paid BEFORE having solar.

The bottom line is that my sellers paid $26,000 for solar panels thinking they would increase their home value and save them money. However, a few years later with an expanding family they decided to sell. $20,000 had to be taken from their closing funds to pay off the solar panels to clear the lien on the title. They consider getting them a mistake. Here are some other quotes from Realtors on a local Realtor Facebook page:

“Huge load of garbage! A good way for a seller to throw away all the equity they have gained in our great market. I’ve had to sell a few homes with solar and all of them saw extremely minimal increases in value.”

“National average has homes with solar selling for 3.75% higher.”

“Sold a home in Temple Terrace with solar panels and the appraiser said he couldn’t use them in the value unless there was another comp in the area with them.”

“I have a listing with panels. 10+ buyers noted they would only buy it if seller paid off panels.”

“My seller said solar was the worst financial investment they ever made in their life.”

Posted on October 5, 2020 at 10:49 pm
Michelle L. Anderson | Category: Real Estate Market, Selling Your Home | Tagged , , , , ,

Financing Contingency vs. Appraisal Contingency

The question about what happens when an appraisal comes in lower than contract price comes up often. Sellers do not have to sell the property to the buyer at a lower appraisal price. This article from Florida Realtors, written by Joel Maxson is Associate General Counsel for Florida Realtors, sums up this issue quite well:

“If a contract includes both a financing contingency and appraisal contingency, where does one end and the other begin? There’s substantial overlap in the two contingencies, but they have very different rules.”

Posted on July 6, 2020 at 5:26 pm
Michelle L. Anderson | Category: Home Buying, Selling Your Home | Tagged ,

St. Pete Flood Zone & Neighborhood Maps

Evacuation Zones & Flood zones are very different things. Evacuation zones just provide for an order of evacuation in the zones that are determined to be mandatory. Some areas in St. Pete / Pinellas aren’t in a flood zone at all or done have an evacuation zone assignment. For example, my home in the Central Oak Park Neighborhood is not in an evacuation zone. For more information on evacuation zones and flood zones, visit: http://www.pinellascounty.org/emergency/knowyourzone.htm#differ

Flood zone codes are what determine flood insurance rates. Each flood zone designation, represented by a letter or letters, tells you what the risk is for flooding at your property. High-risk zones are called the Special Flood Hazard Areas (SFHAs) and begin with the letters “A” or “V.” Moderate- to low-risk zones, which are Non-Special Flood Hazard Areas (NSFHAs), begin with the letters “X”, “B” or “C.” There are also areas where the flood hazard is undetermined, labeled as Zone D. View the flood map.

St. Pete Evacuation Guidelines

St. Pete Evacuation Guidelines

 

 

 

 

 

 

 

 

 

St. Pete Neighborhoods Map

St. Pete Neighborhoods Map

Posted on May 15, 2020 at 10:24 pm
Michelle L. Anderson | Category: Home Buying, St. Petersburg | Tagged , , ,

The Real Estate Market During the Covid-19 Pandemic

What’s going on in real estate in covid-19 times? Real estate was deemed an essential activity in Florida, and real estate is still being bought and sold! Things have slowed down. Time will tell just how much because things that were in the pipeline prior to covid-19 progressed and most went to closing.

We did see significant numbers of sellers pull their homes off the market at the offset of the pandemic. However, there are still many people who have to move whether its for job transfers, divorce, moving to assisted living or decreasing real estate holdings. We entered this time with a very low housing inventory and there still continues to be more buyers than sellers. Thus far, we continue to see home prices rising.

The number of closings in March was similar to last year. However, in the past week closings for single-family homes are down 37% and for condominiums more than 50%. My sales personally are down 21% for the same period last year.

The real estate industry is adapting with new ways of doing business. This month I had my first closing using a remote (online) notary to execute the closing documents. Meetings are being held with Zoom videoconferencing and video home tours are increasing. Showings can still be conducted easily in vacant homes as well as owner occupied homes with precautions such as gloves and masks.

The data indicates that real estate will be the least affected and among the first market segments to rebound. Why? Unlike the last recession, this one is not caused by the real estate market. And since then, homeowners have been staying in their homes longer and have more equity in their homes. (See my prior Blogpost)

 

On a Zoom call with RE/MAX Metro to review real estate market data.

