How Much Is Your Home Worth?

Two weeks ago, real estate agent Steve Fruit was examining the value of a Lake Placid house for the owners, who are thinking of selling. For tax purposes, the Highlands County Property Appraiser had valued the property at $254,769.

It's a three bedroom, two bath, 1,600 square-foot house in a nice neighborhood, built in 1993. Cathedral ceilings, good carpet, but no granite countertops in the kitchen, and no pool in the back.

"I believe it will sell for $199,000," Fruit said.

So the question is, why is there a 30 percent difference in his appraisal and county's assessment?

"I know what's happened," said Fruit, who represents buyers and sellers for RE/MAX Realty Plus II. "Nothing has sold in that neighborhood in over two years."

Legal Methodology

In 2007, Raymond McIntyre was promising taxpayers that home values were going down. That meant property taxes would also decline.

"Now we're down the road to 2008, and we've not had any recent sales," said Highlands County's property appraiser.

Which means the appraiser's office has no legal method of adjusting the value of the property, McIntyre said.

The Florida Department of Revenue requires appraisers to use arms-length transactions to assess property values, McIntyre said. Foreclosures, auction sales, inter-family sales and short sales (where the bank agrees to accept less than the total mortgage) are not permitted.

The county had 40,700 real estate sales in 2005, McIntyre said. So far in 2008, there have been only 6,600 sales in Highlands County's 500 neighborhoods.

"That not enough sales for some neighborhoods," McIntyre said. "Sometimes, we have to go back to 2005 to find qualified sales in some neighborhoods."

"I'm running into the same thing," said Fruit, who analyzes the value of homes for buyers and sellers. They use his numbers to decide how much to price their house, or how much to pay for someone else's house.

"So many properties are overpriced," Fruit said. "That's why they're not selling."

No Comparison

It wouldn't make sense to use a county-wide average, or even a subdivision average, McIntyre said.

For instance, Highlands Ridge is subdivision across from Sun 'N Lake of Sebring. Homes in the two subdivisions are far different.

"There are four or five neighborhoods in Sun 'N Lake. You've got some homes on the golf courses, some are custom homes, some are small spec homes," McIntyre said. There are also blocks with rows of duplexes.

The appraiser is certain that property values have declined. The question is, how much, and how can that be accurately assessed?

"We know the value is not the same as 2005," McIntyre said. "We know it's come way down. But there's nothing to document it."

"If they're using 2005 prices, they're using prices that are 30, 40, 50 percent higher," Fruit said. His method is to examine trends. If the value of houses in a neighborhood is down 15 percent, he factors that in his analysis.

As president of the Florida Property Appraisers Association, McIntyre has scheduled a meeting Nov. 12 with the Department of Revenue. They need an alternative method of assessing home values.