Homes in Phoenix are selling faster than ever. With plenty of year-round sunshine, attractive career opportunities and a place to call home where you can stress less, why wouldn’t anyone want to move here? 60,000 Californian’s flocked to The Valley just last year alone. The mass migration to Phoenix and into the surrounding suburbs means home values are rising in a way we haven’t seen in over a decade.
The current median home value in Phoenix is $370,000, a 22% increase over the past year. As area home values increase, so will the taxes you owe on your home. Let’s look at the state of the local market and what it means for home values and property taxes.
Phoenix Is A Seller’s Market
There’s a laundry list of factors at play. There are more people looking to buy homes than there are available. It’s the classic case of supply and demand. It’s an opportune time for homeowners to list their home and receive attractive offers well over the asking price. Then, there are many residents who want to sell but don’t plan on leaving the area, so they’re holding onto their homes. For some, it’s easier to take advantage of low interest rates and refinance than to flip the coin and enter a highly competitive buyer’s market. To add, there’s a pandemic-induced labor shortage, the cost of land continues to increase, and lumber prices are on the rise every single month. Essentially, new housing is in demand faster than construction can keep up.
Watch Trevor’s Fireside Chat to learn more about current housing market trends, what’s happening with home values, property taxes and more!
How Maricopa County Determines Home Values
Buyers are quickly snatching up homes as soon as they enter the market. Surrounding homes in desirable neighborhoods collectively see their homes increase in value. Where the grass is greener means you’ll spend a little more green on your next round of property taxes too.
The Maricopa County Assessor determines your home value every year in January based on the assessed value – not the current market value. The assessor re-values your home based on a list of factors that include:
- Nearby homes sales
- Square footage (home & lot)
- Home improvements
- Nearby construction
- Commercial and recreational development
Homeowners receive a home value reassessment notice every February that lists the full cash value and limited property value. The limited property value is the amount used to calculate property taxes for the following year. You have 60 days to file an appeal if you believe the assessor made an error.
How Maricopa County Determines Property Taxes
Your property taxes help keep local municipalities afloat. The majority, 75% goes directly to education. The government funnels your taxes to local county operations that include libraries, emergency response services, water, sewer, and road improvements.
The Maricopa County Treasurer’s Office uses a statutory formula to calculate your property tax rate:
(Assessed value) ÷ 100 x (tax rate) = property tax
The average tax rate in Arizona is 0.62%, which is well below the 1.07% national average. For example, if the county assessor values your home at $200,000, your property tax comes in at $1,240. Luckily, Arizona’s property taxes are some of the lowest in the country, so you won’t need to spend too much time figuring out a painstaking formula to set a budget aside.
If you have a mortgage on your home, your property tax payment usually comes out of escrow as part of your monthly mortgage payment. Otherwise, if your mortgage company doesn’t include the taxes in your monthly payment, or if you own your home outright, you’ll pay the taxes manually. Set a reminder to pay the first half to the county treasurer on October 1, and the second half on March 1 the following year.
Halpern Residential Makes Real Estate, Real Simple
Home values are rising like a Phoenix- in Phoenix. The housing market changes every day and there are a lot of nuances that make it hard for buyers, sellers and renters to track. Not to mention, Maricopa County has one of the most complicated tax systems in the country.
Perhaps you’re moving to the area and need guidance on where to purchase your dream home. Or, you’re a local homeowner and aren’t sure if it makes sense to sell or sit tight. No matter where you’re trying to find your footing in the current market, we’re here to help you make sense of it all.
If you have questions about home values and property taxes that aren’t answered here, call Halpern Residential at 602-595-4200 or shoot us a note. You can also watch Trevor’s monthly Fireside Chat on his YouTube channel, or drop him a line on Facebook or Instagram.