After a debilitating illness and a prolonged recovery, Tampa Bay property values are finally healthy.
Hillsborough, Pasco and Pinellas counties are projected to enjoy their fourth consecutive years of rising taxable property values in 2016. Hernando County expects a third straight year of growth.
Those consistent increases in the counties' tax rolls are a strong indicator that the bay-area real estate market has returned to normalcy after being thrashed by the Great Recession, said Greater Tampa Association of Realtors director Brad Monroe.
Property values are also growing at a safer pace, he said, instead of the dangerous double digit annual gains that led to the unsustainable housing peak in 2007. That's when the bubble burst, setting the stage for the devastating crash that followed.
"I think we're back on that normal (growth) in property values that over the last 100 years you probably saw more times than not," Monroe said.
"That means it's healthy. It gets people that were upside down back in the market and able to move without doing a short sale or foreclosure. It entices people to purchase that wouldn't have otherwise purchased because they see values going up every year."
That growth, in turn, will help tax rolls and give elected officials across Tampa Bay room to restore priority services without resorting to millage rate hikes.
Hillsborough County Administrator Mike Merrill said it's a nice problem to have after several lean years of budget-cutting.
"Part of it is we are now, if not the highest, one of the highest growth areas in state," he said. "Not just Hillsborough, but Tampa Bay."
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In Pinellas County this year, officials expect an increase of $4.6 billion to the tax rolls. That's a 7.35 percent bump compared to last year, raising the county's total value to $68.2 billion.
That rising tide can also be seen across the bay in Hillsborough County, where officials project an increase of $5.7 billion in taxable value in 2016. That 7.84 percent increase will see Hillsborough's total values reach $79.2 billion.
Pasco County expects a healthy 6.84 percent boost in 2016. That will bring in an extra $1.5 billion over last year for a total value of $22.9 billion.
Hernando County should see its third straight increase after property values began a drastic nosedive in 2008. The $200 million added in taxable values this year is 2.8 percent higher than 2015. Hernando's total values in 2016: $7.4 billion.
"I've been here a long time and this just felt like the first normal year since I've been in office," Pinellas County Property Appraiser Pam Dubov said. "When I took office in 2009, we were in the early stages of the Great Recession and the market was crashing.
"This year literally every city in the county and the county as a whole have seen increases in value. That was not the case the first four, five years I was in office."
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Cities on both sides of the bay also saw steady increases in taxable values, which governments use to set tax rates and prepare budgets.
Madeira Beach saw the most growth in Pinellas County in 2016 with a 9.9 percent jump to $1.08 billion, followed by South Pasadena with a 9.81 percent jump to $550 million and a 9.75 percent jump in Indian Rocks Beach to $980 million.
The city of Tampa's taxable value is expected to grow 7.92 percent this year to $28 billion while Temple Terrace had a more modest increase of almost 6 percent to $1.3 billion.
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Officials attribute that growth to a decline of foreclosures on the market and a drop in the supply of homes for sale.
And with fewer homes on the market, it's back to being a sellers game.
Markets strike a perfect equilibrium between buyers and sellers when there is a six-month supply of homes, experts say. But Pinellas County currently has about a three-month supply, said Charles Richardson, senior regional vice president of Coldwell Banker.
When buyers outpace sellers, prices creep up. But for the past few years, that demand didn't drive prices as drastically because of the abundance of short sales from foreclosures, Richardson said. Asset managers had to keep prices low to move inventory quickly.
Now that's changing.
While bank-owned properties made up 20 to 25 percent of the market a few years ago, Richardson said, the last six months have seen a dramatic drop to about 4 percent.
Even with the fewer active listings, property values are higher now because there's no longer an abundance of foreclosures dragging prices down.
The future, Richardson says, lies in the age-old question of economic influences — whether this market can thrive in its healthy state without returning to the bloated pricing of the bubble era, prices that would be out of reach for the area's wage earners.
"The Tampa Bay area is probably as healthy as any market in Florida," Richardson said. "If you look at affordability studies, in Pinellas County we have some of the most affordable housing in all of Florida. As long as we stay within the range of what's affordable, I think you'll see price appreciation.
"When the market got in the bubble stage . . . we got prices that were beyond the affordability of the wage earners. There was inevitably going to be an adjustment to that market."
Tim Wilmath, director of valuation for the Hillsborough County Property Appraiser's Office, said that slow, single-digit annual growth since 2012 has helped heal a housing market once flooded by foreclosures.
Now, he said, a more manageable number of homes are for sale, pulling down the supply, which also had positive effects. In May 2007, for example, Hillsborough had approximately 22,000 homes on the market. That's a 14-month supply, making those homes a long-shot to sell.
Today there are about 5,000 homes on the market, a three- month supply. Wilmath called that "a normal market" that allows sellers to hold firm on their asking prices.
"All these things are tied together," he said. "Buyers aren't out there rapidly buying and flipping homes. The builders don't see that demand. . . They're building as needed. That's what's keeping these appreciation rates in check to a reasonable level."
Contact Tracey McManus at firstname.lastname@example.org or (727) 445-4151. Follow @TroMcManus.