Property Tax Reappraisals Coming Soon

[Michael Deneen]

I wonder how the board's recent instances of non-transparency and non-responsiveness (fitness center, Clinic clinic, superintendent selection process, etc.) will play out the next time they come to us for a levy. I've voted for every single levy since I moved here, but now I have reservations.

For a wide variety of reasons, I expect the next levy will have a very hard time passing. It could take multiple attempts.

[Jim O'Bryan]

Matthew

There are several links above in this thread that explain the effect of increased taxes on home prices.

Hi Bridget,

I read both of the linked articles, and maybe there are others I missed, but neither one of them actually specifically address increased property taxes on homes with a definite effect on home values. One article dealt with the overall tax reform, not specific to property taxes. And the other article dealt with Illinois property taxes keeping people away from Illinois.

Did I miss some other articles that might make me think Lakewood property taxes are so bad that nobody would buy a house here?

Matthew

One could then reason, if people are staying away, then people have to reduce house values.

I would say an even larger problem is the fact not many moving to the Cleveland area.

So at some point, we end up with a glut of housing stock, which would/could cause property prices to fall across the region.

There is also the infamous "red herring" we moved because of high property taxes. I say red herring because it usually means other issues, but some could be people that can't do the math well wnough that it usually takes 10+ years to recoup the cost of a move. When you add in an increased housing price like moving to Westlake or Bay, it could take 15 or more years if ever realized.

Another huge factor as laid out by "Dr. Death" Dr. Tom Bier is cutting City Services to keep taxes low, or cutting them in general also leads to less interest in community and people looking elsewhere. His articles were published and republished here on the Deck during City Hall cuts of City Services like backyard trash collection, etc.

No matter as taxes go up through the necessity and the failure of City Hall to deliver on anything out side of liquidation of assets, taxes will rise.

.

[Bridget Conant]

It’s not rocket science regarding the effect of property taxes on home prices. You cannot look at the outliers - very expensive properties purchased by the wealthy are less subject to this effect, as are traditionally high tax areas of the country where high taxes are a given.

But for the average homebuyer in an average income area, like Lakewood, taxes do affect prices simply because the buyer has a budget - the total payment. And that total payment has two large components- the loan amount and the property taxes. It’s common sense - the higher the tax, the less they can afford to mortgage. It’s like when mortgage rates rise - it increases the total cost of a home and reduces demand, hence prices.

This IMF study of 9 years of the US housing market proves this effect and even suggests using it as a way to damp down home prices in areas of high price volatility.

https://www.imf.org/external/pubs/ft/wp/2016/wp16216.pdf