Is Florida becoming too expensive?

[bubba]

We had always talked about retiring to Florida (still 8-10 yrs out). My SIL lives there and says the homeowners' insurance premiums are driving people away, and someone else told me that the property taxes are going sky high. We wouldn't plan on the coast, but would like to be within 30-45 minutes of the beach. Is Florida only for the wealthy these days?

 

[Rich_by_the_Bay]

We had always talked about retiring to Florida (still 8-10 yrs out). My SIL lives there and says the homeowners' insurance premiums are driving people away, and someone else told me that the property taxes are going sky high. We wouldn't plan on the coast, but would like to be within 30-45 minutes of the beach. Is Florida only for the wealthy these days?

Homeowners' insurance has skyrocketed. Taxes are more variable, probably comparable to desirable areas up north (lower than some parts of Wisconsin, for example). The property tax is capped at 3% increase per year with reappraisal only upon sale, which has created some strange situations where depending on when a property was last purchased, there may be discrepancies where more expensive homes have a lower tax than less expensive ones -- the state legislature and governor are actively working to remedy this, but who knows where that will end up.

OTOH, home prices are dropping nicely in many areas and it is a great time to be a buyer (according to my realtor wife). Many very, very nice properties in some areas are priced at historic lows.

The great equalizer to all this is the lack of a state income tax. When we last did the arithmetic, despite all the above, it still cost us less in taxes and insurance overall than it would in most other areas we have lived. The income tax leveled things out. Especially away from the coasts, Florida is affordable.

 

[73ss454]

Homeowners' insurance has skyrocketed. Taxes are more variable, probably comparable to desirable areas up north (lower than some parts of Wisconsin, for example). The property tax is capped at 3% increase per year with reappraisal only upon sale, which has created some strange situations where depending on when a property was last purchased, there may be discrepancies where more expensive homes have a lower tax than less expensive ones -- the state legislature and governor are actively working to remedy this, but who knows where that will end up.

OTOH, home prices are dropping nicely in many areas and it is a great time to be a buyer (according to my realtor wife). Many very, very nice properties in some areas are priced at historic lows.

The great equalizer to all this is the lack of a state income tax. When we last did the arithmetic, despite all the above, it still cost us less in taxes and insurance overall than it would in most other areas we have lived. The income tax leveled things out. Especially away from the coasts, Florida is affordable.

Rich is correct about the state income tax and that's great as long as you have income.

Also the taxes here are nuts. My house that I purchased 4 years ago today went from 2800 a year to over 8K. While my next door neighbor who has the same house and with a pool pays 3800. Something is wrong here for sure.
HO ins is also very expensive, seems the ins co's. have a liscense to steal in Fla.

Out of 46 houses in my community 14 are for sale and not one has sold in the last 2 years even with big price adjustments. Everyone is running to the Carolina's, or at least trying.

 

[Rich_by_the_Bay]

Rich is correct about the state income tax and that's great as long as you have income.

Good point - I'm all in tax deferred assets so I'll have income, but not everyone will.

Your message also pointed out how variable things are from county to county and from neighborhood to neighborhood. I live in a fairly urban area of Tampa, a nice neighborhood of homes mostly 20-40 years old, shaded streets, etc. There are more houses for sale than before, and they are taking longer but most are holding fairly well in price, perhaps same as or down 5% from last year's peak.

Not planning to move in the immediate future and hoping things here and around the country settle down when the time comes. I like it here.

 

[JustCurious]

Good point - I'm all in tax deferred assets so I'll have income, but not everyone will.

Your message also pointed out how variable things are from county to county and from neighborhood to neighborhood. I live in a fairly urban area of Tampa, a nice neighborhood of homes mostly 20-40 years old, shaded streets, etc. There are more houses for sale than before, and they are taking longer but most are holding fairly well in price, perhaps same as or down 5% from last year's peak.

Not planning to move in the immediate future and hoping things here and around the country settle down when the time comes. I like it here.

Rich, I am very familiar with the Tampa area, and based on my observation, homes in the south Tampa area in well established neighborhoods (Palma Ceia, Hyde Park, etc) are falling in price but somewhat less than the outskirts and the ex-urbs(Carrollwood, Temple Terrace, Westchase, etc). In general, I think the farther a home is from downtown, and the newer and less established the area, the greater the price drops, and I think this rule holds true for other major cities in Florida as well.

