I Love Palm Beach
I Love Palm Beach
Navigating Florida's Property Market: Insights from Dorothy Jacks
Get ready for a deep dive into the flourishing real estate market of Palm Beach County with our esteemed guest, Dorothy Jacks, the county's Property Appraiser. Dorothy's intriguing insights into the market's performance, even amidst a global pandemic, are set to challenge the status quo. Brace yourself as we follow the market's unexpected journey, fueled by the rise of remote work, which continues to keep property values high even with decreased transactions.
In the second part of our discussion, we reveal the concealed benefits of filing for the Homestead Exemption in Palm Beach County. Discover how this often-overlooked strategy can cap your property value increase at 3% each year for tax purposes. We also journey through the world of portability benefits if you ever decide to move within Florida. So, whether you're a seasoned real estate investor or a first-time homebuyer, this episode promises a treasure trove of insights that will make you view the South Florida real estate market in a new light. Don't miss out!
Thank you, thank you, thank you, thank you, thank you, thank you, hello, how are you?
Speaker 3:I'm good. How are you?
Speaker 1:I'm good. I logged in about 15 minutes early to make sure it kept freezing up on me. Who knows, I'm not sure.
Speaker 2:I just couldn't remember the format, I just couldn't remember the format.
Speaker 1:I missed the last couple of meetings you were at. I was just wondering if you could just tell us all the good news stuff. Stephanie, jump in, I'm going to let you lead.
Speaker 2:I'm going to let you lead. I'm going to let you lead. I'm going to let you lead. I'm going to let you lead.
Speaker 3:I'm going to let you lead.
Speaker 2:I'm going to let you lead.
Speaker 1:I'm going to let you lead. Hi, everybody, Welcome to. I Love Palm Beach. We have a very special guest today. We have Dorothy Jax who is our Palm Beach County property appraiser and if you're from out of state, it's not always structured like that in every state and she has quite a big job here in Palm Beach County and she keeps us in check and she keeps things very, very fair for our county. So, Dorothy, I just wanted to say hi again it's been a while and tell me how long you've been in the role and what drew you to wanting to become the property appraiser.
Speaker 3:Sure. Well, it's great to be here. Thanks so much for having me. You know I have been in the office for 34 years. I started out in right out of college actually, and just have always enjoyed the work and found and worked progressively up through the office in almost all the different sections we have and a ran for the position. In Florida, the position of property appraiser is elected. A lot of states know our role as the tax assessor. That's often what is called another state, but here in Florida we call it the property appraiser and it's an elected role, elected every four years. I like to say I run with the president, so I will rerun for election in 2024.
Speaker 1:And.
Speaker 3:I've been in the role now for seven years.
Speaker 1:OK, are there any term limits? I mean, can you keep running?
Speaker 3:No, there's no term limits. I can't do it forever. It's quite different from many political roles because it's really a working job. It's a working, working elected official. So I actually it's more like running a company. I have 230 employees in five different locations and so I come to work every day, I'm in my office and I work with my staff and really oversee the operation, as opposed to being more of a representational politician who has, to, you know, be out and I mean I am out in the community a lot, but it's different in that I do have a sort of real function of running a running an office.
Speaker 2:OK, so we have so many questions, we'll try to keep it to the high level stuff that will apply to everyone. Before we get into that, give us your take on the real estate market in Palm Beach County and maybe even some of their surrounding counties. I'm sure you keep an eye on a few other areas too.
Speaker 3:Sure, yeah Well, south Florida, I mean. Well, what can, what can we not say about the amazing market that's been taking place in our area of now, for going on really into its third year? We were all very surprised, I think, when COVID did not create a massive slowdown in our real estate economy. Instead, it seemed to speed it up. Certainly, a lot of that probably had to do with people realizing that they didn't necessarily have to live in Wisconsin. They could live in Palm Beach County and still work and and and telecommute, and work from home, etc.
