As Assessments Rise Will Your Taxes?
Reassessments are again underway after being put on hold due to the pandemic and homeowners are concerned that their property taxes could also go up. But that’s not necessarily the case.
Why are property tax assessments going up?
You might call it a "perfect storm." And a matter of supply and demand.
- When Covid-19 spread across America and shut down many activities, people stayed at home and many worked from home.
- Money not being spent on travel, leisure, and work expenses such as gas and clothing was saved and often spent on home improvements.
- Mortgage interest rates for 30-year mortgages fell to an all-time low of 2.65% in 2021, making it more affordable to buy.
- When Covid-19 became more manageable and communities began to re-open, an influx of new homebuyers and renters were unable to purchase or rent a new home due to low inventory or high prices.
- The New York State Association of REALTORS® (NYSAR) reported on April 20, 2022, that, “Inventory of homes for sale across New York State fell 22.6 percent from 39,707 homes available in March 2021 to just 30,724 units last month.”
- As inventory dropped, prices increased. Increased demand for the limited supply of homes drove up prices as sellers entertained multiple offers.
- New home building couldn’t make up for the increased demand as it was slowed by supply chain issues.
In its 2021 Annual Report on the New York State Market, the New York State Association of Realtors reported: “The overall median sales price increased 19.4 percent to $370,000 for the year. There was also a 26.8% drop in homes for sale priced $100,000 and below… so housing affordability will remain an important factor to watch.”