Happy New Year to all! I trust everyone has had their share of holiday snacks and beverages; created their resolutions for this year (and have not broken too many of these yet 😊) and have a game plan for goals and priorities for 2022.
I certainly have had my share of the above. I may have partaken so much in the snacks and beverages they have literally materialized on my footwear! (Okay, a slight exaggeration, but take a look and you tell me!)
This leads directly into resolutions – less eating, less drinking, more exercising… Boring, boring, boring. If this forces my footwear to become nothing more than bland blue or black, NO THANK YOU! Bring on the pizzazz and more drinks for everyone!
Looking Forward to 2022
In all candor, I am very excited about the year in front of us and our abilities to assist owners of commercial real estate, tangible personal property and private railcars. As I have mentioned in previous postings, the pandemic has been a boon to certain aspects of the real estate market and a severely negative impact in others. How will the jurisdictions handle their valuations for the upcoming year?
Certainly, school districts continue to need more funding and as more than 70% of property taxes collected directly flow to the schools, there is pressure to maintain (or increase) valuations for this year. Reports indicate that although consumer spending has increased during the 2021 year, the numbers have not reach pre-pandemic levels. Various economic forecasts believe 2022 will be another challenging year and we may see numbers below pre-pandemic levels again. Factor in the Federal Reserve’s estimate of three interest rate increases, it is hard to imagine the real estate market continuing to soar as it has the past several years. Capitalization rates in many sectors will begin to increase, which may adversely affect real estate values. We have seen increases in idle capacity for machinery and equipment in the manufacturing sector and we continue to monitor the number of railcars in storage, due to a reduced demand for sand, coal and other goods.
Of course, the flipside could be true as well. The Omicron variant may peek very soon and subside as quickly as it ascended. If workers stay diligent and vaccinations increase, the economy will benefit and manufacturing, retail and other markets will see a significant benefit. The one constant? Taxes. And in my case, property taxes.
Owners will continue to be resourceful in ways to minimize operating expenses and an annual review of their property tax valuations is (and should be) a part of the annual business game plan.
As always, we are here to help. If you would like to address your property tax needs, please reach out to me directly at firstname.lastname@example.org or email@example.com. Both companies are here to help and we look forward to another year together!