Take the Survey! 30A Radio Real Estate Round Up Market Survey

[SHELLY]

Not really sure how the differences played out. These were bank owned foreclosures so I would bet our kids will be saddled with the debt sometime in the future.

Sweet.

A compelling series of articles outlining how "RE value" was manufactured in Florida (and why that "value" won't ever be seen again in our generation):

'Flip that house' fraud cost billions
'Flip that house' fraud cost billions | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader

Flippers' toll: On Gulf Coast, half a billion in defaults
Flippers' toll: On Gulf Coast, half a billion in defaults | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader

The king of the Sarasota flip
The king of the Sarasota flip | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader

Flipping fraud ignored by police and prosecutors
Flipping fraud ignored by police and prosecutors | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader

Lenders failed to heed red flags
Lenders failed to heed red flags | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader

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What was uncovered in Sarasota happened in ALL of Florida--including here:

http://www.heraldtribune.com/assets/pdf/SH17326717.PDF

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...it stunk out loud and here's why

How flipping fraud hurts homeowners
How flipping fraud hurts homeowners | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader

PROPERTY VALUES

When property flips at inflated prices, those deals artificially drive up the market value of homes for miles around.

The inflated sales help establish a baseline of what property in a community is worth. Flippers know if they can sell one property for an inflated amount, that sale can be used to justify additional inflated property transactions. Before approving loans, banks perform appraisals that compare the sales value of the property being purchased with similar properties.

The same process occurs when refinancing or applying for a home-equity loan. Based on inflated sales in your community, a bank may allow you to borrow too much and leave you owing more than you could hope to recoup when selling.

PROPERTY TAXES

Elected property appraisers set the taxable value on your house by looking at sales of properties similar to yours. Properties that are sold between relatives are usually not considered because they are not "arm's-length transactions" and therefore may not reflect the true value.

But property appraisers often are unaware when flips occur between business partners or associated parties who do not share the same last name.

The Herald-Tribune found that suspicious flips have been used to help set taxable value, leading to higher tax bills.

FORECLOSURES

A Herald-Tribune analysis of suspicious flips in Manatee and Sarasota counties suggests that flipped properties are more likely to end up in foreclosure.

Experts say that the local trend likely occurred across Florida, so that areas of high speculation were left with high levels of foreclosure.

More foreclosures in a given community means more downward pressure on real estate prices; the end result is that home values drop.

In addition, studies show a link between an increase in vacant homes and an increase in crime.

FEDERAL BAILOUT

When a property's value is artificially inflated, a bank may be stuck with an overvalued asset if the homeowner defaults on the loan.

The crush of foreclosures following the real estate boom left banks saddled with properties worth far less than the mortgages. Banks faced such big losses that they did not have enough capital to cover them and had to stop making loans of all kinds. America's banking system nearly shut down in October.

As a result, the federal government spent billions in taxpayer money to recapitalize banks and rescue other financial institutions.









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[Bobby J]

tis a shame... It would fix itself.

 

[Busta Hustle]

Another disturbing result is the fact that state and local legislators are working furiously shifting the tax burden from "slightly lower" assessed values on property, to sin taxes, to registration fees and bed taxes sales taxes this fee that tax every where a tax tax.

The state also told property apprasisers they did not have to consider foreclosures in their comps for assessed-taxable value if there are only a "few in an area". Although when 1 lot sold in 2004 at 500 times reality every other lot was assessed and taxed at that same inflated value.

Did you notice the pa has said we have only lost 18% of our property value overall. BS BS BS

 

[Smiling JOe]

Well said, Busta Hustle. I read that somewhat surprising article last month, too. It seems that Counties are left to make that decision as to whether or not to include distressed sales in their assessed values. Currently, it seems that the majority of sales in our area ARE distressed sales, and having no other sales upon which to base assessed value, if our Property Assessor throws out distressed sales, we are likely still looking at 2006-2007 valuations for assessments. SCARY!

Does anyone on here know if Walton County is throwing out distressed sales to valuate property?

 

[wadzilla]

SJ, the guidelines are set by the State--not on a county by county basis. The Counties are audited periodically in sales ratio studies to be sure they meet guidelines of approximately 90% accuracy based on State guidelines for valuation designations. In general, "the best available information" criteria is used which would take into account all information including the effect of distressed sales. Generally, understaffed or incompetent Assessors offices are found to be "chasing sales" on individual properties instead of applying uniform metrics across the board for similar properties.