Wait to buy in Philly after AVI? (Philadelphia: 2014, rental) - Pennsylvania (PA) - City-Data Forum

taha-nj · 01-16-2013, 05:30 PM

Hi everyone, so my wife and I are seriously considering to move from central NJ to Philly. We have already seen some houses we like in QV, but none of the realtors were able to tell us what to expect in terms of taxes after AVI.

What we are more concerned about, however, is the possible impact of higher property taxes on the values of homes. In NJ, higher taxes (that is higher than say next town over) often translate into lower values for houses, and I am worried that our 400k townhouse will suddenly be worth 300k if the taxes increase manyfold after the AVI.

Anyone have thoughts on this? Should we wait till 2014 to buy?

frankgn87 · 01-16-2013, 06:43 PM

If you like a house in a neighborhood you like, don't worry about value. Home values are screwed up and most likely will get worse. If you are a flipper, worry, an owner just enjoy

taha-nj · 01-16-2013, 07:02 PM

Quote:

Originally Posted by frankgn87

If you like a house in a neighborhood you like, don't worry about value. Home values are screwed up and most likely will get worse. If you are a flipper, worry, an owner just enjoy

Thanks for the reply frank. We would be in it for the long haul, but might need to move depending on the job situation...hence my worry about medium term price changes.

How screwed up are the home values in philly? Do you think they will get worse substantially in a year's time? That's another consideration, we aren't exactly in a hurry, and could buy next year, if that means lower mortgage payments...

RightonWalnut · 01-16-2013, 09:39 PM

Homes around the core of Philadelphia will only continue to appreciate. Homes values in Philadelphia are not screwed up, the property taxes are screwed up. AVI is just a reassessment of the property taxes since it hasn't been done since 1962. Most homes around the core are paying EXTREMELY low property taxes because they were once rough areas (in 1962) that have been gentrified and the property taxes have not been changed to reflect the change of the neighborhood. So, for instance, someone with a $500k home in one of these neighborhoods is paying something ridiculously low like $600 in property taxes. AVI is not going to change the value of the homes, and housing prices are only going to continue to rise as the core of Philadelphia becomes hotter and hotter. I wouldn't worry about it to much. The people who are worrying are worrying that they can't afford the new property taxes, not that their houses will be worth less.

mancat100 · 01-16-2013, 10:07 PM

Although I have some serious issues with AVI and how it's being unfairly implemented, I wouldn't let it affect your decision to buy. You might want to allow just a bit of slack in your budget so you can pay additional taxes if the need arises.

drive carephilly · 01-16-2013, 10:55 PM

You can easily look up the property taxes in any neighborhood. Find the most expensive taxes in that area and expect your taxes to be that.

Taxes are definitely going to take some value out of homes as hardly anyone pays cash for a house nowadays - and people look for houses they can afford based on their anticipated monthly payment.

sj08054 · 01-17-2013, 08:45 AM

Home value in most of Philly are just going to continue to go up. Is it going to get up to where it was in 2006-2007? Not likely in the next 3 years but going up. I do rental properties in S. Philly and all I see is the "base" home getting more and more expensive. Fixer upper in decent neighbor are getting closer to the $100K mark.

I don't worry about the tax too much. Heck, I purchased a property 2 years ago with whacky property tax (houses on the same street was paying 2/3 what mine was). I filed my dispute with BRT and though it took a year but I am finally back to paying what others on the same block is paying.

My take on the higher tax is that while it may drive the older owner out, it will make people care more about the value of their neighborhood. If higher tax mean cleaner street/neighborhood.. I am all for it.

taha-nj · 01-18-2013, 03:39 PM

Thanks for all the feedback everyone. I still have some reservations about the AVI however.

One of the townhouses we are interested, for example, is located in Fairmount and is on the market for 500k. It was last sold for 450k in 2006. Property taxes is only 3750, but it is assessed at 40k ! Basically, we can afford this house because the taxes are so low--if we had to pay an additional 10k a year, we couldn't afford this property.

I'm just trying to figure out what would happen to the taxes if this house was assessed at say 400k, rather than 40k? How big of a jump in taxes should we expect?

frankgn87 · 01-18-2013, 04:37 PM

that would be a HUGE jump which is very likely happening. This is exactly the kind of prop the city is losing big taxes on and will be the top of their list for a reassessment.

taha-nj · 01-18-2013, 05:23 PM

Just found this map: AVI Impact Map | AxisPhilly from The Philadelphia Public Interest Information Network

Looking at comparable houses in Fairmount, it appears that the property tax for our 500k townhouse could jump to 10k. Still cheap compared to many places in northern Jersey, but high enough to make me have second thoughts. We might go for a new construction with tax abatement instead...