Americans are not pulling all of the equity out of their homes through refinancing like they did in the years prior to the 2008 real estate bust.

Want to Read more on the covid-19 real estate market –
Waiting for Price Cuts Due to the Pandemic? Keep Waiting
Fla. Home Showings Pick Up After Bottoming Out on April 7

Fla. Real Estate Market Keeps Moving – Just a Bit Slower

Posted on April 24, 2020 at 9:45 pm
Michelle L. Anderson | Category: Home Buying, Home Ownership, Real Estate Market, Selling Your Home | Tagged , , ,

Homeowners Are Staying in Their Homes Longer

by Michelle L. Anderson, MBA, January 29, 2020

The low housing inventory has been driving up home prices and creating a seller’s market. In December 2019, the inventory in Pinellas County dipped to a supply of 2.3 months – way short of a balanced market of 5.5 months. We are talking supply and demand here.

Supply of Housing Inventory

Source – Florida Realtors

 

One reason for the low inventory is that homeowners are staying in their homes longer than they did previously. Reasons may include longer lifespans and changing lifestyles of the baby boomer generation, homeowners wanting to capitalize on a rising market or changes in consumer’s mentality following the past housing bust of 2007-2008. From 2001 – 2008, Americans held their homes for an average of only 6 years. According to an article in the Wall Street Journal*, “More homeowners staying put has helped cause housing inventory to dwindle to its lowest level in decades, which has also helped push up prices on homes for sale. Adjusted for population, the inventory of homes for sale is now near the lowest level in 37 years of record-keeping.”

The good news is that we may be seeing a shift. In 2018, the nationwide average was 13 years, which shifted down to 10 years in 2019*. In Florida, the rate is lower – 8 years. Florida homeowners likely hold homes for a shorter period because they are bought as 2nd homes, bought later in life, or are purchased by those who come from other states and later decide to return to their state of origin.

Conventional thought has been that a homeowner should hold their home on average at least 5 years to break even. This number fluctuates with the market. Currently in St. Pete, the average break-even point is at 3 years. From this perspective, I think it bodes well for the financial health of Americans that they are staying in their homes longer. If in homeowner doesn’t hold their home up to the break-even point, they may have actually been better off renting. To calculate break-even points by area, down-payment and home price, this online calculator can be used.

Housing Inventory Turnover
Another way to analyze housing inventory trends is to calculate the inventory turnover rate. This rate can be useful when comparing neighborhoods within an area and what the expectation for new homes coming on the market may be. It is a way to determine if a neighborhood’s residents tend to stay put.

The neighborhood turnover rate is the percentage of homes in a neighborhood that sell each year. The rate is calculated by dividing the total number of homes in a neighborhood by the total number of homes that sold in that year. I calculated the turnover rates for a few St. Pete Neighborhoods:

Central Oak Park – 12% (of 1,727 homes on North Streets)
Historic Kenwood – 8.3% (of 814 homes)
Historic Old Northeast – 8.3% (of 534 homes)
Broadwater – 21% (of 378 homes)
Old Southeast – 16% – of 247 homes

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*National Association of Realtors, How Long Do Homeowners Stay in Their Homes, Jan. 8, 2020
*Wall Street Journal, “People Are Staying in Their Homes Longer—a Big Reason for Slower Sales,” Nov. 3, 2019

Posted on January 29, 2020 at 10:02 pm
Michelle L. Anderson | Category: Home Buying, Home Ownership, Real Estate Market, Selling Your Home | Tagged , ,

Remodeling for Profit?

Home Remodeling

Home RemodelingSARASOTA, Fla. – Dec. 12, 2017 – Home renovations as an investment for a future sale with hopes of recovering the improvement costs are a dicey prospect at best. Real estate agents and remodeling construction specialists caution against that assumption.

“Hardly anything will offer a net profit,” says Barry Grooms, Realtor, broker and co-owner of SaraBay Real Estate with his wife, Sherry. But some improvements “will help sell the property faster and will fetch a higher sales price.”

