One of the unforeseen impacts of the COVID-19 pandemic is how hot it has made the housing market. Some Milwaukee area residents may be priced out of their own homes or pushed toward bankruptcy if this trend continues.
Hot, Hot, Hot!
Moving is not a fun task during the best of times, so why are people clamoring to do so in the middle of a global health crisis? Two reasons: space and record low-interest rates.
As we all spend more time at home in order to avoid the virus, personal space becomes a hot commodity. People want home offices, a room for the kids to do virtual school, and a backyard to spend time in when the weather is nice.
Record low-interest rates also played a huge role in driving up home prices. According to the Wisconsin Realtors Association, “The 30-year fixed mortgage rate fell to 2.68% in December, which is a new record low. To put this in perspective, that rate is a full percent lower than 12 months earlier and almost two percentage points lower than two years ago.”
Prices Are Going Up, and So Are Taxes
These two factors have given a significant boost to the real estate market. “All regions of the state experienced an increase in sales during 2020. The strongest growth was seen in the North region, up 14.7%. There were four regions — Central, South Central, Southeast and West — that saw home sales grow between 6.5% and 7.4%, and the Northeast region grew by 4.6% in 2020.”
“When demand far outpaces supply, like it did this year, you get double-digit price increases, which is what we saw in 2020,” said WRA President & CEO Michael Theo.
Local municipalities have taken note of these price increases and rushed to reassess the homes in their area so they can rake in more tax dollars.
Putting Homeowners in Dire Financial Straits
“Some City of Milwaukee property owners are at a loss after getting their 2020 property tax bills as the city’s assessment commissioner points to rising home sale prices, particularly in neighborhoods like Harambee, Bay View and Riverwest,” according to a report from Fox 6.
The Fox 6 report talked to two homeowners who saw their property taxes increase by 61% and 37% respectively. As the gentleman whose property taxes increased by 61% noted, “It’s a lot for everybody in these stressed economic times.”
Your Milwaukee Bankruptcy Attorney
These astronomically high property tax increases put a lot of financial stress on families at a time when they can least afford it. They have pushed some families out of their homes and made others consider filing for bankruptcy.
Unfortunately, taxes are not discharged when you file for bankruptcy. But that does not mean that there is no way to get help if you cannot keep up with rising property tax rates. If you are in financial distress, the experienced attorneys on the Hanson & Payne team can help you figure out what your options are, and guide you forward. Contact us today to schedule an initial consultation.