Headlines – Week of September 26, 2010
October 3, 2010
States with Highest, Lowest Property Taxes
A 2009 Tax Foundation ranking shows that the 10 states with the lowest property taxes are all in the South. The homeowners there pay, on average, less than $1,000 a year in property taxes, while those in the East can pay more than six times as much.
A Tax Foundation map of states shows 16 states, highlighted in blue, where residents pay in property taxes 1.2% or greater of their home’s value. The 19 white states fall between 0.65% and 1.20%, while the 15 yellow states pay the least.
New Jersey came in first but New Hampshire, which has no state income tax, had the next-highest real estate taxes as a percentage of home values.
Louisiana had the lowest median taxes compared to property values but the second-lowest taxes compared to values are in Hawaii.
The national median for real estate taxes is 1.04 percent of a property’s value. Here’s the list of the top 10 states with the highest median real estate taxes as a percentage of median home value as well as the ranking of states with the lowest:
States with the highest taxes:
1. New Jersey (1.89 percent of property value)
2. New Hampshire (1.86 percent)
3. Texas (1.81 percent)
4. (tie) Wisconsin (1.76 percent)
4. (tie) Nebraska (1.76 percent)
6. Illinois (1.73 percent)
7. Connecticut (1.63 percent)
8. Michigan (1.62 percent)
9. Vermont (1.59 percent)
10. North Dakota (1.42 percent)
States with the lowest taxes:
1. Louisiana (0.18 percent)
2. Hawaii (0.26 percent)
3. Alabama (0.33 percent)
4. Delaware (0.43 percent)
5. West Virginia (0.49 percent)
6. South Carolina (0.50 percent)
7. (tie) Arkansas (0.52 percent)
7. (tie) Mississippi (0.52 percent)
9. New Mexico (0.55 percent)
10. Wyoming (0.58 percent)
In the survey, Florida came in 22nd, at 0.97% of the state’s median home value.
Home Prices Lower Next Year In Many Markets
The most recent Standard & Poor’s/Case-Shiller 20-city index increased in July from June. However, according to analysts surveyed by MacroMarkets LLC, nationally, home values are projected to fall 2.2%in the second half of the year. And Moody’s Analytics predicts the Case-Shiller index will drop 8% within a year.
That’s because the peak homebuying season is now ending in most markets. The hardest-hit markets, already battered by foreclosures, are bracing for a bigger wave of homes sold at foreclosure or through short sales.
According to Veros, a real estate analysis company, the areas likely to endure price decreases over the next year are:
• Port St. Lucie, Fla., and Reno, Nev., where prices could fall 7% over the next year.
• Orlando and Daytona Beach, Fla., which face price drops of at least 6%.
• Las Vegas, which led all declines in the latest report, is also expected to post a 6% drop. Home values there have already tumbled 57% from their peak four years ago.
This year, about 2 million, or 41%, of the 5 million homes sold this year will be distressed sales, according to some analysts.
For next year, that figure is on pace to hit 2.4 million homes, or 45% of all sales. Distressed sales are projected to make up at least a quarter of the market for the next four years. In healthy housing markets, distressed sales typically make up only 6 to 7% of annual sales.
A much brighter outlook is forecast for some areas of the country, especially major cities that never experienced an outsized housing boom – and bust. Major cities in Texas, for example, have relatively healthy economies and low levels of foreclosures.
Dallas home prices fell only 11% from their peak in 2007 and bottomed out last year. They have since rebounded about 8%. Houston and Dallas are projected to rise about 3 to 4% over the next year.
Nationally, prices have risen nearly 7% from their April 2009 bottom. Yet they remain nearly 28% below their July 2006 peak.
Most experts predict about 5 million homes will be sold in 2010. That would be in line with 2009 and just above 2008, the worst sales performance since 1997.
July was the worst month for home sales in 15 years. August slightly better. The record number of foreclosures, job concerns and weak demand from buyers have combined to weigh down prices.
Where the Smart People Live
CNN/Money.com recently published a report on the cities with the highest number of residents with a college degree. Here are the metro areas that the most- and least-educated call home:
Metro areas with the highest percentage of residents with a college degree:
1. Washington, D.C., 47.3 percent
2. San Francisco, 43.5 percent
3. San Jose, Calif., 43.2 percent
4. (tie) Raleigh, N.C. 42.2 percent
4. (tie) Boston, 42.2 percent
6. Austin, Texas, 38.7 percent
7. (tie) Minneapolis, 37.6 percent
7. (tie) Denver, 37.6 percent
9. Seattle, 37.4 percent
10. New York, 35.6 percent
Metro areas with the lowest percentage of residents with a college degree:
1. Riverside, Calif., 19.2 percent
2. Las Vegas, 21.3 percent
3. Memphis, Tenn., 24.2 percent
4. Tampa, Fla., 24.6 percent
5. San Antonio, Texas, 24.8 percent
6. Louisville, Ky., 24.9 percent
7. New Orleans, 26.2 percent
8. Detroit, 26.3 percent
9. Orlando, Fla., 26.6 percent
10. Cleveland, 26.9 percent
Posted by Scott R. Lodde