On the flip side, renovations for personal and lifestyle inclinations or remodeling an older residence after a purchase are commonplace and prudent. The popularity of HGTV’s portfolio of “reno” shows reflects public interest, but solid evidence comes from BuildFax. The data analytics firm has a new report showing residential remodeling outpacing new construction spending.

“Residential remodeling activity has increased by 30 percent since 2010,” BuildFax reported, though that began trending down in the Southeast during the last half of 2016.

Denny Yoder, president of Yoder Homes & Remodeling, is well acquainted with remodeling motivations. “The majority of our clients are improving their homes for personal lifestyle reasons,” he said. “About a third of our clients have just purchased the property or are converting it from a rental to a retirement home.

“While the concern for appropriate investment and not over improving is always important, we advise clients the more years they plan on keeping the property the less important this consideration is.”

While cosmetic and lifestyle enhancements are attractive and advantageous to homeowners, prospective buyers will take a different view should those renovations be unappealing.

The return on investment for an updated kitchen averages about 60 percent, a bathroom remodel around 68 percent and a master suite addition about 53 percent, Grooms said.

Michael Moulton, a broker-associate with Michael Saunders & Company, cites expensive new marble and/or wood floors as iffy. Those are “too much of a gamble that a new owner may want something other than what you install.” Plus, he said, “not all buyers would appreciate” expensive windows such as Pella and Anderson.

Basic infrastructure upgrades could prove valuable, though.

“The best improvements a home seller can make are replacing the roof, HVAC, electrical and plumbing,” Grooms said. “The reason for this is that most home buyers will have a professional inspection and most homes require homeowners insurance, and if the aforementioned items are not in good condition, it may increase carrying costs for the new buyer or an immediate out-of-pocket burden that is too much and break up a deal.”

Moulton emphasizes re-plumbing a house in neighborhoods where that is typically needed and replacing an aging roof.

That falls in line with the “Remodeling 2017 Cost vs. Value Report.” The website –costvsvalue.com – compares the average cost for 29 popular remodeling projects with the value those upgrades retain at resale in 99 U.S. markets, including the Sarasota-Bradenton-Venice region. Nationally, home maintenance projects, such as siding replacement, paid off best.

Curiously, every one of those projects undertaken in Southwest Florida, for example, paid back a higher return on investment than the national average. The highest differential came in at 27 percentage points – a garage door replacement – 104.1 percent here versus 69.3 percent nationwide.

“In general,” the report stated, “the hotter the market, the bigger the payback.”

This is the 30th anniversary of Remodeling Magazine’s first such survey, undertaken with the goal of providing an unbiased, third-party report on how much it costs for a professional to do a typical remodeling project as well as how much a real estate pro believes that project will increase a home’s value if it’s sold within a year of when the work was completed.

The methodology includes such factors as the cost of materials and labor in each market, subcontractor payments, taxes and additional considerations. The study compares the costs for the same hypothetical project in all 99 markets surveyed. Nationally, the 29 projects in this year’s survey paid an average of 64.3 cents on the dollar in resale value. The study broken down into 19 mid-range and 10 upscale projects.

Overall, the report found that newer and older trends continued. Improvements to the outside of a home produce higher returns on investment than interior projects. Curb appeal upgrades sell, be they to doors, windows or siding. Replacing those features proved better than a remodel, real estate pros said.

On the lifestyle front, Yoder cited bathroom remodels as “very common,” with hand-held and multiple shower heads being very popular. “Other popular requests in bathrooms are replacing bathtubs with walk-in showers and stand-alone tubs,” he said.

“Next in popularity are kitchen remodels followed by closet organization,” he added.

In several areas that Remodeling did not address, Grooms did. “Landscaping on average can return up to 150 percent of a return of investment,” he said. “Fencing may return up to 95 percent.”

The fence issue brings up an important matter. “The other area that I have observed that often helps a home sell faster and for more money is homes that are ‘pet friendly’,” Grooms said – which translates into wood, tile or laminate flooring, fenced yard or large yards. “More than 65 percent of homebuyers have pets, so making a home friendlier or decreasing the maintenance may help a buyer choose your home over one that is not!”

