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April 2024 » thefivestar.com 75 April 2024 J O U R N A L PANDEMIC-ERA HOME PRICE GROWTH FUELS RISE IN PROPERTY TAXES A nnual property taxes are a direct, out-of-pocket expense that af- fects budgets for homeowners in the United States. Rising real estate taxes are hurting millions of homeowners as U.S. home prices continue to grow and hit all-time highs. This is according to a new CoreLogic report, which exam- ined just how much property taxes have changed since the pandemic. Specifically, the significant increases in home prices during the pandemic were followed by the 2023 property-tax assessment cycle. The U.S. home market experienced one of the greatest price increases in history between 2019 and 2022, rising by almost 40%. Property taxes can differ by state and municipality and are determined by the assessed value of a home. However, as values increase over time, property taxes almost always rise. Through an assessment cycle, local tax assessors reevaluate properties regularly. State rules and norms regulate assessment cycles, while local decisions are frequently made in accordance with statutory provi- sions. As a result, property taxes will rise more frequently and assessed values will more accurately represent the proper- ty's current market value in the shorter assessment cycles that local tax officials use. Evaluation cycles could last anywhere from one year to 10 years. Homeowners who reside in states or tax jurisdictions where homes are subject to annual reassessments (or have recently been reassessed) as the 2023 assessment cy- cle draws to a close will probably notice a sharp increase in property taxes, especially in places where home prices increased significantly during the pandemic. How Much Have Americans' Property Taxes Changed Since the Pandemic? Whether or not there was a reassess- ment, the median property taxes in the United States for all properties reached $2,826 in 2023, an increase of $539 from 2019 and a 23.6% increase over that time, or 5.9% annually. The typical property taxes for reas- sessed properties were $2,943 in 2023, an increase of $612, or 26.3%, from 2019—an average of 6.6% annually. As a result, homeowners whose homes were not reas- sessed paid $315 less in median property taxes, totaling $2,592. Additionally, there was a lower increase in non-reassessed properties between 2019 and 2023—402 or 18.4%, on average 5% annually. Examining Annual Property Tax Rates and Costs by State According to the analysis, property taxes differ vastly at the state level. In 2023, Mississippi ($896), Arkansas ($847), West Virginia ($694), and Alabama ($708) had the lowest median property taxes among the states. The states with the highest median property taxes were New Jersey ($8,498), Connecticut ($6,103), and New York ($6,043). California, Texas, Vermont, New Hampshire, Rhode Island, and Massa- chusetts have the next highest property taxes, with median yearly payments ranging from $4,500 to $6,000. The main cause of varying property taxes is the disparity in property tax rates and home prices. State regulations that set annual limits on assessment value rises are also significant because they influence the annual rate of growth in property taxes, independent of the mar- ket rate of appreciation of home prices. For example, reassessment hikes are capped in California at 2%, but home- owners in Texas are subject to a 10% annual cap. Even though both Texas and California have had some of the greatest increases in home prices in recent years, many homeowners in Texas have probably seen their property taxes rise considerably more quickly than those in California due to Texas's less stringent assessment cap. Hawaii has property tax rates as low as 0.3%, while states like Illinois, Pennsylva- nia, New York, New Jersey, and Vermont have rates as high as 2% or higher. After a significant legislative tax decrease in 2023 that benefited homeowners with an average 18% drop in property taxes, Idaho has the second-lowest rate. Idaho's median annual property taxes in 2023 were $1,718. In conclusion, it's critical to remem- ber that the figures above are state aver- ages. Property taxes are set and admin- istered by local governments, counties, and municipalities in the United States, therefore the location of your purchase will affect the actual rate and yearly expenses. WHERE ARE AMERICANS LOOKING TO SETTLE? N ew research from Storage.com has revealed which states people are most likely to lose out on their dream home to others getting there first, with Colorado being named the top state for those hoping to move. Storage.com's research analyzed na- tionwide and regional Google searches for keywords related to real-estate sites such as Zillow and Trulia to identify which states' properties and rentals are most in demand. The searches were then compared against local populations to determine where reported the highest desire. "Finding the right place to live can seem like the biggest challenge of the process at the time; however, it's only the first hurdle. While it's near impossible to remove all stress from a move, beginning packing as soon as things are in motion can seriously ease the headache," said Chuck Gordon, CEO of Storable, the parent company of Storage.com. "You'll be surprised how quickly time can creep on you, and suddenly you have most of your house to pack still. However, it can take weeks upon weeks before you receive a moving date—sometimes even months— and living amongst boxes can add to the