I bet I’m not the only property owner in Fairfax County, Virginia to do a double take this week. I opened up my 2005 property assessment today to find out that my house is allegedly worth $94,045 more than last year. That’s right: my modest three-bedroom, one car garage house is now worth $454,250.
In 1993 we paid $191,000 for the house. This means in one year my house appreciated more than half the cost that we paid for it.
Does that strike you as just a little strange?
Apparently it shouldn’t. Residential properties in Fairfax County, Virginia averaged a 23% increase in assessments compared with 2004. Perhaps we got off cheap. My house had only a 21% increase.
Still my mind reels. Last time I checked our net worth was about $560K. In one year without working any harder we are now worth about $660K. At this rate in five years we’ll be a millionaires. But somehow when that occurs (and it is only a matter of when) I doubt we’ll be eating caviar for dinner every night. In fact our lifestyle will be pretty much what it is now. It may actually be worse. (More on this in a moment.)
Because of course we have all this net worth but we can’t really spend it. Because we have to live somewhere. We won’t be able to do much to leverage this new wealth unless we move into a trailer or find some modest housing far away from metropolitan areas. And although $454K for our house seems like I have a lot of money in many communities it doesn’t buy squat. If I were to move to San Francisco I probably wouldn’t be able to purchase a condominium with it.
There is no doubt that Fairfax County is a desirable place to live. There are lots of high paying professional jobs here and I live within 3-10 miles from tens of thousands of them. Our schools are excellent, our crime is low and our industry is virtually all tech. No belching smokestacks here in Fairfax County. And we have our standards. We don’t permit ugly billboards like in neighboring Prince William County.
And although my house is modest my neighborhood is laid out just right. Unlike many of the newer subdivisions that surround us our houses are not supersized. Our lawns are usually at least a quarter acre, but not so large as to require a lawn tractor. Most of the time you don’t hear your neighbor. The houses are a bit bigger than those in the neighborhood where I grew up, but not that much.
So yes we were fortunate. We bought at an excellent time (we had our pick of homes during the Bush I recession) and profited from our location and the inevitable growth in the population.
Even so, $94,045 in appreciation in one year?
What’s the downside? Property taxes, of course. Last year my property tax bill came to $4073. The new property tax rate is going to be $1.03 for $100 of assessed value. That’s $.10 per $100 of assessed value less than last year, but I can do the math. With my new assessment that’s $4678 a year, an increase in $605 from last year, or about another $50 a month.
I’m certainly all for funding the county adequately. I know we have lots of needs, including huge costs for quality schools, transportation etc. The proposed county budget is 4.47% higher than in 2004. In addition to getting more money from property taxes, the county also proposes to hike a bunch of other fees. Starting April 1st, a trip in an ambulance will cost you $300-$550, plus a $7.50 a mile transportation fee.
I am also aware that the state is not exactly generous in the money it gives to counties. Subsidies for public schools haven’t really kept up with inflation. To maintain the decent level of services that us citizens demand the difference has to be made up somewhere. So the county does it in the form of highway robbery ambulance fees and property tax rates that are routinely a point or two above inflation.
It’s beginning to dawn on me that I may not be able to afford to live in my own house once I am retired. Unless my mortgage is paid off I probably could not afford to indefinitely pay $500 or so more each year in additional property taxes. I will either have to keep working (assuming I am able) or downsize my life.
There must be a fairer way to collect taxes. Perhaps county income taxes would be fairer. I don’t feel like we should stick it to those of modest or low incomes. But neither should people like me have to indefinitely keep increasing their income to be able to afford to stay in their own home. Right now my wife is unemployed. I figured we could continue this situation indefinitely. But now I’m wondering if she must go back to work at some point simply to keep a roof over our heads.
All this and we will soon be millionaires. At some point I may be a millionaire eating hot dogs.