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Broward County June 1st, 2023 Estimated Market Value Breakdown
This time each year, each property appraiser in Florida provides a glance into what the estimated Market, Assessed, and Taxable values are for property located in their county. The Property Appraisers across the State of Florida are tasked annually with estimating the Fair Market Value for all the Real Estate Parcels and Tangible Personal Property Accounts located within their respective jurisdictions. Last week, the Broward County Property Appraiser’s Office submitted their June 1st Estimate of Taxable Values to the taxing authorities located within Broward County. These values represent the “Working Values” and are subject to change until the TRIM or Value Notices are sent out in mid-August 2023.
After reviewing the data, it is evident that the property appraiser is continuing last year’s trend of significantly increasing values. Now remember, the property appraiser is valuing properties as of January 1st of each year, utilizing the prior 12 months of data to produce their opinions of value. For the 2023 tax year, that valuation date is January 1, 2023, using data from calendar year 2022. The beginning of last year reflected on the 2022 market which has proven itself to be resilient in the ever-changing world of increasing interest rates and debt securitization. As seen in the below graph, nearly every asset type saw value increases higher than last year, on a percentage basis.
Residential property (Single Family/ Mobile homes) led the way with some of the largest increases over the 2022 values, with increases showing ~24% and ~30%, respectively. This is a direct reflection of the hot housing market and significant population growth our area has seen over the last 2-3 years in both new construction and existing home sales. Multifamily properties greater than 9 units show an average value increase of about 15%, which is lower than last year’s increase of about 23%. This trend exemplifies the soaring price of housing in Broward County and ever-increasing cost of living in South Florida. In a stark contrast to 2022, Vacant commercial land values are up nearly 50%, compared to an increase of only 6% in 2022. Land values have often lagged the broader commercial market, and this is an indication that the Property Appraiser’s Office is playing an aggressive game of catch up. Industrial assessments also continued to creep up, with an annual increase of 13.51%; higher than 2022’s year-over-year increase of 9.32%. Overall, the total Fair Market Value of all real property within Broward County increased 19.57% from 2022 to 2023 as compared to 13.86% from 2021 to 2022.
One thing to keep in mind is that hidden in this data is the addition of new construction to the tax roll for 2023. Any projects that were completed during 2022 are now included in these 2023 estimated Fair Market Values. These increases in value are occurring in the face of pressure from rising interest rates, skyrocketing insurance costs and decreased sales volume. According to data from CoStar 1Q 2023 Market reports, sales volume for commercial properties in Broward County dropped significantly from 2021 to 2022. In 2021, there were 430 reported office transactions and just 324 in 2022; a drop of 24%. Similarly, there were 333 reported Apartment sales in 2021 compared to 277 in 2022; a decrease of ~17%. Retail also saw a 17% drop in sales volume; down to 459 sales in 2022 from 554 sales in 2021. The strongest of the asset classes in terms of sales volume was Industrial with only an 8% drop in sales volume from 2021 to 2022.
As shown in the below chart, the red line indicates the percentage change in value from 2021 to 2022, while the light blue line represents the percentage change in value from 2022 to 2023. Based on this data, the market continues to surpass 2021-2022 highs and continues to soar into unprecedented value territories. Given the current debt environment and the effects it is having on acquisitions and development, it will be interesting to see where the rest of 2023 takes us and how the 2024 values will compare to the elevated valuations we are seeing in 2023.
There are many factors to consider when reviewing this generalized data; the type of properties that are included in each general use code, the locations, the ages and much more. What is presented in the above chart and grid, is the aggregation of all real property parcels categorized as a specific use code per the Department of Revenue guidelines for assessing real property in the state of Florida. This data is very useful to provide an overview of the health of the Broward County real estate market as of 1/1/2023 for each of the major general property types (use codes), however, a breakdown of the commercial properties would be needed to truly analyze the changes in value for specific property types e.g., Retail Centers, Office Buildings or Restaurants, etc.
On a more granular level, how does the Property Appraiser’s Office arrive at the Fair Market Value for each parcel that makes up this data?
Each year, with a valuation date of January 1st, the property appraiser examines and analyzes the state of the market for all property types. They will review income and expense information for income producing properties, analyze current construction costs and review and analyze the sales of comparable properties that have taken place in the prior calendar year. All this information is input into their Computer Assisted Mass Appraisal (CAMA) system and is used to assist the property appraiser’s highly skilled residential and commercial appraisers in valuing each real property parcel. Certainly, no easy task. Especially considering the type of market that we have been experiencing over the last 18+ months.
While the Property Appraiser’s Office is highly skilled in their annual valuation process, mass appraisal is not perfect, nor should it be expected to be perfect when valuing over 750,000 real property parcels. With property values on the rise, this is where it becomes imperative to have a skilled property tax consulting firm assisting with the review of your annual Fair Market Values to ensure values are fair and equitable.
The amount you will pay in property taxes during 2023 is directly based on the County’s opinion of the Fair Market and Assessed Value for your property. The Property Appraiser’s Office is in the process of finalizing their 2023 Fair Market Values now with their “Working Values” being shown on their website. If you feel the value of your property is too high or just wish to have an independent review, we encourage you to call Nick Mau at (954) 906-8066. You may also email Nick at n.mau@first-pointe.com.
FirstPointe Advisors, LLC is a full-service ad valorem tax service provider. We provide you with the experience of a national firm with a regional focus. At FirstPointe Advisors, LLC, you come first. We strive to provide innovative solutions to your property tax needs. With our experience and first-class client service, we will create an easy review and appeal process for you. Our experience spans across Florida’s 67 counties in representing owners of residential and commercial properties.
