Longtime area homeowners can't afford to move.

Longtime area homeowners can't afford to move.
Carol Glazer discusses her situation in her new kitchen. Glazer decided to renovate her home in Cape Coral rather than look for another property or build another house.

If you feel trapped in your home in paradise, you're not alone.Fast-rising home prices make it just as difficult to relocate in Southwest Florida as it is to buy a home for the first time."I have been in my Cape Coral home 24 years," said Carol Glazer, who opted for a major renovation over a move.
She couldn't find another house where she wanted to live in Cape Coral that "was enough to my liking to justify in my mind the huge increase in property tax I would have to pay," she said.Longtime homeowners can sell at a great price, but they can't easily afford to buy another home or pay the new property taxes.
Most people couldn't afford to buy the house they already own if they had to buy it at today's market value.Fewer local homeowners can afford the dream of moving up to a place on the water or downsizing once their children are out of the house."You are seeing that less and less now," said Blair Glenn, Wachovia Mortgage bank executive for Florida.
"It used to be just the additional cost of the mortgage that you looked at," Glenn said. "Now, you are going to have multiples of costs associated with that move. Now it's the additional cost of homeowner's insurance, windstorm insurance and your tax increase."Longtime residents who hoped to cash in on their houses as they neared retirement are particularly disappointed.
"I would like to downsize after having lived in this home for 22 years, but would still like to remain in this region," said Sushilla Cherian of Punta Gorda."While I would get an excellent price for my property, I would find it difficult to locate another place at a downsized price," she said.
Florida's Save Our Homes legislation caps the annual increase in the taxable value of residential property at 3 percent per year. To qualify for that protection, homeowners must live in Florida most of the year and file for a homestead exemption. That exemption also knocks $25,000 off the assessed valuation of a home the first year it is claimed — another important tax savings.After being protected from tax increases associated with rising home values, longtime local residents are often shocked at the high tax bill on a new home.
For example, a three-bedroom house with a pool in southeast Cape Coral was purchased for $124,500 in 1996. That year, its assessed value — the base on which its property tax is figured — was set at $101,310. Minus the $25,000 homestead exemption, its base taxable value was $75,810.Through the years, the increase in that taxable value could rise no more than 3 percent a year, even though the actual market value of the house rose steadily.
Today, the same house could sell for around $300,000. Yet, it's 2005 taxable value is $94,530. With Save Our Homes protection, the owner paid $1,920 in taxes in 2005.However, if someone bought that house for $300,000 today and started with a new taxable value, their tax bill would be about $6,000 — triple what the current owner pays.Far from feeling trapped, many people are simply thrilled with the combined increase in market value and protection on taxable value.
"We have no intention of selling and probably never will," said Sis Newberry, who has lived in her house in Estero River Heights for 22 years. "I've watched my friends do it, but it doesn't make sense to me. They have moved to a condo where they have a lesser quality of life and they pay more."Estero has changed so much anyway," she said. "We are happy right where we are. We know we have good value in our home."
Residential sales experts warn that the rapid increase in property values will slow down. But that doesn't mean current market values will fall. Prices here are still in line with, or less than, elsewhere in Florida and similar warm-weather markets nationwide."You are still at or slightly below the hottest waterfront properties in Florida," said Glenn, who is based in Jacksonville. "Among the one or two highest escalation in price all around Florida is Naples and soon after there's Cape Coral and Fort Myers."As an example, he noted that Jacksonville has about 30 miles of riverfront where values have stayed high.
"You can't buy a house in Jacksonville on the river for less than $1.8 million," he said.