Appeal season is underway around the country and there is an abundance of anticipation. Mostly due to the similarities between the Great Recession of 2008 and the recent pandemic. Will reductions in assessments compare to the decreases experienced in the years following the 2008 recession?
The gap between market values and assessed values is greater now compared to 2008. This gap makes it more difficult to justify a significant reduction in property taxes. The overlying indicator is the minimal transactional volume leading out of the pandemic. There is little proof that values decreased substantially.
Transactional volume slowed in the 2nd and 3rd quarters of 2020. Momentum picked up leading into the balance of the year. Industrial, multi-family and self-storage lead the pack in aggressive performance. There was very little in the way of distressed transactions and this continues to be the case. Hospitality has made a nice rebound in the leisure sector, while core business hotels are still lagging as the country opens up from the pandemic dormancy.
The economic recovery has been a pleasant surprise considering the uncertainty faced just a short year ago. Money was on the sideline, ready to be deployed. Coupled with the federal stimulus, this has accelerated the revival. The sentiment in appraisal districts is that we are back to normal. This has added to the difficulty in substantial tax reductions.
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