The recent US housing boom is already showing signs of a correction. How will that impact your property taxes?
All of the chaos of last year sparked a record breaking national housing market run. Nationally house prices grew at their fastest rate in 15 years to March 2021. That run may have come to an end. How will it impact your property tax bills? What control do you have over them?
The Hot Housing Market
Realtors have been reporting a housing boom that has been almost out of control over the past year as millions have looked to restructure their living situations, and to flip houses to take advantage of the white hot market.
In some cases the fierce competition has meant new listings selling for 12% over asking prices in just hours. Most of the country has enjoyed double digit price gains, with some seeing prices up by triple digits over the past 12 months.
NY’s growth has been more constrained, and balanced by people leaving in droves for more suburban and rural areas as well as smaller towns.
According to Zillow house values in Manhattan and Brooklyn grew just 2.5% over the past year, compared to the over 13% national average. Nassau County, Long Island saw prices up 9%. With Suffolk County house prices up over 14% to an average of over $634,000.
The Correction May Already Be Here
Following the cryptocurrency dive that saw investors lose around 50% of their wealth in just about a day, and related stock prices diving nearly 30%, the data shows housing may be following suit too.
Creator of the Case-Shiller Index, Robert Shiller has warned that prices are likely to correct again, causing some pain out there. Home sales began dropping in April, with pending sales sinking according to MarketWatch, which says housing is falling back to earth. Pending sales are a leading indicator which point to the future direction of home sales and values.
Your Property Taxes
Property tax assessments and annual bills are supposed to follow property values. Meaning higher values push your taxes up, but a new decline should result in lower tax bills.
Already this year places like Long Beach have passed budgets which call for more property tax hikes, with some school districts already planning hikes that break through the tax ‘cap’.
Unfortunately, this increase in tax rates may offset and eliminate any savings that should come from lower tax assessed values.
What To Do
Distressed property sales and foreclosures may ultimately bring values down even further. Though that is going to take time, especially in New York’s especially slow system.
In the meantime, NY property owners should be exercising their rights to vote at every level and participate in discussions and budget decisions that will impact their taxes.
For more immediate help, it is wise to use your right to challenge your already flawed taxes, and appeal your bill so that you aren’t overpaying by hundreds or thousands of dollars this year.