The Virginian-Pilot
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NORFOLK
Real estate tax assessments next year will be based on sales data that city officials say will more accurately reflect market prices.
After discovering that the city is using sales data six months older than the figures other local cities use, the City Council instructed Real Estate Assessor Deborah Bunn nearly three months ago to determine what she needs to use fresher numbers.
"We can do exactly what you've asked us to do," Bunn told the council on Tuesday.
She said she will need three temporary clerks to handle what she anticipates to be a flood of phone calls after assessments are mailed out next March. Currently, assessments are mailed out over several months rather than all at once.
She said her office will also need a larger sitting area to accommodate people who come in to talk about assessments. City Manager Regina V.K. Williams said her staff is working on both issues.
Previously, assessments that go into effect on July 1 have been based on sales data as much as 24 months old. Beginning July 1, 2010, the data will be based on the 2009 calendar year, meaning data will be 18 months old at most.
Bunn said the task of updating data will be laborious this year. "But once we get it done, it will be much easier to do from now on," she said.
Because of the time lag in assessments, the housing slump has not completely been reflected in assessments. Many taxpayers have complained that they are paying taxes on assessments higher than market values.
Bunn said housing prices are now rising again slowly in Norfolk after declining for nearly two years.
"I don't know whether the increase in prices we're seeing now is cyclical, or whether it will drop some after the rush" of the spring and summer selling seasons, Bunn said. "Experts have opinions all over the place."
Councilman Don Williams, a retired residential real estate developer, said housing prices are rising far more slowly than they fell.
"The market is not going to come back as fast as it has dropped," he said. "It's going to rise gradually."
Regardless, Mayor Paul Fraim said: "We want our assessments to reflect the most current data available."
Harry Minium, (757) 446-2371, harry.minium@pilotonline.com
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i may be a conspiracy theorist...
but this six-month period they are skipping over (7/1-12/31/08)is probably the absolute bottom of the local market). The transition period therefore needs to be eighteen months in order to capture all comparable sales.
As to the foreclosure-sale issue, it's another ruse the keep assessments jacked up as far as I'm concerned. A sale is a sale is a sale - if the property is worth more, the sale price would have been higher. A house on my street sold for 60% of assessment (and not even a foreclosure) but it wasn't counted as a comp. I have contested this, and am waiting on a resolution.
Please help me understand
Sorry, but this story doesn't "connect the dots" for me.
The assessor would need to hire extra staff to field calls if the assessments go up, right? Yet if they're using old data (whether it's 18 months or 24 months old), the assessments will lag behind any market rebound, right?
Someone, please help me understand.
Brilliant Move By Norfolk-Really
They have had assessments based on high prices that existed 2 years ago. Home prices started falling in 2008 and were down drastically all of 2009. They continue to be down but will likely start moving back up slowly-maybe this year.
Norfolk is skipping an entire year of low assessments, jumping to 2009, probably the market bottom and will soon see prices rising again. This way they avoid a year of low assessments - ie all of 2008.
They jump from high prices assessments (two years ago) to the end of the housing downturn in 2009!
I hope they aren't doing this to be fair to homeowners because otherwise they need to use 2008 prices in 2010 and 2009 assessments in 2011.
Band-aid solution
Correct me if I'm wrong, but the Norfolk Assessor's office already completely disregards distressed and discounted sales (i.e. forclosures) when assessing your home's value. And if there haven't been any homes sold in your area, it just reaches back through the archives to prices of the real estate boom to find "comparable" sales.
What they need to do is change this practice and considering ALL sales and foreclosures in tax assessments, instead of just deciding to use data that is slightly less obsolete to overvalue your home.
mob accountants
Appraisers are not unlike mob accountants...they give the figures that whoever is paying them wants. City assessments will be the same, and there's no way the city is spending so much money and effort to LOWER taxes. maybe it's time to move.... and set fire to the house on the way out of town....
Appraisers versus Realtors
“"Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” Larry Yun, NAR chief economist said. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected."
What's that all about? Felix Salmon points to this Floyd Norris piece, which lambastes Yun, for basically speaking out against mark-to-market pricing, when it comes to housing:
Given that a significant part of the housing problem was caused by appraisers who signed off on exaggerated home values, it takes a lot of nerve for the realtors to demand that appraisers now ignore market prices in order to let them sell houses. “Distressed and discounted” sales are real, even if they are inconvenient.”
Taken from Joe Weisenthal, The business Insider
City appraisals Inflated out of Greed
Most of the homes in my neighborhood were worth about two hundred thousand dollars three years ago. A few people in the neighborhood remodeled their homes with all the finest new bells and whistles; copper gutters, marble floors, granite counter tops, jacuzzi baths, and then sold them for perhaps a little over the three hundred thousand dollar mark. This was during the height of the home value bubble and local realtors were telling us that soon they would be worth much more. A few of the remodels sold and the city said that since the tax appraisal for homes is based on recent home sales, that now all of the homes in the area were worth over three hundred thousand dollars whether they had been remodeled or not. This was done by the city out of sheer greed to collect exorbitant property taxes and now the disastrous result is obvious.
NORFOLK NEEDS TO UPDATE THEIR ONLINE ASSESSMENT DATA
Right now! It's disgraceful how technologically inept Norfolk's website is when compared with the rest of Virginia. Norfolk residents should have detailed access to residential property assessment calculations, without question. Their current setup is despicable, and warrants a class-action lawsuit against the city of Norfolk. Let me tell you why- I discovered I had been paying over $400 in unjustified taxes because they had an incorrect, inflated square footage in their calculation of the "Improvement Value" of my house (3000>2650). But to find this out, I actually had to go to the municipal office to request this data, after which I received no apology when I brought it to their attention. On top of that, it took them almost a full year to correct their records! How long this had been going on? How much did I get ripped off? Who knows? Anyway, had I lived in any other city on Hampton Roads, I would have been able to determine the accuracy of their records with ease just by logging on. We need to force Norfolk to act on this, because I can virtually guarantee that there are hundreds of houses within the city being improperly taxed.
If the assessments properly
If the assessments properly reflect the market value of the homes, then most of them will go down 30%+, right?
Wow
What a concept.