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Property values take 6 percent dip in Pasco

Mike Wells admits he missed the mark.

Last year, he told county commissioners that property values were finally beginning to stabilize. Better times were ahead.

But this week's release of figures for local governments' upcoming budget year tell a different story, with values down countywide by nearly 6 percent, and down in all but one of Pasco's six cities.

"My staff and I discussed this thing several times and it appeared things were turning around," Well said. "But it's gone down nearly 6 percent. I was wrong. That's what the market is telling us. We simply monitor what buyers pay for property."

Wells said it's not his really job to be an economic forecaster, but his staff looks at factors like vacancy rates on commercial properties such as warehouses and offices. If those rates go down, that indicates the market is improving. He said vacancy rates are decreasing in Wesley Chapel and Trinity, two areas that have new hospitals either just built or under construction.

"I'll stick my neck out one more time and say 2012 is going to be better than (last) year," he said, noting that the figures released this week reflect all of 2011. He attributed the continued slide to ongoing sales of distressed properties, but said he's hearing that some of those are sparking bidding wars.

"Of course those are the ones in good condition," he said. "Not the beat-up houses with no cabinets."

The fallout is already causing some heartburn for local officials.

County budget writers were assuming a 4 percent drop, but the extra nearly 2 percentage points will result in a higher tax rate in order to raise the same revenue as last year. Budget director Mike Nurrenbrock said he was in the process of recalculating the rate, called "the rollback rate." County commissioners all expressed support for the rollback rate several weeks ago, but that could change since the rate will be higher.

"That's not something you can put a Christmas bow around," said Commission Chairwoman Ann Hildebrand.

She said that news comes at a bad time since the state legislation requiring counties to reimburse the state for disputed Medicaid bills may not be resolved until the next legislative session in March. That law translated into an estimated $3.5 million hit for Pasco.

Still, Hildebrand, who is retiring at the end of the year, said she's committed to supporting the rollback rate — which originally would have added $33 to the tax bill of the average home.

"It's two dinners at Red Lobster," she said.

Commissioners Ted Schrader and Jack Mariano, who face opposition in their re-election bids, didn't say what they would do.

But Schrader called the latest news "disappointing" and said more cuts might have to be considered in the budget process if the new rollback rate turns out to be much higher than what commissioners had initially agreed to support.

"There are still a lot of unanswered questions," he said.

Some cities were harder hit than the county, with New Port Richey's values plunging nearly 11 percent.

Finance director Doug Haag said the city "may have to make some tweaks" in its budget, which has been plagued by falling values for the past few years.

He said employees have not had a pay raise in nearly four years and likely would not see one this year.

"Things have been tight," he said.

Realtor Greg Armstrong, who has served as chairman of the West Pasco Board of Realtors, said the situation is dire for New Port Richey, where less than half of all homes are owner-occupied.

"New Port Richey is in crisis mode," he said. "We've got to do something to turn around the city of New Port Richey."

He said an investor in New Port Richey told him recently that he had just bought his first "POJ."

"That stands for Piece of Junk," he said. "He hopes to start renting it out soon."

Still, Armstrong sees bright spots. Sales prices are holding steady. Some short sales are sparking the bidding wars that Wells described.

"We've got one where the bank accepted offer No. 23," he said.

Taxable property value percent changes for 2012 vs. 2011

Pasco School District - 5.86 percent
Pasco County - 5.94 percent
Dade City - 4.65 percent
St. Leo + 2.02 percent
San Antonio - 5.40 percent
Zephyrhills - 7.63 percent
Port Richey - 3.61 percent
New Port Richey - 10.78 percent

Source: Pasco County Property Appraiser

Property values take 6 percent dip in Pasco 05/25/12 [Last modified: Friday, May 25, 2012 6:26pm]
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