Speaker 3:But the market has stayed strong, even through the declines I'm sorry, the increases in the interest rates, which I know have affected a lot of the rest of the nation. What's happened here in South Florida is, although the number of transactions happening month over month, year over year, has declined, the value at which properties are selling has not. Values have remained fairly, fairly high, high, high. To us, those of us who have been here a long time, it seems quite high. However, they've they've now held their own for well over a year, and so it'll be interesting to see what the next six months brings us. But certainly, to this point, we haven't seen a decline in the values maybe a slight, very slight decline, but the number of transactions has slowed down. So what that means is properties are staying on the market longer. However, they're still selling for the price the owner is asking for.
Speaker 2:Yeah, I mean it's a conversation that we have every day with people and at the end of the day, the real estate market, just like any other market, is supply and demand. So when you have a lot of sellers that are locked into their two, three percent interest rates, they don't want to trade for a six or a seven. So with the limited amount of inventory on the market, prices say where they are Now. If rates drop, I'm thinking that there's going to be a flood in homes on the market and players on the market maybe another value raise. Or the only other thing I can think of that might affect it is if we have a huge wave of new construction. I mean, what do you see in the area? Is there room for that much new construction? I mean we're pretty, we're pretty packed in here in Palm Beach County because a lot of the land has been developed for years, because it's beautiful beaches.
Speaker 3:So what are your?
Speaker 2:thoughts.
Speaker 3:Well, certainly I think that there's. There's plenty of room to build, actually there's. You know, if you think, I've lived here my whole well, pretty much my whole life, since high school, and it used to be for those of you that know the Palm Beach County I would pick strawberries on military trail. I mean that was the western side of Palm Beach County and now certainly the western side of Palm Beach County is much further west than military trail. So, although it doesn't appear like we have a lot of land, we do because of the agricultural areas. Unfortunately, a lot of them are getting turned over into residential properties, but that is where the growth is happening.
Speaker 3:The problem you really have with new construction is one of just simply being able to build as fast as people want to buy. So you know, between construction materials, the cost of those has finally started to decline a little bit, but certainly hiring construction experts. I mean, when you build a building, people often think, well, they just throw a whole bunch of people at it, but you actually need specialized trades. You know plumbers and people who know electrical and so forth. I mean these are not unskilled laborer doing buildings of homes and that there's just simply a supply and demand issue right there in the construction industry.
Speaker 3:However, having said that, I think there's another place that there might be some freeing up going to happen, and that's in the Airbnb market. We've seen a decline in the amount of Airbnb happening. The companies themselves have reported this. People may be going back to more of a traditional hotel model and there's a lot of property right now residential property that is Airbnb and whether they'll become a point where Airbnb owners start to see that it's not worth their expense to continue to keep a property in an Airbnb situation.
Speaker 3:I'm wondering if that's going to happen. That's my little theory of somewhere that there might be a little loosening, especially in the established market, which seems to be the biggest problem right now. You know, if you want to live on the east side of the county, you want to live anywhere near water, you want to live in, it's tough to find a home for certainly a reasonable price. You're looking, then, at much higher prices. This isn't any different than many other areas of the country, but I do think that there's a couple of things that could start to shift our landscape, I think over the next two years.
Speaker 2:And what about? Since you keep track of all this data? Let me know if you don't know on it all. But what about the trends as far as snow birds versus people staying here around? I mean, I felt that shift. Personally, I'm sure you've seen more cars on the road year round. What's been?
Speaker 3:going on. Yeah well, and isn't that really just a part of? I think that's two things One, people again being able to work from anywhere they want in the country, and the other thing, too, is it was interesting during COVID. Covid hit in March, which is traditionally getting toward the end of our season, and what I even noticed in that very first year was nobody went home. Right, why would you? And then they suddenly realized wow, it's actually pretty nice here in the summer. It may be a little warmer, it may be a little more humid, but we don't have these incredible temperature spikes, do we that we see all over the country. We? I mean, yeah, it's 90, and it never stops being 90 for about three months, but I mean it's not 104. Right, and we have great air conditioning, right?
Speaker 1:So I think people sort of.
Speaker 3:Everywhere. I think people sort of realized that Florida was a summer friendly place, albeit a little different. And maybe we're not full of summer. We're hard at work, we're used to it, you know we're all managing to get through the summer. But I do think I noticed it incredibly after COVID that now the summer doesn't seem any quieter than the winter.
