Colorado homes have generated a ton of equity the past two years, which should leave their owners in a better mood — at least until property tax bills come due in April.
The value of residential properties in the state stood at $700.9 billion on June 30, 2016, according to a biennial study from the state’s Division of Property Taxation.
Two years earlier, assessors valued residential properties in Colorado at $560.2 billion, according to an April 2015 version of the same study.
That works out to a difference of $140.7 billion, or a bump of 25.1 percent, although some of that gain comes from new home and apartment construction.
That represents around $25,784 per Colorado resident, but renters, who represent about 36.4 percent of households in the state, don’t share in it directly.
Whether the result of rising stock values or home values, the “wealth effect” tends to leave consumers feeling more secure and willing to spend, said Gary Horvath, a Broomfield economist.
“It makes for a better environment. You have a better balance sheet, so if you want to invest in something else, you can,” he said.
In Horvath’s case, his family extracted some of their home equity to help cover college costs, which will allow his children to graduate with less debt than might have otherwise been the case.
Higher home values also make it easier for mortgage borrowers who run into financial trouble to sell property, and that has contributed to Colorado having some of the lowest delinquency and foreclosure rates in the country.
Every two years, assessors in Colorado’s counties look at sales data and estimate the value of a wide range of property types.
The information is then used to calculate the ratio of property taxes that residential property owners will shoulder and what owners of commercial, industrial, farmland and other types of business property must take on.
The residential assessment rate was crafted to maintain or lessen the tax burden on homeowners, and it will drop from 7.96 to 6.56, which will keep property tax rates from rising as fast as home values.
But homeowners in many parts of the state should budget for higher property taxes in 2017, 2018 and beyond.
Jefferson County had the highest percentage increase in its residential property values, which went from $56.9 billion in the April 2015 report to $83.02 billion in the January 2016 report.
Other places with a jump in residential property values the past two years include Boulder, Broomfield, Denver, Weld, Phillips, Elbert, Chaffee, Adams and Arapahoe counties.
Only Huerfano, Otero and Lincoln counties had property values that were estimated to be lower in the summer of 2016 than they were two years earlier.
Assessed values for non-residential properties represented more of a more mixed scenario. They declined from two years ago in nearly two dozen Colorado counties, with the sharpest drops occurring in Garfield, Cheyenne, Clear Creek, Rio Blanco and Las Animas counties.
Lower commodity prices since 2014 have weighed on the value of mineral holdings and farmland, contributing to lower property values in some parts of rural Colorado.
