Below is an article from the Oakland Press. It explains the problems we are having now in Ferndale. Without the Headlee Override.
Passing the Headlee Override will only magnify the problem!!
Property values continue to fall
John and Jane Doe (not their real names) took their Ferndale house off the market after five months when it became apparent a sale wasn’t in the offing.
“We kept dropping the price by $5,000 or $10,000 until people started looking,” Jane Doe said. Finally an offer came in at $107,500, but the deal didn’t close.
At that price, it would have been a steal. Built in 1915 and expanded over the years, the house offers 2,588 square feet in a beautiful neighborhood within walking distance of downtown Ferndale.
Ferndale has the highest tax rate in Oakland County and, in 2009, the couple appealed their tax assessment and got a slight reduction. Their newest assessment, though a decrease, puts the home’s market value at $167,000.
“So there’s quite a disparity,” Jane Doe said. “It’s nowhere reflective of what it could actually sell for.” (EMPHASIS ADDED)
All over Oakland County, property values are continuing to fall, an estimated 12 percent countywide for 2011 after nearly the same percentage in 2010. Job losses and foreclosures have combined to put a glut of houses on the market. Judging by the number of appeals in the last few years, homeowners have been taking a serious look at the assessment change notices that arrive each year in February.
Back in 2006, Rochester Hills resident Mark Avery was among the first to call attention to a looming problem. He took his concerns to his city council, where he received a cool reception. Five years later, he says tax assessments haven’t caught up with reality, “Not even close.”
“The basic case is very simple,” he said. “The numbers are too high for what’s happening, because the mathematics can’t catch up.”
Since 1994’s Proposal A changed the way properties are assessed, assessors have used a two-year sales study to help gauge the true market value of a home. That worked just fine until property values began falling. Assessors then switched to a one-year sales study to more accurately reflect conditions.
But there’s still a lag. When the bottom fell out of the market in late 2008, the sales study had already closed for the year. Avery contends that because of that, homeowners were overtaxed 25 percent in 2009 and continue to be overtaxed ever since
“Everybody should challenge” his or her assessment, he said. He’s even started a business to help other property owners do just that.
The appeal process begins each year in March, after new assessment change notices go out. Appeals start with the local Board of Review. Board of Review decisions can be appealed to the Michigan Tax Tribunal.
The number of appeals peaked in 2009, then decreased in 2010. In December, Oakland County Equalization Manager Dave Hieber said the county had $3.9 billion in property value under appeal, some still pending from the 2008 tax year. Those appeals include homeowners and large taxpayers like General Motors.
“There’s a bulk of appeals out there, no question about it,” he said.
Kelly Sweeney, CEO of Coldwell Banker Weir Manuel, thinks there will be fewer appeals this year because the assessing system is catching up with the market.
“State equalized values in most communities have started to go down,” he said. “So people are seeing the positive impact.”
Farmington Hills Assessor Mat Dingman said he expects the number of appeals to be about the same as last year, when his city heard about 320 appeals. In part, that’s because some assessments are up this year.
“What we’ve got going on is such a wide range of issues,” he said. “Some areas where we don’t have very many foreclosures at all, they’re doing fine.”
The foreclosure crisis has made property assessing even more tricky than usual. Though some sales of foreclosed homes are not included in sales studies, foreclosures do affect surrounding property values, Dingman said.
“If I’m going to sell my house, I’ve got to compete with them,” he said. “Until that house is off the market, my house is influenced by that.
Also complicating matters this year is the fact that the inflation rate is up for the first time in three years. State law allows assessments to rise with inflation. The shorter sales study period also means assessors have fewer comparable sales.
“You don’t have all the data that you’d like to have,” Dingman said. “It’s not an easy thing to do in this time. And every sale has a story. You have to try and do the research and see why this home sold for what it did.”
Sales of comparable homes are crucial in assessing, and just as important for homeowners who want to appeal their assessments.
“You want to go in with your comparable homes, and you want to get private sales,” Avery said. “But here’s the problem; in some locations there are no private sales.”
His advice? Do your homework.
“Find the best comparable sales,” he said. “You are guilty until proven innocent. The number they (assessors) have, you have to prove it’s not right.”
Oakland County and local assessors are trying to make preparing for the Board of Review easier this year. Hieber said the assessment change notices will be easier to read, and a lot of information will be available free online at www.oakgov.com/equal.
Dingman said his city will have a lot of data available at his office and will assist property owners preparing for the Board of Review.
“Look at sales with a critical eye like we do,” he said. “Just because a property sold, look deeper into it. Should the rest of the city be based on that sale?
“People are getting better at it. … They’re doing the homework. They’re coming in with data. A lot of it is because more data is available.”
- Oakland County will offer three seminars on the property appeals process. They are Feb. 16 at Novi City Hall, 45175 West 10 Mile; Feb. 24 at Oakland Community College’s Lila Jones-Johnson Theater, 739 South Washington in Royal Oak; and March 2 at the Oakland County Board of Commissioners’ Auditorium, 1200 North Telegraph, Pontiac. Each seminar is from 7-9 p.m. Call 248-975-4417 to reserve a seat.
- On Feb. 16, Coldwell Banker Weir Manuel will offer a free property-tax appeals seminar at the Birmingham Community House, 380 South Bates from 6:30-9:30 p.m. Topics will include: Differentiating between State Equalized Value, Capped Value and Taxable Value; Explanation of the uncapping process; Breaking down the appeal process at local and state levels; and How to read and interpret Property Assessment Notices for 2011. RSVP by e-mailing firstname.lastname@example.org.
We will also be listing links and possibly be teaching people how to appeal property taxes here in Ferndale. For more info please watch this blog.
PLEASE VOTE NO ON THE HEADLEE OVERRIDE TAX INCREASE IN MAY