Comparison of 2017 Tax Values in Downtown Sarasota Condominiums

An Overview of the Florida Property Taxes

About this time every year, the County Property Appraisers in Florida wrap up their property valuations for the year. In Florida, the valuation date is always the first day of the calendar year. So, in this most recent valuation, the valuation date is January 1, 2017.  Many of my clients often ask if the tax value of a piece of property represents anything close to fair value. The answer is it probably never does and really shouldn’t. Here’s why:

  1. First, there are three values the Property Appraisers calculate each year – Just Value, Assessed Value, and Taxable Value. Just Value is supposed to represent market value. The Assessed Value reflects the cumulative effect of all the “Florida Save Our Homes” benefits that have accrued to the homeowner. The Assessed Value less any exemptions (most commonly, the homestead exemption) becomes Taxable Value. Taxable Value multiplied times your millage rate plus any non-ad valorem taxes becomes your property tax. The only value that ever has any relation to the real market value is Just Value. You cannot impute Just Value from the amount of the property tax; or solely from the amount of the property tax.
  2. Second, as should be obvious from the opening paragraph, the values are for January 1 of the tax year but aren’t published until near the end of that same year. Even though Just Value is an estimate of market value, Just Value is static- it is only updated once per year. Because the valuations are almost a year old by the time they are released, Just Values are, on average, 18 months old. In a market that is moving, Just Values are too stale to have much meaning.

The fact that Just Value is rarely equal to the market value of the property on any day doesn’t mean the valuation was wrong or inaccurate on the valuation date. I don’t know that Just Value is any worse of an estimate of value than the values you see on Zillow or anywhere else where properties values are determined through mass appraisal techniques. The values are just stale.  If you assume the valuations are accurate as of each January 1, then the difference between the Just Value across years must be a fair representation of appreciation.

The data for the information below comes are from Sarasota County property tax records as compiled by Corelogic/Realist. The values are the Just Values for the periods and properties indicated.

2017 Downtown Sarasota Property Tax Just Values by Condominium

2017 Downtown Sarasota Property Tax Just Values by Condominium –Click to open pdf

2017 Property Tax Highlights for Downtown Sarasota Condominiums

  • The group of 41 buildings in the report amounts to $1.7 billion in Just Value, which represents a 6% increase over the 2016 valuation. The 2016 figures were up 8% over 2015.
  • The building with the highest per unit value is Grand Riviera on Golden Gate Pointe. The average residence is valued at $2.5M.
  • The Tower Residences is right behind at $2.4M per residence. With 80 residences in the building, The Tower Residences is the highest valued building downtown at almost $194M. No other building is even close. The 204 residences in Alinari give it second place at about $87M.
  • Last year, the most appreciated area was Golden Gate Point, where over half the buildings experienced double digit increases in their appreciation rate. The average increase was 13%. This year, Golden Gate came in at healthy 9%, but that was only good enough for second place. On Sunset Drive, directly across Gulfstream from Golden Gate Point, the value of the average residence increased 10%.
  • Majestic Bay is the only building that has experienced a double digit increase in the past 3 years. Owners here have seen their Just Value increase from $1,040k to $1,711k, or about 64%, since the 2014 valuation.
  • A shout out to the residents in One Watergate- the work you did on your building looks great. I can see I wasn’t the only one that felt this way. The Property Appraiser also took note and “rewarded” you with a 9% increase in Just Value (about 4 times the average along Gulfstream) or about $40k per residence.
  • The area I have labeled central downtown, which is comprised 100% of buildings constructed during the previous generation of construction, is lagging the most. Over the past 3 years, the JV has increased only 13% cumulatively.
  • In 2014, there were 325 residences in these 41 buildings valued at more than $1M (13.7% of all residences in the 41 buildings). By the start of 2017, 428 units were valued over 1M or 18% of the total. The increase in $2M residences was more pronounced – more than doubling from 51 (2.2% of total) in 2014 to 121 (5.1%) in 2017.
  • If you are on the fence between buying a $500,000 condo and a $1,000,000 one, buy the more expensive one. Residences with Just Values over $1 million in 2014 have increased in value by 28% as of the 2017 valuation. Those under $1 million in 2014 have increased only 22% as of 2017.

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