Did Your Property Tax Recently Increase?
Recently, there has been an increase in property values, but what does this mean? Will this cause property taxes to increase? Will it cause them to reach an absurd amount in which we are not ready for? Well, the easy answer to this question is, no. There is no cause for concern based on the insight of the Putnam County Assessor's Office. After being explained, there has been an increase in property values, and property taxes are not expected to increase. So, why are property values going up?
There are many reasons in which property values increase, but there are only a few reasons why it is happening within our area.
Supply and Demand
The law of supply and demand plays an important role in home value movements. Property values can significantly increase if there is not enough supply that meets strong buyer demand. This is the exact reason why property values are increasing in Putnam County. From out-of-state buyers to the Millennial generation beginning their search for homes, the supply is not enough to support this demand. In a 'normal year', we expect to see the number of homes going on the market increase in the spring. As it has increased from the winter months, the supply of homes is much lower than a 'normal' May.
As a result of the intense demand for homes, comparable prices have immensely increased. Comparable sales (comps) can be a result of bidding wars, which has been happening more often in recent times. When these bidding wars occur in a neighborhood, homes will sell for a higher price than others, causing new listings to be set at their highest list price if bidding wars continue to happen. For those who have been in the market to buy a new home, you all may have more knowledge on how wild the bidding wars have gotten. In our office, we have seen the majority of our homes selling over their original listing price! You see, supply and demand play a role with comparable prices, and this is something we have seen throughout the past year. With demand being so high, it has resulted in homes being sold within days of being on the market which is definitely not a bad thing for individuals looking to sell their homes!
Cost of Borrowing
When rates are low, demand goes up. However, we have never experienced a lack of supply quite like this before, which can, of course, increase property values. When Covid-19 brought in uncertainty, demand was low, and interest rates reached an all-time low and brought new buyers. This will likely increase property values if the housing inventory lags behind the increase in demand.
There has been an increase in uncertainty dealing with property values increasing, but we are here to ensure that property tax will not increase in the near future. If you have any questions about any of these items, please feel free to call us at (931) 261-9001!