How California Property Values are Being Affected by Covid-19
Property values in California rise and fall according to the current economy and real estate market. This past year has brought increased property values, even though Covid-19 turned so many lives upside down. People who have lost their jobs are going to find that paying their property tax California is difficult this year. And other people will be surprised that their California property tax assessment didn’t decrease like they thought it would. While homeowners are being affected in so many ways, business owners are also feeling the heat. Every business owner must pay their business property tax California bill, even if their business has been shut down for months.
How California Property Values are Being Affected by Covid-19
The property values of homes and businesses in California have not fallen in the past year, despite mortgage rates hitting historic lows. Since many people are taking advantage of the new lower mortgage rates, property values in the state are actually beginning to rise. There are a few reasons for this. However, the main reason is most people are willing to pay more for a new home, since the interest rates are so low.
The real estate market finished strong in California at the end of 2020. The number of homes for sale in California was low for the entire year. But that didn’t stop the median housing price from hitting a record high. The homes on the market sold quicker than ever before at more than asking price.
Currently, it appears that the trend we saw at the end of 2020 will continue for at least the first half of 2021.
California’s Housing Forecast for 2021
- Property Values Will Continue to Soar as Median Housing Prices Rise
As we mentioned above, houses were selling for more than asking price, despite the effects of Covid-19 in the economy in 2020. While no one knows for sure what will happen, Zillow predicts that prices of homes will rise another 5% before summer. The only areas of California that won’t see the rising housing prices will be those that have been affected by the wildfires.
2. People Will Move from Urban Locations to the Suburbs
After a long year of social distancing, people are ready to move to the suburbs. Everyone wants to get out of the city and have wide open spaces to enjoy. No one wants to stay inside their apartment anymore. They want to embrace their own backyard and neighborhoods, where they can sit outside and take long walks.
3. Lower Mortgage Rates
The mortgage rates in California will continue to be low in 2021. These rates will allow some people to afford the higher priced homes. However, those people who have lost their jobs will still find it difficult to secure a mortgage on any home.
4. Increased Sales of Homes
Even though the prices of homes will be higher, the number of homes sold will increase by a lot. People moving to the suburbs will drive these housing sales, as will the lower interest rates.
Take Advantage of Proposition 19
There are no signs of California property tax assessments going down. That is not good news for those who need to pay their property tax California now. The only people who will see any relief are those who are eligible for Proposition 19.
Proposition 19 is a law that went into effect on February 16, 2021. Any homeowner who is at least fifty-five years of age can transfer the property value of their current residence to a new primary residence. In the past, the new residence had to be smaller than the old one, but that is no longer the case. Homeowners can even construct a new primary residence and take advantage of their old California property tax assessment.
Anyone who wants to use Proposition 19 will want to do the transfer as quickly as possible. While you have two years to complete the transfer, there are penalties if you wait that long. If you choose to wait, you must add the excess fair market value of your new residence to the assessed value of your old residence. The total amount of the two values will be the California property tax assessment you will need to pay each year.
This new law also includes people who are disabled and those who have been a victim of a wildfire or other natural disaster.
How to Avoid Penalties on Your California Property Tax Bill
Thankfully, you can avoid paying the penalties on your property tax California bill if you pay late. There is a form you can fill out to have the penalty fee cancelled. You can find the forms online, but you must pay close attention to which one you are printing out. The forms are only available for specific payment dates.
When you mail in your form, you must include the full payment of your property taxes minus the penalty fee. There is not a guarantee that your penalty fee will be waived, but so many people have been successful this year.
We recommend including supporting documentation when you submit your form. This documentation will be used to see if you actually qualify for having the penalty fee waived.
Supporting documentation can include:
- A hospital release form that indicates admission date
- Notification from employer stating employment release due to Covid-19
- Notification from employer stating business closed or reduced hours due to Covid-19
- Documentation showing owner is unable to conduct business due to Covid-19
California property values have not decreased this year like many people thought. That is not the news so many people wanted to hear, especially after losing jobs and having so many businesses shut down. Since a California property tax assessment is not going to decrease due to Covid-19, almost everyone will need to pay their property tax California like they do every other year. The bad news is some of those tax payments will be even higher, despite the trying times many people are going through.
