Squeeze Intensifies for U.S. Homeowners as Property Taxes Surge Amid Commercial Real Estate Market Woes – Hoodline

1 minute, 42 seconds Read

As property tax bills for homeowners across the U.S. tightened their squeeze last year, they may find little solace in the fact that the commercial real estate market’s weakness could pile on additional pressure in the future. In 2023, homeowners were hit with an increase of nearly 7% in property taxes levied on single-family homes, a jump to $363.3 billion from $339.8 billion the previous year, according to The National Observer: Real Estate Edition. That’s the steepest climb in five years.

Not only has the average property tax on these homes risen to $4,062—up by 4.1% from 2022—but states in the Northeast and Midwest like Illinois, New Jersey, and Connecticut are seeing the highest effective property tax rates. Facing a commercial real estate market beset by challenges, with office space owners winning tax cuts after property values were lowered, residential owners might well end up as the cash cow for municipalities looking to balance their books.

Buy/sell, rent/lease residential &
commercials real estate properties.

Meanwhile, for CRE property owners looking to restore some parity, their management strategy on property taxes has never been more crucial. A report by Altus Group shows that property tax is a whopping 25% of net operating income for average commercial properties. Not attending to property tax can lead to a devaluation of properties, meaning less capital for improvements, a challenge to retain tenants, and a potential reduction in rents—all damaging the property’s valuation. The loss on property tax, which represents a large expense, will have less money for improving the property, leading property valuations downwards.

Danielle Hale, chief economist at, chimed in on the implications for the residential market in a statement obtained by The National Observer: Real Estate Edition, stating, “Given the weakness in the commercial real estate market, that’s not likely to resolve very soon… that’s going to put pressure on local governments to either cut back on spending or shift more of the tax burden to individual tax owners.” With homeowners already grappling with an affordability crisis, the knock-on effects of property tax increases do nothing to paint a rosier picture.

This post was originally published on 3rd party site mentioned on the title of this site

Similar Posts

    Your Interest
    Your Interest List is emptyReturn to Buying