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Port St. Lucie - Sebastian - Vero Beach St. Lucie, Martin, and Indian River counties (Treasure Coast)
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Old 07-26-2006, 07:20 AM
 
94 posts, read 418,489 times
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and for my assumption that prices would continue to accelerate at the same rate and reach $1.5 Million is NOT faulty logic. If you read what I say you will have to agree. I say if the same rate of increase continued a 200K home today would be 1.5 M in 10 years. It is simple math what is faulty logic here. I am not suggesting prices should increase 20% a year as it has been in the last 5 years. I am actually trying to wake those people who believe that 20% increase per year is normal. It is not NORMAL. Inflation has been around 3% per year, interest rates were low, wages did not go up as much, why the heck RE has to go up 20% every year, please explain to me? so ar I have not heard single solid argument about it, besides hype. When the RE was going up media was not the problem

Last edited by josephhawkinson; 07-26-2006 at 07:30 AM..
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Old 07-26-2006, 07:20 AM
 
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I'm getting more confused than I was before. What's the real deal on Port St. Lucie...good or bad place to relocate...anyone?
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Old 07-26-2006, 08:01 AM
 
94 posts, read 418,489 times
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I am not badmouthing Port St Lucie. It is a nice place as far as I know. It is just not the right time to buy now. When the prices correct, in a year, may be a better time. If you are going to live there then in the long run RE is always a good investment. Just do not try to buy when prices are falling.
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Old 07-26-2006, 08:04 AM
 
Location: Port St. Lucie and Okeechobee, FL
1,307 posts, read 5,504,583 times
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Quote:
Originally Posted by josephhawkinson
......if the same rate of increase continued a 200K home today would be 1.5 M in 10 years. It is simple math...
Your math is correct, it is your thesis that has faulty logic. There is no reason to assume that the rate of increase would continue in a linear manner for 10 years, and plenty of experience to indicate that it would not.

But, even if it did, what is your point? It would simply indicate a super-heated inflationary market and could only occur if the rest of the economy was following the same path. In that case, it wouldn't matter. If you are suggesting that such a rate of increase could be sustained in an isolated city, that's where I say your logic is faulty. And, if your assumption is so flawed, what was the point of it?

That was one of the primary reasons for my grumpiness -- that you would apply such a silly idea to try to prove me wrong. Why were you trying to prove me wrong in the first place? Did you get up on the wrong side of bed that day?
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Old 07-26-2006, 08:10 AM
 
Location: Port St. Lucie and Okeechobee, FL
1,307 posts, read 5,504,583 times
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Quote:
Originally Posted by josephhawkinson
I am not badmouthing Port St Lucie. It is a nice place as far as I know. It is just not the right time to buy now. When the prices correct, in a year, may be a better time. If you are going to live there then in the long run RE is always a good investment. Just do not try to buy when prices are falling.
Prices are declining everywhere in Florida, not just Port St. Lucie. And, there is significant evidence that the correction will be softer in PSL that elsewhere simply because the demand continues so high. People are still flooding into PSl from Dade and Broward Counties precise because they can stay in South Florida and get more for their money.

If the correction is soft and short in PSL, now might be precisely the time to buy. A year from now might be too late. There is no way to know. It's impossible to time the market.

What about people who cannot wait? What is your advice for them?
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Old 07-26-2006, 08:29 AM
 
Location: Port St. Lucie and Okeechobee, FL
1,307 posts, read 5,504,583 times
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Quote:
Originally Posted by LHBR702
I'm getting more confused than I was before. What's the real deal on Port St. Lucie...good or bad place to relocate...anyone?
Nobody can tell you, you'll have to decide that for yourself. I spent a fair amount of time giving you my experience over the last 34 years. It's been a great place to live, a great place to raise my kids, a great place to make friends, and I can't imagine anywhere else I'd rather have lived during that period of my life. Now that I'm retired and have the time and means to play with some land, I'm moving to the country, which also happens to be next door to my young grandchildren.

The facts say that it has a better housing market than many other places in South Florida, and it has all the mimimum stuff for a good life -- parks, shopping, schonls, etc. etc. Depending on what you do, if you need a specific kind of job it might be tough to find one. Port St. Lucie is primarily a bedroom community. The Powers-That-Be are trying to change that, but their efforts are far from complete.

If it was me, I'd look to see what kind of job I could get. If yu have that locked up, then I'd try to decide what kind of housing you like. If you're looking for a ranchette, you're looking in the wrong place. Some time back, someone asked about having horses in PSL. Not going to happen -- the entire city is on quarter acre lots (actually slightly smaller) For a long time, there were no condos, town houses, villas or apartments in PSL, either, but that has changed in recent years. Today, you can find anything from a $150K fixer-upper to a $7 Milllion "cottage".

