Since the COVID-19 pandemic began, there have been rising home prices. According to Fannie Mae, they’ll continue to climb by 11.2% this year and expand at a more modest rate in 2023.
So what exactly do these rising home prices mean for you as a property owner and your estate?
Higher property taxes
When home values go up, so do property taxes. While it’s possible to appeal a property tax increase, it can be challenging to convince the tax assessor. To successfully reduce your property tax bill, you’ll need to compile home sales data of comparable houses in your neighborhood at lower price points. Since home price increases are so prevalent, you should consider preparing for and budgeting for any property tax increase that may come your way.
More home equity
Since home values have risen nationally, you may have a record level of equity at your disposal. Now maybe an optimal time to tap into your home’s equity through a home equity loan or a home equity line of credit (HELOC). You can use the funds to renovate your existing property, expand your real estate portfolio, or invest in other wealth-building strategies.
If you have rental real estate, now may be time to unload a rental property. Selling your rental property may be appealing if you don’t have reliable tenants or simply no longer want the responsibility. If you put your property on the market, there’s a possibility it will sell quickly for the top dollar, given the current housing market. If you decide to sell your primary home, you may have to pay more to live in a comparable property.
The need for more property insurance
As your home equity rises, so does your net worth. You may want to purchase additional property insurance coverage before someone sues you for an event on your property. You might want to explore umbrella coverage or increase the coverage on your current policy. Fortunately, you can buy an umbrella policy that offers $1 million more in coverage. This policy is on top of what you already have on your homeowner’s insurance policy.
Consult your Financial Professional
A financial professional can help you determine how to take advantage of the rising home prices and how they may impact the value of your estate. Together we’ll help you review your financial situation and determine the ideal strategy for your unique goals. Contact us today to get started.
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