Between high interest rates and rocketing home appreciation values across the country, it has been an interesting time to be a homeowner.
On one hand, it means one of your biggest sources of equity is gaining value; but on the other hand, it has led to higher property taxes which can strain families already dealing with the high cost of inflation.
It is also leading some states to cap how much those taxes will cost homeowners.
Chris Hardy is a real estate broker in Colorado. He is also a homeowner, with other investment properties that he rents. Over the last few years, he says he and his wife have paid nearly triple in taxes because of the ballooning home valuation prices not just in his state, but across the country.
"You know, landlords who own property — they got a bump in their property taxes and their insurance rates, and so that, obviously, gets passed on to the renters,” Hardy said.
According to the S&P Dow Jones Indices, national home prices have risen 64% on average over the last five years. To help ease the burden on homeowners, some states have proposed legislation to limit, cut, or offset escalating property taxes.
In Colorado, the legislature increased how much homeowners could take out of their home valuation as part of a tax exemption from $15,000 to $55,000 last November.
It also decreased the residential assessment rate from 6.765% to 6.7%, saving the owner of a $500,000 home $350 a year, according to the nonpartisan Legislative Council Staff.
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Similar measures have passed in Alabama and Wyoming, with special sessions to address property taxes on the docket in both Kansas and Nebraska.
But as Hardy points out, while the measures could save taxpayers money, they would also take away from governments that rely on the funding.
"Certainly, in some of the smaller, rural areas, fire departments are entirely dependent on those assessments and those property valuations to continue providing services that they have,” Hardy said.
The rising valuations have overloaded some assessors' offices. In a call with Scripps News, the assessor for Hardy's residences in Larimer County, Bob Overbeck, said his staff has been flooded with protests from residents looking to get another assessment of their property in hopes that it will lower their bills.
In just the last two years, property values in Larimer County have gone up 40%, adding to monthly budgets that have also seen grocery costs and insurance prices rise as well.
"The triple whammy on this is insurance companies are more and more leaving Colorado because of wildfire, because of hail, because of climate change,” Hardy said. “They haven't been as profitable in this state for a while and so people are seeing their insurance premiums doubling and tripling along with higher deductibles."
But it is not just confined to Colorado. According to the National Association of Realtors, home insurance costs are expected to go up 6% by the end of 2024, and that's on top of a 20% increase from the previous two years.