Just remember a couple of other important facts. (1) This is one of the fastest growing cities in the nation. Sometimes the city fathers have trouble keeping up with that growth, and traffic can be a problem -- but not as much as further South. (2) Port St. Lucie has the second largest land area of any city in Florida -- 115 square miles -- only Jacksonville is larger in land area, and that's because the city is also the entire county. It's hard to get a handle on the scale of this place.

There are a couple of other things I missed in the beginning. There are no slums -- which is amazing for a city this size. You might find the occasional run down house, but there are no bad neighborhoods. There is also no ethnic division. This is a true "equal opportunity" city, and you will find a greater variety of people living in any neighborhood in the city than you will, in most other cities. Both of these are because it is such a new city; the vast majority was constructed in the past 20 years, and equal opportunity housing was strictly enforced. If you're a bigot, this is no place for you.
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Old 07-26-2006, 08:42 AM
 
291 posts, read 1,113,895 times
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Thank you, PSL! I found the information you just shared to be extremely helpful. I realize, as others have mentioned, that housing prices have risen, but believe me that is happening everywhere. The reason we want to move out of NJ is because housing prices have gotten so out of control AND we don't love it here enough to want to pay them. If you like where you live, you take the good with the bad. One more thing... I keep reading about how "outrageous" the cost of homeowner's insurance and property taxes are. What's "outrageous"? Can you give me an example? Thanks again!
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Old 07-26-2006, 09:38 AM
 
Location: Port St. Lucie and Okeechobee, FL
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Sure. Taxes are easy. When you buy your house, it will be reassessed and a n ew market value will be set for it loosely based on what you paid but more realistically in comparison to other similar homes. The tax assessment is supposed to be based on market value, but in reality will be a little lower -- usually somewhere around 60% to 80% of market.

Once in your house, you'll file (at the beginning of the next year) for a homestead exemption. You can only have one of those, and only if you own the house and are a Florida resident. That will eliminate the first $25K of value from your tax assessment. There are some additional exemptions for special circumstances but most people don't qualify.

From that point on, unless you make a major addition to the house, any increases in the assessment are limited to 3% maximum per year by state law. Your taxes could go up by more than 3% if you get a reassessment in the same year that millage rate is increased, but it still is generally less than what the increase could be without the cap (This is true for all of Florida, not just Port St. Lucie).

Now, in Port St. Lucie, the tax base is growing so rapidly that the millage rate is seldom increased and may even be lowered. Each year, when the property appraiser announces the new tax base, people throw parties to celebrate (OK, a little exaggeration ). But, the city fathers sure do celebrate -- thay have all that new money to spend!

This year, the county is proposing the largest reduction of millage rates in their history. Here is part of the report from the county:
Quote:
Fort Pierce – July 10, 2006 – The St. Lucie County Board of County Commissioners will vote Tuesday, July 11 on a proposed millage decrease of .6112 mills in the unincorporated area and .6471 mills in the municipalities. If approved it will be the largest millage decrease in recent history.

The St. Lucie County Board of County Commissioners wrapped up their budget review sessions Monday afternoon with a proposed 9 percent millage decrease countywide. The total dollar amount going back to the taxpayers of St. Lucie County is estimated to be $13,054,300.

This millage deduction would result in a savings of $145.59 in the incorporated area and $137.52 in the unincorporated area for a house valued at $250,000 with a $25,000 Homestead Exemption. Homeowners with a Homestead Exemption will receive a 3% increase in property values as established by the State; however with this proposed millage reduction, they would receive a 6% net reduction in their County property taxes.
Your taxes will cover county government, the sheriff's department, the county-wide fire and paramedic department, the school system (county-wide but separate from the county government), the South Florida Water Management District (flood control), and the city taxes. There may be a couple of other small ones I forgot, I didn't bother to look them up.

The city portion will include city government, public works, the utility department (water and sewer), the police department, parks and recreation, some smaller departments, and possibly a street lighting district if your neighborhood has voted to have one. Believe it or not, the millage rate for all this is not bad relative to the total tax bill, adding only about 4 mills.

The total tax rate this past year for a city resident was about 25 mills, or $25 per thousand. If your assessement is $225,000 and you have homestead, your tax bill would have been about $5,000. My own house has a current market value of about $300K, but I have lived there a number of years. The county has set last year's market value at $138,400, and said that $83,743 is the taxable value. After homestead, net taxable value is $58,743, and my taxes were $1,444 before early payment discounts.

