Impact of COVID-19 on house assessments may take years to appear

COVID-19 has left a lot of economic markers in its wake, but one of the last pockets of the economy where it may appear is in property assessments.
Assessments are done in a two-year cycle. The Pinal County Assessor’s Office finished its assessments for 2021 in March. Next March, staff will begin working on 2022.

While some areas of the economy, such as unemployment, are shaky in the short term, “it is stable revenue for the county,” said Assessor Douglas Wolf.

The CARES Act suspended foreclosures during the pandemic, but they could begin showing up in six months to a year if, in fact, Pinal County property owners suffered serious economic meltdown.

“If we have a lot of foreclosures, and I don’t think that’s going to happen, it could have an impact,” Wolf said.

“Impact,” he said, means negatively affecting assessments by 3%-4%.

The last time assessments took that kind of hit was in 2008. There is no direct comparison with the COVID-19 pandemic, he said, because even when foreclosures finally begin appearing, the banks still pay the taxes.

In the case of the 2008 recession, “There were so many even the banks couldn’t keep up,” Wolf said.

And there was a lot of speculation in the market in those days, whereas now most buyers are just looking for a place to live, he said.

What could also play into future assessments are unknowns such as the general market and decisions by the federal and state government that could affect the local economy. Wolf said that is why he supports the county’s ongoing lawsuit against the U.S. Office of the Treasury to force Gov. Doug Ducey to distribute federal COVID-19 funds to Pinal and other counties.

The local market could also be affected by the collection of the transaction privilege tax. But TPT, also known as a sales tax, has remained strong in Pinal County through the pandemic.

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This item appears in the June issue of InMaricopa.