bre itba rt com

Report - U.S. Property Taxes Soar by 7%, Sanctuary State of New Jersey Hit the Hardest

Olivia Rondeau ~4 minutes

Property taxes for U.S. single-family homes soared to $363 billion in 2023, a nearly seven percent increase from 2022 and the most dramatic surge in five years, according to an April report from real estate data analytics firm ATTOM.

The analysis, compiled with data from 89.4 million homes, revealed that the increase in property taxes from 2022 to 2023 was almost double the growth rate from 2021 to 2022.

The average single-family property household paid $4,062 in property taxes last year, but 21 counties had an average annual property tax greater than $10,000 — 12 of which are in the New York City metropolitan area.

The highest average was in Essex County, New Jersey, with single-family homeowners paying about $13,145 in 2023.

Real estate experts have cited “inflationary pressures” as a factor as to why the taxes have increased so much.

“Property taxes took an unusually high turn upward last year, pushing effective rates up, while huge gaps in average tax bills between different parts of [the] country remained in place,” said ATTOM CEO Rob Barber. “The tax increases were likely connected, at least in part, to inflationary pressures on the cost of operating local governments and schools, along with rising public employee wages and other major expenses.”

Barber explained that “ongoing disparities in how much homeowners pay in different parts of the country are usually related to a couple of important things: varying levels of government services and reduced economies of scale in metro areas with many small municipalities that each maintain separate local governments and school systems.”

Forbes finance reporter Natalie Campisi warned that homeowners who have not “factored such increases into their housing budget may be surprised at tax time” in an article reacting to the alarming data.

In New Jersey, where average property taxes are the highest for Americans, illegal immigrants were enabled to obtain well-paying licensed jobs after Gov. Phil Murphy (D) passed Senate Bill 2455 in 2020.

Prior to that law, immigrants were required to have a “lawful presence in the United States” to qualify for a license, Br eit bart News reported.

The legislation was written to benefit 500,000 “undocumented residents” in New Jersey, NJ.com reported at the time.

Murphy has been forced to face the consequences of his actions, begging migrants to stop coming to his sanctuary state in 2023 because they are overwhelming welfare and aid services, even with his loose job licensing requirements.

“I don’t see any scenario where we’re going to be able to take in a program in Atlantic City or frankly elsewhere in the state,” the progressive governor said last September. “You need scale, enormous amount of federal support, resources that go beyond anything that we can afford. Putting everything else aside, I just don’t see it. I would suspect that that will continue to be the case.”

A recent poll of voters in the deep blue state found that Demo crats, independents, and Rep ublicans are souring on the B iden-Harris administration’s immigration policies, Br eit bart News reported.

Only 7%?

Catch up from the Covid-flation when all our stuff went up 30-50%? Pretty sure many counties are behind getting properties reassessed. Due to staffing limits, our county assessor only reassesses once every 3 years. So yeah... I anticipate at least one more kick in the teeth.

NE, curious to hear your thoughts on how you view inflation? I'll give you mine in exchange.

Generally, I see inflation as disruptive to the economy overall, and the average person is not equipped to handle it well once it goes over 5%.

If the county reassesses 1/3 of the properties each year --do you think they put all of them in a hat and draw 1/3 to reassess? Or do they just do it by neighborhood, by street or what? If they are just looking to increase revenue, maybe they check all the existing ones and choose the 1/3 that are currently the highest value and get to the less expensive properties in later years. I find it difficult to believe that they will check empty lots and real low value places when they could double their take by only hitting the high value places.

Question of the day.

Had reassessment talk with my assessor a little while back.

I would be so happy with 7% increase. Our rentals have seen average 30-45% increase in Property tax every year in the past few years.

Insurance doubles every year too!

I would be so happy with 7% increase. Our rentals have seen average 30-45% increase in Property tax every year in the past few years.

Insurance doubles every year too!

I don't always agree with JAC. This is one of those times - If have to say, telling a resident that rent is going up because the valuation went up isn't going to sit that well. Instead call a spade a spade. Taxes and insurance went up therefor, your rent is going up.

Ray: What are you disagreeing with? JAC didn't say to tell that to the tenant at all.

He was just explaining that property values going up isn't often associated with inflation. We've watched property value go up through high and low inflationary periods. We all know that the housing market and property values often don't follow inflationary lines.

So, I think JAC would likely agree that you don't tell the tenant that their rent is going up because your place is worth more! You'd do exactly as you suggest: tell them that their rent is going up because property taxes went up. The fact that they went up because the place is worth more isn't something you need to explain to the tenant. I don't think JAC suggested that at all.

He was more pointing it out to US. For those complaining about it. That's how it works. Our properties appreciate. We hope to sell them one day for more money. If we want that to occur, then the property taxes are going to go up accordingly. You can't have it both ways. You can't expect to sell a place for $300,000 and, at the same time, complain that the local government now values it at $300,000, so you need to pay taxes on that amount.

" Its not inflation, its valuation. If you don't want the value of your property to increase then don't complain when you don't get a return on your investment when you sell."

There's a reason I'm a former NJ resident. Property taxes and auto insurance drove me out of NJ to PA. NJ has had the highest property taxes nationally for years.

Home rule is the one of the biggest factors driving property taxes and it's a phenomenon unique to the East Coast. Many towns in NJ and here in PA are in close proximity to each other yet have separate fire, police and schools. Much money (and taxes) could be saved by consolidating services but that would require giving up political fiefdoms and patronage

It amazes me that the property taxes are that high.

Wages are not adjusted accordingly.

Why?

Because property taxes are based on property value, which has been skyrocketing for a long time now.

Wages are based (primarily) on inflation.

Again, because real estate value and inflation are simply NOT heavily tied together. Again, we've watched real estate values increase through high and low inflationary periods. They are not the same.

Is there a relation between inflation and housing? Yes, at times.

But lots of times there is not.

Let's look at data before the pandemic for a minute...

From 1981 through 2020, the Consumer Price Index (CPI -- which represents inflation), increased, on average around 2.5-3%. You can actually pick almost ANY year in there and see the same thing. The CPI line from 1981 to 2020 is almost a straight line showing an increase of 2.5-3% per year for the last 10, 20, 30, or 40 years leading up to 2020.

So, using that data, from the ten years from 2010 to 2020, the CPI increased around 30%.

Now let's look at housing prices up until 2020. From 2010 to 2020, the median sale price of a house in the USA increased from around $209k to $329k.

That's a 57% increase during the same period. Almost double inflation.

You must see and know -- even without this data -- that the housing market was increasing significantly above inflationary amounts for decades BEFORE the pandemic started.

As for your statement that the recent rise is tied to the pandemic, I agree. That that partially is the reason for the very recent rise.

But this was more of a general discussion here -- pointing out that, in general, the real estate market is not really tied to inflation. It has steadily beat inflation by quite a bit.

I mean, that's why we invest in real estate, right? Sure, some do it expecting zero appreciation and just want the rents. But many do it being fine with near break-even on rents against the mortgage because they know, after 20 years, that place is going to be worth a ton more than just the inflationary increase during that same period.

That is why real estate value is NOT really tied directly to inflation. It has some effect, sure, but is not the main driver.

Hopefully any "sophisticated investor" can understand that. Any simple CPI vs real estate market price will show that -- again, for the past 10, 20, 30, or 40 year span.