A new buyer should expect that rate to jump considerably after a sale. The state-wide cap is a sneaky way to keep taxes down for long-time residents and have newcomers pay more of the tax bill. Unfortunately, it also catches existing residents if they more or remodel. Many retired folks can 't afford to sell their larger house and get a smaller one, because the taxes on the smaller one would be higher!

In addition, like most areas of Florida, anyone building a new house can expect to pay significant impact fees, assessed by the county, city, school dept, fire dept and others. They total more than $10,000 if I recall correctly; I didn't look them up.
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Old 07-26-2006, 09:44 AM
 
291 posts, read 1,113,895 times
Reputation: 123
Thanks so much! And lastly, how about homeowner's insurance?
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Old 07-26-2006, 10:23 AM
 
Location: Port St. Lucie and Okeechobee, FL
1,307 posts, read 5,504,583 times
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Homeowner's insurance is a little tougher to analyse. The controlling phrase is, "It depends". It depends on what company you manage to sell you coverage, the size and location of your house, the type of construction, and a whole host of other factors. Best case, you will get a mainline insurance company to sell you coverage on your CBS (concrete block/stucco) house with metal roof and an alram system. Worst case, you can't get coverage from anyone but Citizens's insurance, the company of last resort set up by the state of Florida to make sure everyone can get insurance at some rate. If insurance is unobtainable, the economy of the state comes to a grinding halt!

I'm lucky. I have coverage from a national company with reasonable rates. However, that company is not taking any new policies, and has cancelled about 40,000 policies in the last year because of location or other danger. My rate has gone up about 2-1/2 times in the past 3 years, from roughly $1,000 per year to about $2,600 per year, on a property that has reconstruction costs of around $200,000 (the land makes up the balance, you don't insure the land). It's a CBS house with a 30 year shingle roof (new, after Hurricane Frances).

The rates are increasing everywhere in Florida. There is no area that is exempt. Port St. Lucie is abut in the middle. Nationwide Insurance recently filed for yet another rate increase; they asked for 28% in St. Lucie County, but 99% for Palm Beach County. State-wide, their average rate request was 73%. One county was only 2%.

One important factor is the deductible. Because of the recent hurricanes, the state has permitted insurance companies to increase the deductible for wind damage. While most of you policy might have a deductible of $500, your wind damage deductible can be between 2% and 5% of the insured value. My company uses 2%, so my deductible on $200,000 coverage is $4,000.

As an example, my damage from Hurricane Frances was approximately $18,000. Most of that, about $10,000, was because the wind blew most of the shingles off my roof. The rest of my damage was screen replacement for my pool enclosure, fence repairs, and carpet replacement from water that was blown in around the windows. My replacement value was lower then, so I paid the first $3,000 and the insurance paid the rest.

Three weeks later, we were hit again with hurricane Jeanne. The damage was almost insignificant because everything that could be blown down had already been blown down by Frances. I got nothing from the insurance company. One year after that, we were hit by Wilma. My roof was new and received no damage. My pool enclosure lost one aluminum beam. I had some soffit blow off. My total damages were about $3,000 and I paid it all. For this privilege, I pay $2,600 per year to the insurance company, and I'm lucky -- some people are paying $5K or $6K or more. If I ever drop my policy with Nationwide, I'll never be able to get back on with them. Some people have deductibles of 5% -- or $10,000 on a $200,000 home.

My new house in Okeechobee will be constructed with all of the latest hurricane-proof methods and materials and will be 50 miles inland. Hurricanes Ivan, Frances, Jeanne and Wilma caused damage in Okeechobee, but at a lesser rate than on the coast (mostly roofs and trees blown down). I will not have a mortgage, so there will be no bank insisting I have coverage. The house will be about $300K, so my deductible will be at least $6,000. I will be looking for a policy that covers fire, theft and liability, and I will waive wind damage coverage. Such a policy will be hard to find, but I'm willing to take a chance. I can afford most repairs from the savings by not paying the premium. I can't afford a total loss, but I see the risk as almost negligible.

One addtional factor regarding insurance; flod insurance is not covered by homeowners insurance. Flood insurance is sold by the Federal government. If your house is located in a flood zone and you have a mortgage, your mortgage holder will require you to buy it. However, it will only cover the first $250,000 of damage from a flood. If you have a $500K home and it is wiped off the foundation like the Katrina house in Mississippi, you will be self-insured after $250K.

The bottom line is that when you make an offer on a particular house, you should probably add an insurance contingency. It's already common practice to make a constract contingent on getting financing or on the results of various inspections. Just add a phrase that the contract is contingent on being able to obtain homeowners insurance at some agreed-upon rate, possibly from a mainline company. You can't make it too restrictive or the seller will not agree. Then, shop the house for insurance and back out if you can't get an acceptable policy.
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