 

[Moemg]

In the twelve years that I've lived in Florida ,it's gone from super affordable to are you kidding with that price ??Home owner's insurance is nuts .Mine went from $2,000 to $6,000 until I was dropped .Now it's $2,000 with a $27,000 deductible . Property taxes are bizarre .You could be paying $5,000 and the same house next to you is paying $1,500.

 

[Rich_by_the_Bay]

Rich, I am very familiar with the Tampa area, and based on my observation, homes in the south Tampa area in well established neighborhoods (Palma Ceia, Hyde Park, etc) are falling in price but somewhat less than the outskirts and the ex-urbs(Carrollwood, Temple Terrace, Westchase, etc). In general, I think the farther a home is from downtown, and the newer and less established the area, the greater the price drops, and I think this rule holds true for other major cities in Florida as well.

Agree -- those are the areas I was referring to. Typical drop is 5%, though there is some degree of overpricing (as in, "what are you smoking") which makes the drops hard to interpret. And no one knows where the floor is yet.

 

[mickeyd]

I notice that USAA will no longer offer homeowners insurance to any new Florida residents unless they are transferred to Florida by the military.

This is a huge change and an indicator of how crazy it must be getting in Florida, my home state.

 

[scubamonkey]

It is much more expensive than it was 10 years ago.

We bought a house for about 160K and now it would sell for about 300K. This has caused a big increase in property taxes. If we bought this house today our taxes would be about $2000 more a year. Can you ever really own real estate - or do we just pay the government rent?

I live in the historic district of downtown pensacola and the wind/hurricane insurance has gone from $400 to $1600 after hurricane Ivan and Dennis. My insurance company (Nationwide) will only write homeowners when you exclude the wind part. so we have to buy wind insurance seperately. If you choose to live further away from the water then most companies will write a combination policy and it will save you some bucks.

Otherwise, the cost of living is similar to the midwest - I think Penscola comes in at about 84% of the national average.

 

[lets-retire]

I notice that USAA will no longer offer homeowners insurance to any new Florida residents unless they are transferred to Florida by the military.

That's what they told my wife in 2002, when I moved there. She asked who insured their properties and we were given the insurance.

 

[FinanceDude]

Good point - I'm all in tax deferred assets so I'll have income, but not everyone will.

Your message also pointed out how variable things are from county to county and from neighborhood to neighborhood. I live in a fairly urban area of Tampa, a nice neighborhood of homes mostly 20-40 years old, shaded streets, etc. There are more houses for sale than before, and they are taking longer but most are holding fairly well in price, perhaps same as or down 5% from last year's peak.

Not planning to move in the immediate future and hoping things here and around the country settle down when the time comes. I like it here.

I should have bought the bungalow in Port Charlotte from the owner (he offered) when I rented it in 1987..........might have made a few bucks............

 

[Sandy]

Things are still relatively inexpensive away from the coast or in the northern part of the state. In Tallahassee we did not see the same run up in property values, and as a result, not the same correction. Also, homeowners insurance is still quite afforable.

Recent sources are touting Tallahassee among the top 10 places to retire including:
Military Officer, the flagship publication of the Military Officers Association of America and in March, Where to Retire magazine.

But if everyone comes here - I will have to move!

 

[lazygood4nothinbum]

florida housing prices began boiling up years before the bubble due in part to our phenomenal population growth especially at a time, particularly in south florida, when land became scarce. broward county (fort lauderdale area) is now reaching buildout i.e. there ain't no vacant land left.

even given global warming, high prices & hurricanes, recent studies indicate that land here will continue to become ever more precious as population continues to increase.

many areas of south florida likely will become the domain of mostly just the old & rich. fort lauderdale already is no longer where the boyz are enjoying their sunday t-dance, rather where the old queens gather for tea. and by tea, i mean actual warm drinks served with toast. it's all rather depressing.

there are still lots of affordable places even in south florida. i just received notice that i'll be getting money back on my wind insurance due to, albeit minor, rate cuts and as mentioned florida is working towards some form of property tax reform. if you search "life after fire" forum you will find my recent take on daytona property where you can live a block off the beach for a quarter mil or less. also there are lots of inland locations, especially towards the mid west coast and in the northern parts of the state where that money will get you a lovely home on its own acre.

i am considering a move to one of those locations in my early retired future.

