Indian River County property values continued upward at a surprising pace in 2023. Even though the year did not have the boomtown feel of the two prior years, taxable values rose substantially in every town, city and taxing district, with Indian River Shores leading the way.
According to the annual June 1 estimates released by county property appraiser Wesley Davis, real estate in the island community jumped 12.6 percent in value during 2023 and was worth almost $600 million more on Jan. 1, 2024, than a year earlier.
“There was still a raging market at the high end on the island and there was a fair amount of new construction that contributed to the increase,” Davis told Vero Beach 32963.
“The nature of the town itself and its demographic insulates it from a lot of external factors and keeps property values strong and resilient,” said Indian River Shores town manager James Harpring.
“It is a beautiful community that shares the ocean and the river and has its own public safety department, which is a big draw for buyers. People who are considering buying here look at the way the town is set up and say, ‘I could have a less than two-minute response time if I need help.’ That can be a decisive factor.”
Indian River Shores has a low tax rate compared to most other county municipalities, collecting $1.33 per thousand dollars in real estate value, which amounts to about $1,330 in town property taxes on a $1 million home.
Residents also pay property tax to the county, the School Board, the Hospital District, the Mosquito Control District, St. Johns River Water Management District and other entities, pushing the total property tax bill for a $1-million home well over $10,000.
Deputy town manager and treasurer Heather Christmas said the $600 million in new taxable value will net the town an extra $700,000, raising property tax revenue to approximately $6.7 million. That more than 10-percent increase is a sizable windfall for a small town operating this year on a $10.8-million budget.
Property values were up 10.60 percent in Orchid, the Shores’ north island neighbor.
In the city of Vero Beach, which is split between the island and the mainland, the taxable value of property went up 8.13 percent, a $344 million increase.
Vero Beach finance director Steve Dionne said the increase will bring in about $856,000 in additional revenue compared to last year. Vero has a tax or millage rate of 2.69 and a $33-million operating budget.
Elsewhere on the mainland, property values were up 9.38 percent in Sebastian and 6.83 percent in Fellsmere.
Property taxed to support the county’s general operating fund went up a bracing 9.6 percent in value, which amounts to a $2.54 billion increase. With a 3.54 millage rate, the increase will net the county an extra $8.5 million in revenue, according to County Administrator John Titkanich.
That will be a solid boost to the county’s general fund budget, which was $132 million this year.
Davis publishes tax role estimates at the beginning of June to help the county and municipalities figure out how much money they have to work with as they put their budgets together in July and August. He will put out his final tax role figures in August.
Titkanich said it is not known yet how the county will spend its extra $8.5 million but noted that the “County Commission has adopted goals that involve environment, governance, infrastructure, public safety, and quality of life. These are the priority areas on which the county will focus its resources.
“Please keep in mind, nearly 63 percent of the general fund expenses are related to our constitutional officers, and the Sheriff’s Office budget alone comprises 54.4 percent of the general fund. Just over 20 percent of the general fund is available to fund county operations.”
Fifth District County Commissioner Laura Moss, who represents most of the barrier island, said the Commission will establish funding priorities during the budget process, but noted one major upcoming expense some of the additional revenue could flow toward.
“The state law passed last year requiring us to convert homes and businesses from septic to sewer to protect the Indian River Lagoon with be a monumental undertaking far beyond this extra money, but the money will be helpful,” Moss said. “We have until 2030 to get it done, but still … it will be a big bill. The good thing we have going for us in this process is we no longer have to convince the public that we need to get off septic. There has been a huge shift in public understanding about the need to protect the lagoon over the past 10 years.”
Impressive as they are, the latest numbers from the property appraiser don’t come close to capturing the full magnitude of the jump in real estate values last year.
Much of the actual value of county real estate is veiled in the June 1 estimates by homestead exemptions, the Save Our Homes limit on annual property tax increases, and other programs that protect property owners from rapid tax increases during real estate booms.
For example, Davis’ final numbers for 2022 show a certified taxable value of $26,556,446 for the county but note a much higher “market value” of $45,765,316 – and even that number does not reflect the full value of county real estate.
The county property appraisal process is necessarily backward looking and in a fast-rising market it is difficult to fully capture the value properties that have not changed hands.
For instance, a house on Seahorse Lane in Vero Isles that had a taxable value of $718,000 and an official “market value” of $1,037,000 sold in 2023 for $1,275,000.
A home on Dove Plum Road in John’s Island in Indian River Shores with a taxable value of $1,608,000 and a “market value” of $3,277,000 closed last year for $5,331,000.
Based on ratios like those, this year’s taxable value for the general fund – $29,104,000,000 – represents somewhere between half and two thirds of the actual value of county real estate, which means more than $4 billion in wealth was added to the balance sheets of county property owners in 2023.
Over the past three years, the bellwether general fund taxable value has gone up a solid 45 percent, from just over $20 billion in 2021 to more than $29 billion in 2024. Based on those numbers and the figures that can be drawn from them, at least $15 billion in real estate wealth materialized here since Jan. 1, 2021.
“We clearly been through a tremendous real estate boom over the past three years,” said Davis. “It’s probably something we won’t see again for another generation.”