In the Sarasota market, Remodeling Magazine, published by Hanley Wood, reported only four projects with positive resale values. The installation of fiberglass attic insulation scored the best, with 124.4 percent rate of return. That is followed by replacing the entry door with a steel one (106.9 percent), installing a new garage door (104.1 percent), replacing the garage door with an upscale model (104 percent) and replacing the siding (100.9 percent).

Of the 2017 national averages, only attic insulation recouped more than the job cost, at 107.7 percent.

In upscale projects in SW Florida, a bathroom remodel (61.8 percent), a bathroom addition (64.1 percent), a master suite expansion (65.9 percent) and a major kitchen remodel (69.1 percent) scored the worst ROI (return on investment).

“Consumers often are surprised to see that some of the most common remodeling projects recoup the least costs,” the report said. The rate on investment for a mid-range bathroom addition scored the worst payback at only a 53.8 percent average across the country. “Not a single kitchen or bath project ranked higher than 17th out of the 29 projects,” Remodeling found.

The magazine’s research put quantitative figures on the value of curb appeal. Exterior projects had an average payback of 74.9 percent nationally, while interior projects returned 63.5 percent, the study said. Almost an identical percentage differential separated replacement and repair costs from remodeling improvement projects.

Plus, kitchen and bath upgrades require more costly skill and labor. “As a general rule,” the study said, “the simpler the job, the cheaper it is and the more likely it will have a high ROI.”

Here in hurricane country, a backup power generator holds a lot of appeal. The addition of that piece of equipment came in dead last among mid-range projects in Sarasota at 66.4 percent.

But the survey’s information was gathered before Irma knocked out electricity to thousands of households in September, and residents scrambled to purchase those units.

“Timing also figures here,” the study stated. Generator popularity surged after Superstorm Sandy struck, soaring some 20 percentage points. ROI has been slipping since then, but Hurricane Irma served as a reminder of the value of that equipment.

Remodeling hugely popular

The remodeling and replacement industry continues to reach new heights. One only needs to check the large audiences for HGTV’s numerous programs that highlight home overhauls. “Fixer Upper” – HGTV’s highest-rated show ever – has made media darlings and design icons out of Chip and Joanna Gaines. Their Waco retail business has skyrocketed and their 40-acre farm made the Texas city a destination.

This year, with an average of more than 30,000 visitors a week, their Magnolia Market business, complete with grain silos, should draw about 1.6 million people, according to the Waco Convention and Visitors bureau.

Their “blockbuster” series ranked as one of the top two most-watched cable telecasts in Nielsen data that covered their season four finale this past summer. Two of HGTV’s other home renovation series, “Property Brothers” and “Flip or Flop,” have also fueled the network’s rise even as ratings for other cable television companies fell.

One common denominator of these shows is ripping out walls to unite kitchen, dining and living rooms. Moulton supports the open floor plan as a positive on home values.

© 2017 Sarasota Herald-Tribune, Fla., Chris Wille. Distributed by Tribune Content Agency, LLC. 

Posted on November 20, 2019 at 7:14 pm
Michelle L. Anderson | Category: Home Ownership, Real Estate Market, Selling Your Home

Duke Energy Rebates & Free Energy Efficiency Kit

Did you know? Duke Energy has an Energy Efficiency Program that allows homeowners to get rebates on improvements. A home assessment must be completed either online, via an in-home appointment or by phone. I completed the assessment online and am now getting new insulation put in my home with a $200 rebate from Duke Energy. The current insulation is only 6″ thick and does not come close to meeting the thickness standards. The total cost to me will be $462 and I will surely save on future electric bills.

After I completed the online assessment, Duke also sent me the pictured box of energy efficient items. The weatherstrip was easy to put around my door, and who can’t use light bulbs? To find out more, please visit Duke Energy’s website.

Posted on July 3, 2019 at 1:35 pm
Michelle L. Anderson | Category: Home Ownership, St. Petersburg

New Florida Laws Went into Effect July 1, 2019

Here are some new Florida State laws that I find noteworthy:

Tree Trimming
SB 1400 allows property owners to trim or remove trees on their property without a permit as long as they have a letter from a certified arborist or landscape architect stating the tree is a danger.* This change should save homeowners time and money in the permit process.

