Land Rush: Tax deeds suddenly become a hot Putnam commodity

Palatka Daily News

As a real estate agent, Lynn Jones just sold riverfront property about 3 miles east of U.S. 17 on West River Road for $420,000. That's just land — no house.

Jones cited the West River site as an example Thursday of how hot the real estate market is in Putnam County.

"Waterfront property is just going gangbusters, particularly navigable, where it goes out to a larger body of water," she said. Lakefront property is selling very well, also, Jones said.

"There's a lot of movement," she said of real estate transfers.

Property Appraiser Larry Pritchett and Clerk of the Courts Tim Smith can attest to that.

Tax deed sales in Putnam County used to be about as exciting as a zoning board meeting, they said.

About a dozen people might show up and bid on the deeds, Pritchett said. People might buy $40,000 of tax deeds, Smith said. The county held its monthly tax deed sale Wednesday.

"In years past, tax deed sales were sparsely attended, sedate affairs," he said. "Today and many times recently, there was a feeding frenzy. People who are buying are from out of town."

They're also buying sight unseen, Pritchett and Smith said. After they buy it, "I can't tell you the number of times they come up to me and say, ‘Where is this property?'" Smith said.

So much land is being sold in Putnam that clerical workers in the clerk's and property appraiser's offices are working overtime just to keep up with recording deeds, Pritchett and Smith said.

"We used to have people come to us, and they would say they would have lots that they couldn't sell," Pritchett said. "Now we have lots that are getting sold three or four times."

From the $40,000 of tax deeds sold a year ago, the county sold more than $200,000 in tax deeds two months ago, he said.

Tax deed sales are up 177 percent from a year ago, Smith said.

The county commission chambers are packed to the gills and people are flowing out into the halls for deed sales, Smith said. Everyone wants a piece of the real estate pie in Putnam, Pritchett said.

It's not just waterfront property that's selling well in Putnam, Jones said.

As an Interlachen resident, she said she noticed lots in Interlachen Lakes Estates selling quickly and making a lot of money.

People also see the land as an investment opportunity, Pritchett said. Some people are giving up on the stock market for investments and turning to real estate, he said.

For example, many South Florida investors are coming to Putnam and buying many lots in Interlachen Lakes Estates, Jones said. People can build on some of those lots, but not all of them, county officials said. Those quarter-acre lots were selling for $1,000 a couple of years ago, Jones said. Now they're selling for $12,000 to $15,000, Jones said.

A few months ago, Tax Collector Ken Mahaffey decided to conduct the county's annual tax certificate sale online for the first time.

It worked.

Internet investors worldwide have helped make the county $3.4 million richer.

More than 1,100 people logged onto the Web at www.putnamtaxsale.com from May 23-25 to buy tax certificates, Mahaffey said. That's more than 10 times the 80 bidders the county normally gets for its annual certificate sale, he said.

The bidders bought $3.4 million worth of certificates, up $800,000 over last year's tally of $2.6 million in certificate sales, Mahaffey said.

At a tax certificate sale, people bid on properties where the owners haven't paid their taxes. Buyers bid for the certificates by interest rate. The certificates earn interest for their purchasers. Certificate sales often lead to deed sales in which a property owner who has not paid taxes can lose the land.

Most local people cannot afford the real estate prices, Pritchett said.

"When people go to a tax deed sale, they're expecting to buy land for a cheap price," he said. That doesn't always happen anymore, Pritchett said.

Jones said some of her clients agree.

She said some buyers come to her to say the land is not selling for the same bargain prices it once was. She tells them "the boat is moving," meaning they've got to strike while the iron is hot, Jones said.

"It's a sellers' market," she said.

Compared to some other parts of Florida, land in Putnam is still cheap, Pritchett said. But it's not as cheap is it once was.

People started buying lots in Putnam on eBay, an online auction site. That was "the tip of the iceberg" for land sales in the county, Pritchett said. "That was a precursor to this flood of sales," he said. "That was just the beginning of this market. If you own a lot to build on in Putnam County, you can sell it."

bbuck@palatkadailynews.com