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Highlands Today

Buyers Are Putting A Hold On Real Estate Decisions

Jesse Osbourne/Highlands Today

From left: Dottie and Bennie Beckman and their dog Dutchess stand in the backyard of their home on Orange Grove Drive. The Maryland couple bought the home in 1999 as a winter residence and have done a lot of home improvement and landscaping. The Beckmans’ property tax is becoming too expensive to afford and they are contemplating selling the house in the next year or two.

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By Gary Pinnell | Highlands Today

Published: October 10, 2007

Highlands County's topsy-turvey real estate market is causing Realtors, landlords and homeowners to reassess their decisions.

- Chip Boring, the broker at RE/MAX Realty Plus in Sebring, said falling rental prices are keeping homeowners who are renting the unit until they sell it from breaking even.

- Ronald VanHouten said the resale of property is driving up valuations, which in turn is increasing taxes.

- Bennie and Dortha Beckman may stop wintering in Sebring because of the increase in taxes and insurance.

Realtors

"The rental market is like the housing market," said Boring. "We have a surplus."

The prices of homes doubled or tripled during the 1990s and 2000s.

"Now the market is adjusting, and the prices are coming back down," Boring said. But the principal, interest, and taxes and insurance landlords are paying now are making it difficult to break even, Boring said.

"I have one house, a two-bedroom, two-bath with a family room, and the payments are over $1,000," Boring said. "I'm having a hard time renting it for $850. People are offering $750, because they can't afford to pay more."

Salaries in Highlands County didn't keep pace with the rise in real estate prices, Boring pointed out.
Even so, snowbirds who sell their northern properties are paying cash, or borrowing little money for mortgages, Boring said.

He's also seeing more lease-purchase options, which reduce the down payment needed, and houses are also staying on the market longer, Boring said.

"People are being very cautious," said longtime real estate broker Ruth K. Davis, "and they'll continue to be that way until they're confident they've got a good deal."

VanHouton

"My wife and I managed a senior winter resort on Dinner Lake for three years," VanHouton said. "It was a clean and reasonable place to spend the winter.

"The problem is that in the last seven years the resort has been sold twice. Each time the previous owners have doubled the original investment, thereby increasing the taxes and insurance and making it impossible to maintain it as a winter resort," VanHouton said.

"I have several rental properties of my own now and I have one that is a seasonal rental in a 55-plus community. The seasonal rental is my lowest grossing property, mainly because of the taxes and insurance," VanHouton said. "The rental market is depressed right now because of the glut of houses for sale, so if they cannot sell the house, they are renting it out to offset the mortgage and taxes. In the near term, it would probably be wiser to rent than to buy."

The Beckmans

Dortha Beckman is dismayed at the difference between Florida, where they have a small concrete block house in Sebring, and Maryland, where they have a new home on a 25-acre farmette close to a resort and a lake.

"We pay one-third of the taxes there that we do here," Beckman said.

When they bought the house on Orange Grove Drive, the taxes were $600 a year, Beckman said. The latest tax bill was for $3,000.

She and her husband are afraid to do much work on it because the value will increase.
"We haven't painted it yet," Beckman said. "Do we dare?"

Even more distressing: their two neighbors pay $700 and $800 a year for bigger houses, and one has a pool, she said. The difference is that the neighbors have homestead exemptions and the 3 percent Save Our Homes cap, the Beckman's homestead exemption is in Maryland.

"We love it here," she confessed. During the six months they're in Sebring, he volunteers for Habitat for Humanity, she helps her church. When they came here, they felt welcome, but the high taxes and insurance are making them feel less so.

"What are you saying?" she asked rhetorically. "Don't come here and buy a house?"

Others Are Coming

Joseph R. Dalla Valle of Windber, Pa., has bought here anyway.

"Last May my wife and I, both still actively working, purchased a beautiful smaller home in Sebring," Dalla Valle said. "We eventually hope to retire, at least part time, to Sebring.

"We searched other areas of the state and found Sebring to our liking for several reasons. What we found most appealing was its proximity to the rest of the state, especially either coast. The area has shown economic growth which we know is important. I'm sure Sebring is not perfect but it seems to suit our needs quite well," he said.

"Property taxes and insurance could always be lower, but I suppose that's the price one pays to live in paradise," Dalla Valle said. "I love western Pennsylvania. The fall season is beyond compare to anywhere in the country. Winter, in my opinion is another story, that's why Sebring to us, is so appealing. I suppose we could have rented a property for the brief time we are there. Home prices were quite appealing so for us it was the right thing to do."

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