Speaker 2:For sure. And then you know I want to talk about the exciting stuff, but at the end of you know it's more of a. I don't know if this is exciting to other people. It's exciting to us who understand it. But I think it's very important to cover, you know, homestead. Can you give people just a high level of homestead and portability so they understand these topics? Because nine times out of 10, when we're going through a closing, I call someone, I talk to them about the next steps and they have no idea what homestead is.
Speaker 3:Yeah, yeah. Well, I'm glad you think it's exciting, stephanie, because I think it's exciting too. What do you think?
Speaker 2:is exciting. You know, I can use that to go out on the boat. It's great.
Speaker 1:I just got my tax bill yesterday oh good. So I'm excited that I have a homestead.
Speaker 3:Absolutely so. You know, homestead's been around since the 1950s and really it's interesting just to talk about the whole. Objective when it was first passed by the legislature was to encourage people to make Florida their primary home, which we just talked about. You know, people living here full-time, as opposed to just it being a secondary home. That was the goal of homestead was to get people to make Florida their primary home. But homestead provides that if you make Florida your primary home and you don't have to be here any length of time, the key is that you have to give up any other residency benefit you're receiving elsewhere. So pretty much every state has some form of residency benefit. In New York City it's called the Star Exemption, but there's some version of a homestead in every state. So you have to give it up wherever you're coming from and you have to establish Florida as your primary home.
Speaker 3:How do you do that? You get a Florida driver's license. If you vote, you start voting in Florida, you file your taxes from Florida, you register your cars in Florida. Those are all examples of things you can do to prove that you're now in Florida as now your primary home. So once you do that, you file for homestead with my office and you can do it in person or online. Online, you can do it literally the day you close on your house.
Speaker 3:So as soon as you got out of your closing, you can sit down at your computer and fill out your online homestead application. All we ask you for is your Florida driver's license, car registrations if you've done them, your voter ID if you've done that, and then we collect that data and hold it until your deed comes through from your closing so that we can match them up Bye. The first year you file, it establishes your homestead for the next January 1st. So today, if I bought my home today in August, I could file today and the first year I would receive it would be 2024, because you have to own and occupy on January 1st in order to receive it for any given year. So I own and occupy my first.
Speaker 2:January. I thought you had to wait until January to file. That's cool that you can file right away.
Speaker 3:You can file right away. We want you to file right away because so many people surprisingly forget and we think, well, if we can get them to file the day they close, well, it's still very fresh. You know the whole. Oh, I'm a homeowner now, let me get on and do everything I've got to do. You know, let me get my lights turned on, let me get my insurance sorted out, let me file for homestead. So I've got that out of the way.
Speaker 3:So the first year you have homestead, you save anywhere between five and eight hundred dollars in taxes. So that's what the exemption is worth. It's a $50,000 exemption. It's worth anywhere between five and eight hundred dollars, depending on where you live. People who live in the unincorporated part of the county pay less tax than people who live in an incorporated area and then in the cities incorporated you. There's a lot of difference. Boca Raton has a much lower millage than, say, west Palm Beach. So it's all very variable. Anyway, the first year you get that. So 2024, you get that.
Speaker 3:But the beauty is is that every year thereafter that you continue to homestead at that same property. The value of your property can only go up up to 3% a year, or the change in this consumer price index. Whichever is less. This year it's 3%, so I'm just going to talk about it in terms of 3%. But what that means is that although the market value of your property may increase 15%, 30%, anything like that it hasn't been unusual this last couple of years your value if you're homesteaded your value for tax purposes will only go up 3%. So over time, you really start to see a significant savings in your taxes if you're homesteaded versus if you're not homesteaded, because while other property will continue to rise, your property will just tick up that 3% a year. It's also nice because it helps you sort of moderate what your tax burden is going to be. It's not going crazy up and down.
Speaker 3:The big problem that happens though I will mention this because your listeners, a lot of them, are maybe coming to Florida or thinking about moving to Florida is that you can't use the prior owner's taxes as an example of what your taxes are going to be.
