Chapter 15: Property Taxes and Real Estate (Mandatory Thread) Taxes are a fact of life; property taxes fund the operations of local government. Property owners fully understand the role of local property taxes play in the development and growth of our local communities from schools to parks to fire and police protection to local roads and other community based services that make our communities what they are. So, it should be clear that a review of the property tax process is appropriate. Take time to contact your local county or city government (visit or call during the normal weekday work hours) and report back what your local assessor is doing to keep up-to-date on the changing value of the real estate market in your community. What was the impact of the real estate market collapse (2006-2008) to local property values? What has been the extent of the real estate recovery over the past 10 years? What conclusions, if any, do you draw about your local government and their property tax policies?

Property Taxes and Real Estate

The financial issue of 2008 typically led to the most significant interruption to the United States housing market since the great depression. Form the greatest of the housing bubble that took place roughly a decade ago until the recent time; there has been close to six percentage point increase in the total number of renters to owners to 44 percent from 38 percent (Chan et al. 2011). Moreover, the housing markets with greater spikes in foreclosures during this period were more likely to exhibit more significant jumps in renting through the period; more so, in-house markets on the west and east coasts. Also, as part of the crisis, there was a constant reduction in homeownership and increase in renting where the total percentage of renters in the 50 most significant United States metros who rent increased from 36 percent to 41 percent after the crisis.

Among the improvements and recoveries experienced in real estate over the past ten years comprise of the establishment of “sweet-spot” strategically for sales transactions that have typically fallen within the $500,000-$800,000 price range. As outlined by the national association realtors, the available nationwide sales have progressively increased in an upward trail (Chan et al. 2011). The increasing pool of buyers across the country amidst a decreasing number of existing properties has led to a higher and tighter supply thus increasing the general sale prices. However, while American home prices have improved to their pre-crisis standards, not all areas and types of housing have rebounded to the same level since homes valued below $100,000 have appreciated close to 10 percent in price from 2000.

 

Reference

Chan, K. F., Treepongkaruna, S., Brooks, R., & Gray, S. (2011). Asset market linkages: Evidence from financial, commodity and real estate assets. Journal of Banking & Finance35(6), 1415-1426.

Still stressed from student homework?
Get quality assistance from academic writers!