 

[Rich_by_the_Bay]

there are still lots of affordable places even in south florida...also there are lots of inland locations, especially towards the mid west coast and in the northern parts of the state where that money will get you a lovely home on its own acre.

i am considering a move to one of those locations in my early retired future.

I think we stumbled into one of the more desirable regions of this diverse state. Since we got the small RV we've explored quite a bit. Places we like include Tampa Bay area, Sarasota, Gainesville, St. Augustine, Tallahassee, Winter Park, lots of Keys, Sanibel, Marco. Lots to do in Orlando but not sure I would move there.

Anyhow, it has gotten more expensive, but so far well worth it to us. I used to think that hurricanes were the show-stopper, but the more I read each year about virtually every other area of the country getting dangerously slammed with one calamity or another I'm thinking you take your chances wherever you are, and we have been fortunate so far in not getting hit by anything significant (knocking on wood).

 

[johnlw]

I've lived in Florida my entire life.

There's no doubt that things have gone up quite a bit recently. As others have mentioned, the biggest issue right now is house insurance. My insurance company just sent me a letter last week saying my policy wouldn't be renewed because of "Property conditions". I called the agent and they told me the issue was the roof (I have a metal roof). They told me if it was more than ten years old, I would have to replace it. Ten years is nothing for a tin roof. So it appears that maybe they're just trying to drop me. I'm in the process of shopping around for another policy. It looks like I'll have to take at least a $1,000 increase on my insurance costs annually.

However, when you factor in no state income tax, relatively low property taxes (mine are $1,400 a year, however, I've owned the house for twelve years), and the quality of life, it's still a pretty nice place to live, particularly if you're in a semi-rural area.

John

 

[73ss454]

John, what would the taxes be if you sold the house to a new owner? That's why less and less people are moving here and many want to leave. If you've been here for a while it's OK but the new people are being chased away. That may be good or bad in your eyes.

 

[johnlw]

73ss454,

I'm not sure. However, I have a friend who's a realtor, I'll check with her.

John

 

[PPT]

Homeowners' insurance has skyrocketed.

My insurance on my Miami condo has gone up around 100% in the last two years. Not only has it gone up I am no longer covered for wind damage. If that is not a kick in the groin my condo associate fee goes up around 10% a year.

A lot of people I know in Florida are moving to North/South Carolina because of this reason (insurance cost - paying more for less coverage).

 

[PPT]

Everyone is running to the Carolina's, or at least trying.

Opps, I just read your post after posting my last one - I can vouch for the above comment.

 

[johnlw]

I checked with my realtor friend.

She said if someone bought my house now, the taxes would run about $3,000 a year.

John

 

[d0ug]

What is your reason for choosing Florida [good weather – quiet?] Have you ever considered moving a little more south to the Dominican Republic. No land and house taxes, health insurance for my wife and I is about US$ 500 per year. We also have good weather and quiet.

 

[PPT]

What is your reason for choosing Florida [good weather – quiet?] Have you ever considered moving a little more south to the Dominican Republic. No land and house taxes, health insurance for my wife and I is about US$ 500 per year. We also have good weather and quiet.

Because hurricanes use you guys as a speed bump.

 

[d0ug]

Please check your facts we get less hurricanes than Florida and also there is many mountains which kill hurricanes.

 

[PPT]

Please check your facts we get less hurricanes than Florida and also there is many mountains which kill hurricanes.

Recently you are correct. Did you live there in the late 1990s? On the other hand, where do you evacuate too?

 

[tiredofwork]

I notice that USAA will no longer offer homeowners insurance to any new Florida residents unless they are transferred to Florida by the military.

This is a huge change and an indicator of how crazy it must be getting in Florida, my home state.

This is USAA's reaction to the insurance price controls state government imposed a few months back, as well as the legislature deciding to make Citizen's (formerly insurer of last resort) compete with the real insurance companies. As Citizen's has a lower cost structure and losses will be subsidized by all of Florida's insured's, USAA feels it is being unfairly competed against.

For those that don't know, the legislature will be called back for a special session to "solve" the property insurance crisis.