Real estate observers tend to focus on home sales price increases, new housing starts, foreclosure filings and short sales as a sign of a market’s health. But in an area that requires a constant influx of new residents to replace residents who have died or moved away, the region’s economic health is just as dependent on buyers in the middle and low range of the market.
While those buyers boost or stabilize the population, they put a financial strain on local governments, which must provide services that cost more than the revenue generated by lower-priced homes. The “break-even” point, at which the county receives more revenue than the value of the services it provides, is about $150,000 in Charlotte County. That strain is exacerbated when the new owners claim homestead exemptions, which, in some cases, reduce their ad valorem tax burdens to zero.
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