Several areas of Colorado are expected to experience a massive rise in property taxes because of changes in the state’s housing market.
Several county assessors across the state warned that there will be an increase in the median residential value of many homes, according to a Denver Post report. The assessors said that property taxes could increase by 35 percent in Boulder, while other areas may see a rise of 60 to 70 percent. Assessors estimated rises in median residential value of 38 percent in Adams County, 40 percent in Larimer County and 41 percent in Broomfield County, the Post’s report said.
The news in Colorado comes amid ongoing concerns about the housing market across the U.S. particularly after the collapse of the Silicon Valley Bank in March, when some economists expressed worries about a possible financial crisis. This spring, after months of inflated prices and increasing mortgage interest rates, the U.S. housing market is showing signs of a slowdown.
In December 2022, experts told Newsweek that they expected to see a housing market “correction” but not a crash.
“I think a crash would be consistent with a lot of foreclosures: people losing their homes with prices falling below the amount of mortgage debt that’s owed, and people giving up and being forced or voluntarily leaving their homes,” Mark Zandi, chief economist of Moody’s Analytics, previously told Newsweek.
But a market correction occurs when “unusual price growth” is followed by moderate price declines like 5 percent, according to Lawrence Yun, chief economist at the National Association of Realtors.
During a press conference on Wednesday, Douglas County Assessor Toby Damisch spoke about the dramatic rise in property taxes in several Colorado counties. “This is very, very serious. If the state legislators don’t act on this, it will be a crisis,” he said.
Similarly, Keith Erffmeyer, the assessor in Denver County, said, “We’ve never seen…something this historic or unprecedented,” according to CBS News.
Douglas County Treasurer Dave Gill recently told homeowners to expect a rise in property taxes ranging from 40 to 50 percent, according to The Colorado Sun, an online news outlet. “It is prudent to be prepared,” he told homeowners in the county.
Newsweek reached out via email to Colorado’s Division of Housing, in the Department of Local Affairs, for comment.
Earlier this year, New York City saw a rise in property taxes due to a rise in the market value of single-family homes.
“Citywide taxable billable assessed value, the portion of market value to which tax rates are applied, increased by 4.4 percent to $286.8 billion,” the New York City Department of Finance said in a press release in January.
The city’s Department of Finance commissioner, Preston Niblack, said, “The decline in office occupancy continues to impact retail stores and hotels in the city, contributing to the sector’s slow recovery. At the same time, single-family homes, which constitute a majority of residential properties, have exhibited a robust recovery and continued growth.”