Residential real estate is still going string; commercial real estate not so much.
Harold Briley, an Adams, Cameron and Co. real estate agent, chaired an online webinar, “Volusia Real Estate Values Forum 2020,” Friday, June 5, featuring Volusia County Property Appraiser Larry Bartlett.
“The pandemic is affecting different types of property differently” Mr. Bartlett said. “It’s not really affecting residential real estate. It’s a sellers’ market. But if you switch it over to commercial properties, I think it’s had a great effect. Oceanfront hotels have had zero income for a while, and restaurants and bars are feeling the heat of lost business. Their employees have been laid off. Whether they are going to be able to come back or not is an open question. So, I think the difference is residential is doing OK, commercial is not.”
Mr. Bartlett expressed confidence in Volusia’s ability to come back strong.
“Volusia County is uniquely situated to survive this current natural disaster, because of the benefits we have in this county,” he said. “Unlike many places, people are going to want to move here, to live here, have a business here. Those factors will help us get out of this quicker than most places in the country.”
The forum included a slide presentation showing that this year there was an increase of 40.3% in new construction from 2019, particularly in Daytona Beach and New Smyrna Beach. Residential property accounts for 67.7% of taxable value. Countywide there is an 8.7% taxable value increase from 2019. The 2020 tax roll is based on the 2019 real estate market.
Additional slides showed models vary in terms of Covid-19 recovery time, anywhere from one to three years. Hotels and motels comprise $611,492,520 of county taxable value with oceanfront hotels making up 67% of the value. HVS (Global Hospitality Services) anticipates a 27% drop in hotel values for 2020, with an increase of 15% the following year with a full recovery most likely in 2023.
Mr. Bartlett said, “We set a new record for just value in Volusia County this year, $63.8 billion.”
He outlined why the housing market may weather the coronavirus impact better than the Great Recession by citing research by Economist Mark Fleming showing the housing market is not overvalued, the housing market is under built and equity is at historical highs.
Unlike 2008, “this time housing is a casualty of a public health crisis turned economic, not the cause of an economic crisis,” according to Mr. Fleming. An April 6 Economic Pulse Survey by the National Association of Realtors showed, “72% of Realtors don’t think sellers will lower prices. Of those that do, it won’t be much (less than 5%).”
Mr. Bartlett stated coronavirus relief funds exist that include mortgage help, rental help, and business loans and grants. Volusia has qualified for $96.5 million in federal funding.
“We as property appraisers have to base values on what the market is telling us, so we don’t know what the market will be telling us when we get to Jan. 1 2021,” he said. “Who knows what’s going to happen? We’re dealing with something that’s never happened before, at least in the last 100 years. It just seems to me, if anyplace has the potential for recovering the quickest, it would be Volusia County. But we’ll have to take a wait and see attitude.”
He added, “Taxes pay for civilization. They pay for roads and sidewalks and police and fire protection. The county needs to get those taxes paid and if people can’t or won’t pay them on time, others are given the opportunity to pay those taxes for them. They (could potentially) get a deed to your property if you don’t reimburse them for the taxes they paid on your behalf.”
Sponsors for the forum included LTG, Gulfstream Design Group and Dredging & Marine Consultants. The program was co-presented by the Volusia County Association for Responsible Development Daytona Regional Chamber, Daytona Beach Area Realtors Association and the Lodging & Hospitality Association of Volusia County.