Although the U.S. has endured a slow recovery since the economic bubble burst, properties are regaining their price values. For those who are no longer under water, this may be a sign to sell and relocate. The important question you’ll face is what are the best home markets and why. There are plenty of experts who look at property cost increases as the best measure. But, you may want to broaden your thinking when it comes to your next move.
Rethinking Home “Value”
When real estate agents say “location, location” they often have it wrong. Location can be an indicator of home price, but not necessarily value. For example, Rhode Island enjoys a wide variety of mini housing markets. You can buy a 4-bedroom, 2-bath home on an acre of land in a semi-rural area for about $250,000. In these sparsely populated towns, tax assessments come with high “percentages.” If you bought that same home in one of the small cities, the location tab could jack the price up to about $500,000. The property tax percentages would be lower, but the dollar amounts higher. The same home in the capital city would easily exceed $1 million and the taxes alone could be more than the monthly mortgage payment in a semi-rural town. While quality of life and location are factors, “value” should also measure amount of property at a given price and the actual tax dollars involved.
Outside Austin, Texas
The Lone Star State is an interesting case study in home markets. On the one hand, Texas ranks among the highest in property tax percentages at about 1.90. On the other hand, it also ranks as one of the least expensive cost of living states. Add into the mix that Texas has a vibrant economy and no personal income tax, and you may be on to something.
Given that Austin stands as one of the state’s cultural and economic hubs, neighboring semi-rural areas like Round Rock provide an amazing quality of life and are considered the most affordable places in the state to live. With lower property prices comes lower actual tax dollars, only minutes from big city perks.
Florida looks like a middling state in terms of home value and property taxes. From percentages to median home prices and actual tax dollars, Florida ranks around 27th. What boosts its value portfolio is the fact that it, like Texas, has no personal income tax.
One of the state’s key areas is Jacksonville. Like Austin, it’s a culturally diverse city with the St. John’s River flowing through it. Property costs in the city and neighboring areas run below the state’s average and that means low payouts in property taxes. Sunshine, beaches, sports and jobs in a place where you can get a large property for less? Winning!
When people think about exciting Georgia cities, Atlanta usually leads the discussion. But Savannah has quietly emerged as a home and lifestyle beacon. Its casual walking-town atmosphere is flush with parks and historic buildings. The state is a major agricultural producer and locals of the seaport have a saying: “Friends don’t let friends eat imported shrimp.” Yes, the food is amazing and fresh. But, for such a culturally rich small city, property values have not regained their pre-bubble levels and they are quite inexpensive. The tax situation is even more astonishing.
Savannah has lowered or maintained its mill rate every year since 1994, with the exception of 2010. And, local politicians express frustration when they cannot lower taxes even more. Talk about having your heads screwed on straight. It also enjoys a low cost of living rating and an excellent arts scene centered around Savannah College of Art and Design. The upwardly-mobile economy still leans on tourism. However, major area companies are showing growth and more are putting down roots. Combine terrific quality of life, low property prices, low taxes and jobs, and that’s a winning formula.
In terms of getting good home value, take real estate agent advice with a grain of salt. Factor in quality of life, actual tax dollars and best bang for your buck. You wouldn’t pay the large pizza price for a small. Why should your home be different?