The housing market in Phoenix, AZ, doubled its increase in home values from 4% in 2015 to 8% in 2016. Recently, Paul Petersman, assessor for the Maricopa County (home county of Phoenix), said that “…the housing market in Maricopa County has nearly recovered from the recession.”
One of the 19 states hardest hit by the housing market collapse in 2008, Arizona and its capitol city can now breathe a sign of relief. The full cash value median price of a home in 2016 was $197,600. The median sales price of a home was approximately $240,000. The foreclosure rate is down, the local job figures are up and new construction is seemingly happening everywhere.
The Maricopa County assessor’s office purposefully renders home valuations in Phoenix between 10-20% below market value. This method to what some people call madness is the assessor’s intent to cut down on appeals and potential inflation of valuations by home owners. Also, the county assessor’s office renders a “limited cash value” on a home that is lower than the full cash value due to Proposition 117 passed in 2015 which capped increases on limited cash values at 5% annually. (The limited cash value of a home is the figure upon which a homeowner’s property taxes is based, known in other markets as the ‘tax assessed value’.)
Speaking of taxes, Arizona has one of the most complicated property tax systems in the country. Homeowners are not taxed on the most current valuation but rather on a valuation calculated some 18 months prior. (This means that a tax bill received today would be based upon a valuation from 2015.) Additionally, depending upon where a homeowner lives in metro Phoenix and how much money city services such as fire, police, schools, etc. anticipate their operational needs/costs, local property taxes could arbitrarily and surprising dip, rise 5% and/or jump 18% each and every year.
Complex as they are, Arizona’s property taxes still remain lower than 40 other states in the country. This 5th largest city in the nation, just like its full cash home valuations, has much room to grow.