Speaker 3:The reason why is the prior owner's taxes probably had this exemption on them, as it were, so you're looking at their value or tax that has been kept artificially low by this 3% cap year over year, and the law is that as soon as the person sells, their cap comes off, the property resets to market value and then it starts again for you, so you're coming in at a higher value. This is why you see neighborhoods where one person is paying $4,000 in tax and the next person is paying $10,000 in tax. It's because the person who's paying $4,000 came a long time ago, was homesteaded and has been benefiting from that cap every year, and the $10,000 guy maybe just got there five years ago. And the shame is is that you may be the last one in and you're going to pay the higher tax. But with time obviously the $4,000 person will sell and then everything sort of evens out. But if you're moving from somewhere else in Florida to Palm Beach County, you can actually port a benefit in or to any county in Florida. There's something called portability.
Speaker 2:And you mentioned that there's a gap so you don't have to own those homes simultaneously.
Speaker 3:Correct. Yes, you can take a gap up to two calendar years. It's actually it's three tax year, but it's two calendar years. So if you were moving from let's say, you lived in Palm Beach and you wanted to move to Gainesville, but you didn't want to move right now. Instead, for a couple of years, you're going to travel the world or live with your boyfriend or go help your mom or you know whatever it is. You have two years to that. You can still keep that portability benefit from Palm Beach County and move it to Elachua County or move it back into Palm Beach County anywhere in Florida without losing it. If you miss that window, you lose it. So it's important that if you're in that boat, you give us a call and we'll go over. Since what if? Scenarios with you? You know what if I move? What if I leave? Now? How long do I have? We're happy to kind of run through those with you and tell you how much the benefit will be, because a lot of it is also tied to if you move to a home that's worth less than your current home, it can reduce the benefit. If you move to something more valuable, you get to take the whole benefit. You only get up to $500,000. So a lot of rules around portability. We are happy to help. That's what we're here for. We're happy to talk to people and kind of go over all those different scenarios with them for everybody.
Speaker 3:But the keys with Homestead are make sure you file. We cannot retroactively grant a Homestead. The law says you must file in order to qualify period. So everybody has to file. You don't have to refile after the first year. As long as you continue to make that your primary home, you don't have to file again. You can own another home, no problem with that. You just can't be receiving a residency benefit there. You can't rent your Homestead property for more than one month a year. It's very important. Some people think, well, I'm going to Homestead it and then I'm going to start renting it. No, you can't do that. You can only do it for one month in a year. If you do it for more than that, it's considered noncompliance with the Homestead rules. So there's a couple rules around it.
Speaker 3:However, you mentioned Rebecca mentioned she received her proposed tax notice. That's something my office mails. We just mailed them and on the back of it, on the blue side, you'll see whether your homestead has been granted, and it'll tell you also, if you have portability, how much your portability was. So a lot of good information. All that's on our website too. On our website, papa. All that information is there. Even these notices are there.
Speaker 2:So I Mean we are called. I love Palm Beach and one of my favorite things as a real estate professional is the Palm Beach County Property Appraisers office. When dealing with it, it's so user-friendly. I do have to say all your staff, every one of your employees, has always been super pleasant and very helpful, so thank you for all of that. Sometimes I'm dealing with with their counties in Florida and it's such an antiquated system. You've got your drone footage, you've got all of it, so there's lots of pools on there.
Speaker 3:Yeah, and I'll say that to everybody. I mean, I called it Papa, we call it the property appraiser, public access system, but it's WWW dot pbc, gov, dot org. Slash Papa, that's so we can affectionately call it. But do go on our website. Like you said, great, we have great aerial photography. We have a we have. We have drawings of the actual houses. You can look at an entire neighborhood and kind of see what's sold and what's still for sale.
Speaker 3:Not so much for sale, but what's sold in the last six months, in the last year and so forth. How much did it sell for? You can also see that in for interesting information about the taxes and I really encourage everybody to use the site to see use what we call the tax calculator. It's at the bottom of the detail page and you can plug in what you're going to spend on that property, what you're thinking about spending, or you can plug in a lower number if you want to. Usually our values are around 80% of true market.
Speaker 3:We do that intentionally. I can go over that, but that's about what you're going to look at and you can plug it in and it'll tell you what the taxes would be the real taxes would be if you bought it. So that can be a great way to avoid that sticker shock of Wow, the prior owner only spent $2,000 on taxes and I'm going to spend 10. You know we we hate that too. We hate that. It's sticker shock. But it's just that. It's just the law. It's just that's how the law works. We have to take off that prior owner's benefit before we can apply your homestead.