Banning vegetable garden restrictions
Floridians, yes we can turn our front yards into vegetable gardens! A new law established in SB82 prevents local governments from prohibiting them. The issue has come up numerous times nationwide when local governments deemed that front yard vegetable gardens are not aesthetically attractive. In one instance, a Miami Shores couple had to uproot their vegetable garden. My review of the City of St. Petersburg’s ordinances leaves me unclear if there is anything that would prohibit them. This new law makes it clear. I know I have seen several front yard vegetable gardens in St. Pete, including my own neighborhood of Central Oak Park.

This article in the Tampa Bay Times elaborates on the subject. Homeowners associations may have their own rules. Also note that ordinances designed to allow access to the right-of-way and to allow clear road views may still apply.

Open Permits
HB 447 allows local governments to close a permit six years after its issuance as long as no apparent safety hazards exist. It also prevents local governments from penalizing property owners for an open permit that was applied for by a previous owner. This change goes into effect Oct. 1, 2019.

Red Tide
SB1552 establishes the Florida Red Tide Mitigation and Technology Development Initiative – a partnership between the state and Mote Marine Laboratory to develop technologies that can control and mitigate red tide and its impact. This state bill sets aside $3 million a year for the next six years to fund the project. In addition, more than $625 million in environmental funding will be used for things like Everglades restoration, completion of the project that will raise Tamiami Trail, springs restoration, beach restoration projects, a red tide/blue green algae task force and a septic-to-sewer cost-share program.

As of now, tests show no signs of red tide in the Gulf. Testing is reported on the Florida Fish & Wildlife’s website “Red Tide Status.” Scientists are forecasting a “dead zone” in the Gulf of Mexico this year due to high levels of rain. Read more about this dead zone here.

*Please consult with an arborist before cutting down trees.
Additional reference: Florida Realtors

 

 

Posted on July 1, 2019 at 8:04 pm
Michelle L. Anderson | Category: Home Ownership, St. Petersburg

What price should we offer?

When I am working with a buyer and an offer is being made, the buyer will ask, “What should I offer?” To respond to this question, my first step is to provide the buyer with comparable properties that have sold recently and collectively we form an opinion on what the home is worth. If the home needs some repairs or updating, that is taken into account on the price.

The next question from the buyer may be, “How much lower can we offer?” Let’s say for example that the home is priced at $250,000 and after reviewing the comparable sales it is determined that the home is in fact worth $250,00. The next consideration should be how long the home has been on the market (keeping in mind that we are in a seller’s market). If the home just went on the market, the chances are much lower that the seller will accept a lower offer. In addition, there is a chance that another buyer may submit an offer. In our current market, homes that are priced right sell quickly!

Say the house has been on the market for 60 days. How low of an offer is advised? In low-medium priced homes, anything that is 90% below asking price is considered a low-ball offer. Some may think it doesn’t hurt to try, but in fact it can. I have personally experienced sellers rejecting low-ball offers and declining to even counter. If the buyer truly is only willing to pay the lower price, than by all means make the offer with the awareness that it may be strongly rejected. In my role, whether I represent the buyer or the seller, I try to maintain amicable negotiations throughout the process. A low-ball offer, even if it leads to successful negotiations can start things off on the wrong foot.

I did an analysis of all the home sales in a specific area of St. Pete (Central Oak Park Neighborhood) for the last 60 days (mid-March – May). The average sale price for these homes was 96.5% of the asking price. That tells us that sellers are getting very close to asking price and they are not accepting low offers! The except is those homes that are overpriced and not selling at all!

So what would I advise offering on that $250,000 house that has been on the market 2 days? If the buyer says they really want the house, then offer $250,000. If it has been on the market 2 weeks and the list agent says that no other offers are currently expected, then offer $240-245,000. If it has been on the market for 60 days, then an offer of $230,000 would not be unjustified in my opinion.

Buyers typically want to buy low and sellers want to sell high. Working with both buyers and sellers balances my perspective. In some cases I have been selling a client’s home while at the same time procuring a new one. I ponder their expectations for selling their home above market value and not accommodating their buyer’s repair requests while at the same time submitting a low offer on their new home and expecting the seller to make repairs!

Posted on May 19, 2019 at 3:17 pm
Michelle L. Anderson | Category: Home Buying, Real Estate Market, Selling Your Home