The Virginian-Pilot
©
CHESAPEAKE
Average home values have fallen by 6.35 percent, and more than 70 neighborhoods across the city experienced double-digit declines in residential real estate assessments.
Overall assessments, including commercial and industrial properties, are about 5.5 percent lower than they were last year, according to figures released by Chesapeake Real Estate Assessor William Rice.
Because of the falling assessments, Chesapeake officials say they were already expecting about $10 million less in real estate tax revenue next year as part of a $23 million budget gap. With city leaders calling for no new taxes or fees this year, the gap will likely lead to reduced services and lost jobs at City Hall.
It is only the second time since 1990 that Chesapeake has reported a decrease in overall assessments. Last year, the average decrease in assessments was about 1.79 percent, a stark reversal of the double-digit value increases of 2005 and 2006.
As is the case in Norfolk, many of Chesapeake’s biggest home-value drops came in higher-end neighborhoods.
“High-end product built at the end of the boom,” said City Councilman Rick West, who is also a real estate agent. “Bought high, sold low. If you look in these subdivisions, you’re going to see McMansions for the most part.”
Just as many Chesapeake property values skyrocketed in 2006 — residential assessments increased an average of 28 percent that year — a majority of Chesapeake home and commercial property owners are experiencing decreased assessments this year.
South Norfolk and Deep Creek home values showed the smallest declines of the city boroughs.
The biggest average home value drop came in the city’s Butts Road borough, which includes new developments off Mount Pleasant Road and Centerville Turnpike. Many neighborhoods in Great Bridge and Hickory also experienced declines.
Cooper’s Creek, a high-end subdivision near South Battlefield Boulevard and Whitehurst Road, had an average assessment decline of 19.8 percent — one of the largest drops of any Chesapeake neighborhood. Properties in Cooper’s Creek that were listed for more than $600,000 in 2006, for instance, sold two years later for under $500,000.
“Neighborhoods who sold right at the top of the market are showing the larger decreases in value today,” Rice said. “People who have to sell are selling for what the market will dictate.”
The number of existing homes sold in Chesapeake dropped to 1,225 in 2009 from 2,654 in 2006, according to Rice’s report. The average sales price for a new Chesapeake home dropped from $402,352 in 2008 to $360,028 in 2009. The city mailed out assessment notices Monday.
City officials say they have been counting on a decline in real estate revenue as they are formulating a budget.
“The feeling with council is, we’re going to cut services,” West said. “We’re not going to increase the tax rate. If that’s the will of the citizens, that’s where we’re going.”
Read the Chesapeake assessor's 2010 report here.
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Home Assessments
I think the residents of Chesapeake should sue the city because they went off a real estate forecast from California in 2006. People who are upside down in the housing market cannot sell, or refinance their homes. To me, it is a toxic housing market. I think the city should go by what was paid for the houses. If we have to go by the city's assessment, why do we have to pay for appraisals. The City of Chesapeake is just like bankers because all they want to do is make money. The residents of Chesapeake need to band together and protest this unfair burden on taxpayers and write our senators and complain. The Wallstreet meltdown helped to cause this problem and they should help the homeowners out with the stimulus money received plus the interest they earned from taxpayers. This is a national disaster for homeowners. If the city or sentators cannot help, we need to vote them out of office. This is not a democratic, republican, or conservative problem, it is an american problem.
Bankers should be making the tax reduction case to govt
Tbritt: you are on the right track. Take this to the logical conclusion. Yes we can vote the taxing pols out--but there's a more economically rational approach. We lobby the bankers to lobby the government to lower taxes on "their" property!! Yes, anyone of us who has a mortgage REALLY is co-owner with the financing bank--so IF (as many are) choosing to strategically default on their mortgages, it's the bank who is stuck with paying taxes!
So, if continuously raising property taxes in a declining economy/real estate market pushes folks to their limit--fight back effectively--hand over the property! Let the bank lawyer fight the tax man!
See ezinearticles.com/?Understanding-Strategic-Defaults&id=3554146
Mine went up!!!
We moved into our home in Culpepper Landing (Deep Creek) in the 4th Qtr of 2009. I received my new assessment on Tuesday and the City increased by $10,000! It went up! I'm ok with it if its because its a new neighborhood....but my problem is that my current assessment is only 15 weeks old. What did the city learn in 15 weeks for my home to go up $10,000...and oh by the way the city lost at least 1 maybe 2 weeks of that time because of the holidays and snow!
Great neighborhood, i recommend it, but geez Chesapeake. I mean we don't even have mailboxes yet and you're already increasing our assessment
Mine went up!!!!!
Careful what kind of mailbox you install....could increase your assessment even more.
It`s too crooked
It`s a conflict of interest to have the city or county do the assesments on property that they are going to tax! The tax value of the house should be what it was sold for or valued the last time that it changed ownership! That is the only thing that is fair at all! You have older folks on fixed incomes that could not keep homesteads because of the super inflated bubble in the past! It was wrong then and now to do the way it`s being done!
Market Value last sale plus percentage
Wow. Even Crook (Cook) County IL taxes largely the most recent sale price.
Again, I was shocked to learn that the "formula" (giggle) for tax assessments rely more on the "neighborhood" value than that of the individual home. In 2007, I learned that on top of the percentage increase in the "neighborhood value", the assessor uses an "insurance company" like valuation program that asks what kind of floors (hardwood) for example, and other interior "quality" considerations (which is really crazy). Never let the assessor into your house. Back in crook county where I'm from (same as our president), the assessor relies on the last sale price and major renovations (building permits) that changed the footprint of the home, plus some additional minor factor for over-all neighborhood. This spares the long term residents (seniors) and taxes more heavily the folks that have made additions (increasing square footage) to their property.
Mortgage Escrow increase
BOA carries our mortgage. Received a "shortage escrow" notice from them for 85.00. Plus they're increasing my mortgage payment by almost 100.00 per month stating that it is for expected property tax increase. Told them the city sent me a statement lowering my assessment by 35,000 and their response was that the city told them there's going to be a tax increase. So loan officer at BOA called the city assessment office and they said we'd have to wait until July 1, 2010 to see. So, my mortgage is going to be an extra 1200.00 per year (less 84.00 for expected HOI, even though I haven't heard from insurance company about an increase). I just don't see how the assessment can drop by such a large amount and the mortgage company justify an increase in my mortgage. Any advice would be greatly appreciated. Thanks.
Forgot to add the link
In order to justify the resettlement amount, they would need to KNOW what the tax rate is going to be ahead of time -which is of course doubtful. All the language here in the act talks about the servicer being able to add a cushion and other limitations, but its too steep for me. My mortgage company goes by previous tax year in its estimates. See section 3500.17
http://www.access.gpo.gov/nara/cfr/waisidx_09/24cfr3500_09.html
RESPA laws apply
Real Estate Settlement Procedures Act (RESPA) is the federal law which dictates how lenders establish and maintain an escrow account. It sets limits on the amounts that a lender can require you to put into an escrow account for purposes of paying taxes, insurance and other charges related to the property.
RESPA Laws Can Be Changed
RESPA laws can be changed if there is public outcry.
Again, another example of how 'asset" owners will be penalized in this next phase of "phased in socialism"--taxing the "rich" . Next, the proposal to reduce (cap) the tax deduction for mortgage interest.