Appraiser likes 5.9% growth as county awaits impact of pandemic
By Mary Hladky
The taxable value of Palm Beach County properties has increased for the ninth year in a row, although the rate of growth continued a multiyear trend of slowing down.
The numbers, however, do not reflect any impact from the coronavirus pandemic since they are based on market conditions as of Jan. 1.
Countywide taxable property values jumped 5.9% from 2019 to 2020, down from last year’s 6.2%, according to the 2020 preliminary tax roll that the Palm Beach County Property Appraiser’s Office submitted to the state.
The total taxable value of countywide properties is $210.3 billion, up from $198.9 billion last year.
The total market value of countywide properties increased to $288.6 billion from $277.6 billion in 2019.
New construction added to the tax rolls totaled $3 billion, up from $2.6 billion in 2019.
The taxable value rise “is very healthy,” said Property Appraiser Dorothy Jacks. “It is not too high and not too low.”
It is too early to predict what impact COVID-19 will have on next year’s values, Jacks said, but she expects hotels, non-essential retail and restaurants will take a hit.
“A lot of that property is a tenant-landlord relationship,” she said. “If tenants don’t return, or tenants ask for some dispensation from their rent for a period of time, all that impacts the owner’s income. Their income will be reduced.”
As of mid-June, she had not seen an impact on the residential market. “But what it will be over the next six months is the real rub. We are just not sure if there is going to be a larger recession that will cause a decline in residential.”
So far, signs are hopeful.
Lots of Realtors report people from New York and the surrounds are looking, maybe making decisions to move up retirement, or work from home. A lot of people have ties to this area. They may choose to move on their plans sooner rather than later. That helps the market, Jacks said.
Since 70% of the county’s taxable value comes from residential, a solid residential market would offset commercial market losses, she said.
Despite the pandemic, the Palm Beach County median home sales price was holding steady at $365,000 as of May, Jarrod Lowe, president of the Broward, Palm Beaches and St. Lucie Realtors, announced on June 22.
That’s virtually the same as last year. Yet the median sale price usually increases year over year. Last year’s increase was 3.1%.
But Lowe was upbeat.
“Most would assume that the market would be derailed after the past few months, but this just goes to show how resilient our county is,” he said. “If you are looking to sell, there are also fewer competing properties right now and fewer days on market.”
Closed sales decreased by 47% because many closings were postponed due to the coronavirus, he said, adding that he expects to see the market begin to normalize this summer.
Like last year, new apartment complexes, hotels and warehouses bolstered the rise in new construction.
Boca Raton’s taxable property value, which increased $1.1 billion from last year’s $25 billion, continues to outpace every other city in the county. The city’s value rate was up 4.75%, compared with 4.9% last year.
“We are continuing to see robust investment and steady growth in our assessed values,” Mayor Scott Singer said in an email. “Even with the COVID-19 downturn, residential properties are selling briskly and we are seeing even more interest from people and companies from other states.”
Delray Beach’s taxable value jumped 7.6%, up from last year’s 6.6%. Boynton Beach’s value increased by 6.8%, down from 7.4% in 2019.
Delray Beach added $225.6 million in new construction to its tax roll, narrowly besting Boca Raton’s $223.7 million.
High-value redevelopment projects in the city’s eastern communities and downtown added to the tax roll, said Anthea Gianniotes, Delray Beach’s development services director.
“We are growing like crazy,” she said. “A lot of this is a realization of a lot of the hard work that went into revitalizing our downtown over the last 20 years. We have created a beautiful downtown.”
Gianniotes said next year’s new construction numbers would be strong as well, as the iPic theater building, Ray Hotel and portions of the Atlantic Crossing project will be added to the tax roll.
The overall taxable value percentage growth leader in south Palm Beach County was South Palm Beach, which jumped a whopping 21.7%.
Town Manager Robert Kellogg attributed that to the addition to the tax roll of 3550 South Ocean, a seven-story oceanfront luxury condo, as well as a new single-family home on the ocean.
That’s a one-year boon for the town, as Kellogg said he does not expect any new construction to take place in the foreseeable future.
Property values increased by 11.1% in Briny Breezes, 2.8% in Gulf Stream, 2.5% in Highland Beach, 6.8% in Lantana, 1.5% in Manalapan, and 4.8% in Ocean Ridge.
The largest Boca Raton projects added to the tax roll this year were a new $57 million headquarters for prison and immigrant detention center operator GEO Group at 4955 Technology Way, new construction at Cade Boca Raton apartments at 950 Broken Sound Parkway NW, and a six-bedroom, nine-bathroom mansion at 1160 Royal Palm Way.
Delray Beach’s largest were the 66-condo 111 First Delray Beach at 111 SE First Ave., the Aloft Hotel at 202 SE Fifth Ave., and a Courtyard Marriott at 135 SE Sixth Ave.
Boynton Beach’s biggest were the 324-unit Pacifica apartment complex at 1080 Audace Ave., The Club at Boynton Beach assisted living facility at 623 S. Federal Highway, and an Aldi supermarket at 3452 W. Boynton Beach Blvd.
Local governments use the taxable value numbers to calculate how much property tax money they can expect in the coming year so they can set their annual budgets and 2020-2021 tax rates.
The overall increase in taxable values was welcome news for municipal leaders since a decline would have meant less tax revenue coming in and forced difficult budget decisions.
But as the coronavirus pandemic continues, cities will see a decrease in other expected income, including sales tax revenue. As of late June, it was not yet clear how big those losses would be.
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