Awesome, values are up! Oh wait, my home is being reassessed? Dang it!
For those in Cook County, you likely have received a mailer from the Assessor’s Office with a notice of your revised “Fair Market Value”. In many cases, this value is actually less than what you would get if you sold the property now. That’s good right? Well, yes, but the issue is that your previous assessment was likely 10 – 20% lower than the reassessment that you just received. Yep, that means your real estate taxes are going up. If you’re in DuPage, Lake, Kane or McHenry County then you will see your property reassessed next year.
I get that we need to pay real estate taxes in order to fund everything from schools to mosquito abatement but the real estate taxes being as high as they are has been, and will continue to be, a drag on price appreciation. When a $400,000 home is paying $10,000 a year in real estate taxes and then it goes up to $12,000 a year, that will cause people to continue to leave the state. For those that escrow your taxes in your mortgage, be prepared for a sizable bump up in your monthly payments.
You have to wonder how much longer this can go on until it has reached a boiling point. The unfortunate reality of it is that as real estate taxes go up, home values will be stifled because of the increase in monthly payments that buyers have to pay.
For those of you with commercial property in Cook County, you are even more likely to weep when you see the reassessment. Depending on the classification of your property, you are likely paying 2.5 times more than residential properties pay. To put that in perspective, a $150,000 office space has to pay around $13,000 in real estate taxes a year. Ok, I’m done ranting for now.