Decline in Pinellas property values will be steeper than expected, appraiser says

Some local governments will be facing tighter budgets than expected if the county property appraiser's forecast of double-digit drops in land values across most of Pinellas holds true.

"It's going to be a tough budget year," Pinellas County Property Appraiser Pam Dubov said.

Mid-Pinellas could see some of the steepest declines: Pinellas Park is estimated to see a 14.4 percent drop in real estate values. Kenneth City, a 14 percent decrease. Largo, a 13 percent reduction. St. Petersburg, a 12.8 percent contraction.

Seminole and Clearwater are also predicted to see double-digit drops of 11.6 percent and 11.1 percent, respectively. But those are more in line with the expected countywide decline of 11 to 11.2 percent. Even many of the beach communities, which usually manage to avoid drastic drops in property values, could see double-digit decreases. St. Pete Beach, for example, is predicted to see a 10.2 percent decline.

Dubov cautioned that the estimates are broad and could change before official figures are released in the next few months. But Dubov said she believed the forecast needed to be handed out because many of the county's taxing authorities were predicting single-digit declines ranging roughly from 7 to 9 percent.

"I needed them to know" the picture was bleaker than expected, Dubov said, while there is ample planning time.

Dubov blamed the drops on a combination of factors that include the poor real estate market, high foreclosure rates and the difficulties businesses are facing. Areas with little commercial property, such as Belleair Shore, Belleair, Belleair Bluffs and Redington Beach, tended to fare better. They are predicted to see small, single-figure declines in land values.

"We were estimating 12 percent so it's a little worse than what we were expecting," said Tim Finch, St. Petersburg's budget director. "It hurts."

The extra 0.8 percent decrease would remove an additional $660,000 from St. Petersburg's budget, he said. As it is, the city was expecting to reduce its operating budget from about $207 million to $200 million. But cutting, Finch said, has become "the name of the game these days the way property values are going."

He was unable to predict where those cuts might be made.

Largo had estimated a 10 percent drop so the 13 percent forecast by Dubov came as an unwelcome surprise, City Manager Mac Craig said. He said the city doesn't expect property values to drop as much as Dubov predicted, but "we're prepared to deal with whatever."

Craig said some of the losses could be offset by other income, such as franchise fees, which remain strong. And the council could decide to take any shortage out of reserves.

"Right now, we're doing okay," Craig said.

Clearwater was also a bit off on its projected estimate, but in the other direction. City Manager Bill Horne said officials there had thought the decline would be 12 percent. That's not much more than the 11.1 percent drop that Dubov predicts, but Horne said he'd take any good news he could get.

"But it's still a double-digit number," Horne said.

Clearwater, he said, has cut all it can over the past couple of years and "we're clearly at a point where we're going to have to continue with layoffs." The city is also facing the possibility of reducing services and closing facilities, Horne said. But what could be on the chopping block won't become clear for a month or so when a preliminary budget goes before the council.

Pinellas Park officials said they were not caught by surprise.

"We've known that it's coming because we've been watching," city spokesman Tim Caddell said.

Caddell said Pinellas Park, like other cities, is at a preliminary stage in its budget planning, so it's unclear how the situation will affect things. Caddell said Pinellas Park has had a hiring freeze for the past few years, and it's likely that will stay in place.

Seminole budget guru Harry Kyne said he believes the tight budgets will continue for the next few years. Some indicators show the recession ending, he said, but unemployment remains high. Until people have jobs, they won't be able to buy things, and that will help keep the housing market depressed for several more years.

Dubov's prognostication does have a silver lining for a few. Some property owners, she said, may see a reduction in the taxable value of their homes. That would especially be true of people who bought at the height of the real estate bubble.

Reach Anne Lindberg at alindberg@tampabay.com or (727) 893-8450 or at twitter.com/alindbergtimes.

Forecast of 2010 property values

City/municipalityPercentage change since 2009

Belleair Beach-6.1
Belleair Bluffs-9.6
Belleair-5.3
Belleair Shore-4.5
Clearwater-11.1
Dunedin-9.8
Gulfport-11.9
Indian Rocks Beach-8.5
Indian Shores-11.5
Kenneth City-14
Largo-13
Lealman Fire District-13.3
Madeira Beach-10.9
North Redington Beach-10.4
Oldsmar-12.9
Pinellas Park-14.4
Redington Beach-6.6
Redington Shores-10.1
Safety Harbor-9.2
Seminole-11.6
St. Petersburg-12.8
South Pasadena-11.6
St. Pete Beach-10.2
Treasure Island-10
Tarpon Springs-11.3
Pinellas County-11

Source: Pinellas County Property Appraiser

Decline in Pinellas property values will be steeper than expected, appraiser says 04/20/10 [Last modified: Tuesday, April 20, 2010 6:13pm]

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