Whytheheck am I still in South Florida?

MyMac Magazine’s own John Nemo asked me to blog about this insane topic…

Why am I still in S. Florida? Beats the c**p out of me!

My family moved here when I was 4, after my father died. This is where my mother met and married Guy Serle‘s father. I attended the laughable local schools, and after high school, did nine years in the Air Force. Then I came back…first because I had a job offer, and second, my parents were still in Fort Lauderdale, which helped my transition to civilian life. Once I got my job, I was pretty much stuck. I’ve been with my employer, a major manufacturer of consumer electronics and other stuff, for 26 years, and as long as I have a job here, I’m stuck here–yeah, it’s this or Chicago. Another more recent reason I’m stuck here is because of the wacky S. Florida housing market. I bought my townhouse in 1994 for $64,000. By 2005, when housing pricing went completely nutso, other townhouses in my community were selling in the $240s and $250s. In 2006, I thought I was being real smart by taking only a small amount of equity out of my house, raising my mortgage to $125,000. In these last two years, much has changed–especially down here. Other than Las Vegas and Southern California, South Florida has experienced the biggest drop in home prices, and one of the highest foreclosure rates in the country. Yay! We’re number one!

Zillow.com, while not entirely accurate, gives one a good idea of what one’s home is worth. According to Zillow, my place is now worth about $155,000, a paper loss of nearly $100,000. Worse yet is that two units in my community are currently for sale for $100,000 and $105,000 respectively (those are the ones I know about…). Both have been on the market at that fire sale price for over three months with no sale. Mind you, I don’t know what condition they are in, but if those prices are indicative of what pricing is going to be in my community for the foreseeable future, I’m really stuck and really upside-down. This is just my story–multiply that by a few million…

As long as any storm hitting here doesn’t exceed Category 4 or lower, I’m probably in pretty good shape. One of the big things I invested $7,000 of that “re-fi” money for accordion-style hurricane shutters. With this type of shutter, I can button up my whole house in about 20 minutes. Also, after Hurricane Frances in 2004, my homeowner’s association replaced every roof in the community (almost 40% were destroyed in that storm) at the cost of several million dollars (that loan was just paid off a few months ago), with roofs from a highly reputable roofer (believe me, many are anything but reputable down here), that were carefully inspected by an independent inspection company and homeowner’s association staff.

I want to believe the pricing situation is only temporary. This is a family community–all the townhouses have three bedrooms, and are ideal for an extended family, with a full bedroom and full bath downstairs, for grandma or whomever, so they don’t have to deal with the stairs. It’s also good for retirees who can move downstairs when health issues dictate it. Palm Beach County is slated for a lot of growth in the biotech field, which should attract many new homebuyers over the next 5-10 years.

The only thing that will hurt the housing recovery are the high taxes down here. I’ll try to explain the crazy quilt taxing system in place down here. Wish me luck. Florida does not have an income tax. The state budget is dependent upon the sales tax. Local communities depend upon property taxes for their operating budgets. Basically, housing prices were very low and very stable for so long that the tax rates were set fairly high. When the property values jumped up by a factor of two or three starting in the early 2000s, so did the taxes–except for those who live here permanently and for whom their homes are their primary residence. Those folks’ home appraisals were frozen when the “save our homes” law passed in the early 1990s. Appraisals for those homes (such as mine) cannot be increased more than 3% a year, so my taxes are artificially low (under $900 a year). My next door neighbor, who bought at the peak of the market, is paying about $3,500 a year for an identical home. Some new property tax laws came into play last year, but the provisions are so confusing that I’m keeping what I have (there is a grandfather clause that permits folks like myself to keep the existing system).

I’m looking at the map right now. This evening, there are three named storms, two storm systems that will probably not develop into anything, and one off the coast of Africa that will probably turn into another hurricane. They say August and September are the busiest months, but I don’t remember them ever being as busy as this season. New Orleans got Gustav, we will likely get a glancing blow from Hanna, and now there’s tropical storm Ike, and yet another weather system off the coast of Africa that will likely become another big storm.

Let’s chat about hurricanes for a few minutes… If you choose to live anywhere along the eastern US coast, you are subject to the devastating effects of a hurricane. All you can really hope for is that your home is well-constructed and that you have shutters or other devices to protect the openings in your home. Escape? Hah! Florida is a long and skinny state. On the east coast, there are two expressways that go north, I-95 and Florida’s Turnpike. If a major coastal evacuation is ordered, these two highways (as well as the surface streets like US1) will become instant parking lots. Imagine the logistics of moving somewhere between three and four million people on two highways, and to get to anywhere in the interior of the US, you will need to drive at least 450-500 miles–probably a lot more because the close-by places will be filled very quickly. Yeah, that’s what we have to look forward to if a Category 5 storm (like 1993’s Andrew) comes this way. If it had moved one or two degrees further north, Miami Beach and downtown Miami would have seen destruction of epic proportions.

Oh, did I mention homeowner’s insurance? Well, if you don’t have it, you are going to find it difficult to impossible to buy it. The big insurance companies have cancelled hundreds of thousands of policies, and for those who have insurance, they can count on annual increases of anywhere from 20 to 50%. Every year. And you just grit your teeth and express your gratitude for not having your policy cancelled. The insurance situation is so bad here that the State of Florida has had to be come an insurer of last resort, for all those people who could not otherwise get insurance.

Then there are the bugs. If it isn’t giant mud daubers (really big wasps) putting nests right over your front door, or working their way through your sliding glass door tracks to put their nests inside your home, it’s the palmetto bug, which is Florida’s state dog. These things are huge, disgusting, and they can fly! Thank goodness my cats enjoy hunting them down. Fire ants can strip the flesh off of small animals in hours, and the mosquitoes will carry you away.

A little sidebar is in order here… When I was a kid, during mosquito season, the City of Oakland Park sent out these fog trucks into the neighborhoods to deal with those buzzy devils. I can remember running and playing in the fog with my sister Nancy and brother Guy, not knowing (or caring) it was pure DDT (a long-banned insecticide).

Finally, if it weren’t for the miracle of air conditioning, S. Florida would still be a distant outpost, populated by hardy folks capable of dealing with humidity so high that I swear I grow gills every summer. There isn’t time or disk space to go into some of the other things that make like in S. Florida so interesting…like the fact that we’re out of water. Like the completely corrupt state legislature, not to mention the corrupt local government agencies. Like walking into a business and not being able to find anyone who speaks English. Heck, that goes on in my own office! Oh, and the schools are rated among the lowest in the country. Why? The retiree taxpayers put their kids through school “up north” (translation: New York), and don’t want to pay for these snot-nosed Florida kids’ education.

Yeah, South Florida is an interesting place. From late October to late March, the weather is near-idyllic, but even that doesn’t really matter to me. Personally, I don’t even like the outdoors! I don’t go to the beach (that’s for tourists), I don’t go boating, I don’t go hiking. Heck, the last time I went to the beach, my Nordic complexion blinded half of the folks, and the other half tried to push me back into the ocean, chanting “Live! Live!” I suppose I’d leave if I could, but at present, I’m trapped with a house that’s possibly upside down, and trapped (in a nice way, I guess) with a job I’ve had for 26 years. I can assure you, dear readers, that when I retire, when my house is again right-side-up, or when I hit the lottery, I will be out of here as fast as my little legs can carry me.