Speaker 2:Perfect. And then, to wrap up, I want to touch on one thing, just because I think it's super important to, with all of the remodels and everything you had said, that you can reach out. If you've done a bunch of remodels, you increase it for the portability. So if you wouldn't mind touching on that very briefly, and then, what are your favorite things about Palm Beach County? Places to go, exciting things happening around town and then, we're good.
Speaker 3:Well, yes, if you're doing a lot of renovation to a property, you can call us and we'll kind of tell you how that is going to factor into your future Valuation. If somebody is adding on square footage, it's very important to know that we will add that value to your base value. It will not take away your cap or anything like that, but it will increase your taxes some if you're adding square footage, if you're doing a lot of renovation, it's not such a big deal. Everybody renovates, people do stuff all the time. It isn't necessarily reflected in market value. Market value is really driven by what will somebody pay for your property, and sometimes that isn't really so much tied to okay, do you have a beautiful white kitchen? It's really tied to the location of the property you know and and that the prop, then that Property is in reasonably good shape. I always tell people you know, one person's forty thousand dollar kitchen is the next person's tear out, right, unfortunate, but true.
Speaker 2:So I think the Gut job remodel of the home. Right, you're taking a 1980s home and you're turning it into a this decade home kind of thing. Would it be worth getting it reassessed before you move to increase that tax tax benefit when you move?
Speaker 3:Well, you know you can and it is something we'll look at for you. But again, so much of our data is really based on what does the market say that your property is worth? And, yes, a Property that has been completely redone is probably going to bring a little higher it again, and all really depends on where is it and how's the neighborhood doing, and are you the only person doing renovation or is everybody doing renovation? That's going to bring the whole neighborhood up. But remember, when we value, we are looking at the sort of larger market picture, not so much Individually at your house. So, yeah, it's something you can call and ask us to do, certainly something you can approach the value adjustment board, which is the petitioning body in Florida. Every state has a similar process. But and that's something you can call us, we can explain to you. But also it's a lot information on the website about how that works. But you can actually do that to see, if you want to, can have your value raised. Remember you're going to affect your buyer Because they're going to end up with that higher value. Think about that. But and it doesn't always work, sometimes it's we won't raise it, we, we won't raise it and magistrates won't raise it either. But if it's something you want to do, you can learn more about it and how that process works on our website, certainly.
Speaker 3:And what do I love about Palm Beach County? Well, I don't know. I love everything about Palm Beach County. I love the water. I'm a big water baby. I've always loved the water, so I love that we have lots of water. I get a little squirrely when I have to go to the middle of the country and there's no water nearby and I think people in Florida are just wonderful.
Speaker 3:You know a lot of people come from other states and they're a little nervous about, oh, florida's people. You know they think people aren't. People are wonderful in Florida. We're like this incredible melting pot from all over the world, especially in South Florida. You really get a sense of a big city now. You know you get that's. There's just there's wonderful restaurants everywhere from every possible culture and I Really like that, I love. A lot of people complain, you know, oh, the Florida's not what it used to be. I don't know. I think Florida's just a great place. We've got the beautiful weather, we've got really lovely people and this incredibly sort of neat Ethnic blending happening all over the place, so it's a lot of fun.
Speaker 1:I agree with you a hundred percent. I sometimes vacation and think why did I go anywhere else? It's amazing where I live.
Speaker 3:Absolutely yeah, yeah.
Speaker 1:Well, thank you again for always taking time for us and running your office that so amazing and so helpful to everybody, and we will bug you again in a year or two and have you back, but I really appreciate it. Thank you so much.
Speaker 3:Thank you, and thanks for all the great questions too. Stephanie, it's good to see you again. See you both again and let me know whenever I can come back. I, I, I, you know I love my work. I think it shows, and I, you know, we're public servants. That's what we do down here is we try to be good stewards of both your funds, which are paying our salaries, but also just be who we are, which is that we're in office. It's open to you. We, we operate for your benefit. So anytime you have questions or anybody any of your viewers have questions, just call us, thank you. Thank you, good to see you both Bye, bye, bye.