As home prices plunge, property assessments questioned by some
March 3, 2010 | 0 comments
The volatility of the housing market has led some Wauwatosa homeowners to question their 2010 property assessments, but city staff says as a whole city property values are off no more than 5 percent above or below fair market value.
The 150 to 200 residential property owners asking for assessment reviews are concerned by the amount they are paying in taxes or their inability to sell a home.
One of those people is Joe Heder, who filed for assessment reviews in 2009 and 2010 on his property at 2641 N. 117th St. His Cape Cod-style home with three bedrooms and a bath and a half is assessed at $252,000, but he believes it should be brought down to $205,000 based on what potential buyers have been willing to pay.
"I've been fielding offers in the $180,000 to $205,000 range," he said. "I'm assessed to a point that I can't sell my house for that assessment."
Heder has successfully had his assessment decreased twice in past years, but last year the city Review Board voted not to lower it again.
"I filed again this year because the property values are falling again in my neighborhood based on the property sales," he said, adding that he has dropped literature at neighbors' homes and posted on Web sites like Craigslist to urge other Wauwatosa residents to contest their assessments.
Numbers in range
So far, roughly the same number of property owners are questioning their assessment this year as did in 2009. It's far below the amount of review requests received in 2007, the year following the last citywide revaluation, City Assessor Steve Miner said.
At the time of the last revaluation, the market and assessed values came into balance. Then the market values shot up dramatically during a housing boom. Now the market values have come back down again.
"Generally speaking, what happened to your property happened to everyone else's property," City Administrator James Archambo said.
State laws stipulate that assessment values must be within 10 percent of fair market values at any given time or a revaluation is required.
On the aggregate, property values are less than 10 percent off, but some individual properties or neighborhoods may warrant adjustment, Archambo said.
For the most part, recent discrepancies have been condition-related. Perhaps the homeowner put on new siding or updated the kitchen, or, on the flipside, maintenance might have been put off.
Sales data skewed
While Miner declined to talk specifically about Heder's case, he did say that assessors do typically look to property sales as the best evidence of value. The problem in today's market is that few properties are being listed and fewer are selling, especially in the $200,000 range or higher.
It's the lower-priced housing that is moving, likely because of new homeowner tax credits, city staff said.
Heder also included foreclosure and distress sales into the average selling price of his neighborhood, saying they are legitimate sales and have an impact on the values of surrounding properties.
However, assessors are not supposed to use sales with undue influence like when owners need to sell for cash quickly so they have money to live on. Valid "arm's length sales" have fully informed buyers and sellers and typical home financing methods, Miner said.
The market is completely unpredictable at this time and assessors across the state are seeing skewed sales numbers, Miner said.
If someone browsing the real estate market could get a significant bargain - say $180,000 for a $252,000 home - people are going to become seriously interested in buying, especially in Wauwatosa, city staff said.
Home sales in Wauwatosa
| December 2008 | December 2009 |
Year of 2008 |
Year of 2009 |
|
| New listings | 26 | 33 | 878 | 827 |
| Closed sales | 27 | 23 | 484 | 481 |
| Median sales price | $199,900 | $210,500 | $210,000 | $195,000 |
| Percent of original list price received at sale | 88.2% | 91.8% | 93.9% | 93.1% |
| Average days on market | 85 | 73 | 75 | 77 |
Source: Multiple Listing Service
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