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I bought a lot on Lake Huron that was $38,900 last sumnmer. Now it would be around $75,000. So even raw ,land in a remote place like Drummond Island is seeing prices spike. Too bad I didn’t buy two lots as I don’t want to sell it because every other piece has also gone up.
That is typically not the way property taxes work in most states. They are based on the town's budget for any given year.
If the homes rise or fall in value 50%, but the town's budget only rose 3%, they change the multiplier so that the tax rates are in line with the budget.
The town doesn't suddenly take in double the amount they need to run the town, nor do they suddenly take in half the amount they need to run the town, should home values fall.
Don't forget, local government is made up of local people. In most cases, they don't want to get screwed any more than you do.
In my state, the towns with the highest property taxes are the very liberal towns. And ironically, they are not the towns with great school systems.
Conversely, the towns with the lowest property taxes, by percentage, are the wealthiest towns, and they are the towns with the best school systems. If the homes are mostly $2M and up, you can take a much lower percentage on each home to meet the town's needs than a town with $200k homes.
#1, The Federal Reserve has created this bubble with artificially low interest rates and QE programs where they bought trillions in assets like mortgages off of banks so banks are free to lend more.
#2, The government downplays inflation. Homes, stocks, college tuition, Healthcare, etc are all dramatically beating inflation. Hedonics and other adjustments understate other inflation items.
There's something wrong here. You can do one hell of a lot better than that dump for $650K in Phoenix. I suspect the Denver listing is bogus as well.
The Denver listing is a scrape lot in a mixed use zone. Someone will buy it, scrape it and build a three story retail/ apartment building. It is misleading since it’s not going to be bought and lived in at that price.
People want to live in or near decent-sized cities....that is where the home-costs have gone insane.
You are not too picky, can handle a fixer, and can live in a smaller area away from trendy cities.....these wild, skyrocketing price-surges have had little or no impact. And there are tons of older, fixer-homes that most people do not want.
Even a dumpy but trendy place like Spokane............the little fixers that were selling for 20 to 30 thousand when I first moved here, 10 or so years ago, are now quickly selling for `150k and up.
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