Market Values are down, but Cherokee County Tax Appraisals are up?? Hmmm…

I bought a new home this year – a foreclosure in my own neighborhood. I got a great deal after months of haggling with the bank and couldn’t be happier in my new home. Then my tax bill for 2009 came a few weeks ago and I almost fell out of my chair at what the county had assessed my property at…$160,000 higher than my actual purchase price, and $20,000 higher than 2008’s tax value. Now, I know I bought a foreclosure and got my home for less than market value, but $160K difference? And on top of that, an increase in value from 2008?? That was a little too much to take.
 
So, like any good Realtor, I pulled some comps in my neighborhood to see some exact prices on recent sales. The highest priced 5/4 full basement home that has sold in my neighborhood in all of 2009 is still $100K less that my assessed value (and pretty much right on target with where I think my home should be valued). Aren’t the tax assessors looking at the same comps I am? How on EARTH did they come up with that ridiculous number?? I called the tax assessor’s office and they said I can appeal for next year, but not for 2009 since I wasn’t the homeowner as of January 1st, 2009. Miffed, I put my post-it note up on my desk reminding me to file my appeal before April 1st of next year.

I wondered how the market could be suffering so, but somehow Cherokee County’s tax office was unfazed by the crash! I suppose the County government is immune to the slump. Then, I read an article posted in the AJC talking about exactly my situation! Due to the collapse of the Real Estate market, home values have plummeted but tax values had not followed suit. The AJC researched 550,000 properties across Metro Atlanta and found that the tax appraisal was grossly higher than what the market value of that home would be, meaning thousands and thousands of homeowners are unfairly paying more taxes that they should. Hmm…I guess it’s not just Cherokee County’s government that’s immune to the drowning economy!

Still, while tax values are (in some cases) ridiculously high, county tax assessors lowered values on 450,000 properties – an unprecedented reduction in tax revenue by $4.3 Billion. Cobb reassessed 12% of homes, Gwinnett 28%, Dekalb 47%, Fulton 56%, and Clayton 86% (ouch). But, for many homeowners, the reassessed value is still not a true indication of the market value. The AJC quotes, “Tax officials don’t dispute that, but they say they were reluctant to lower values as much as sales dictated because they worried about the resulting evaporation of tax revenues. And they simply didn’t believe values so low could possibly reflect the market.”

Didn’t believe values so low could possibly reflect the market?? Umm…I have a HUD settlement statement showing the “true” value of my home – the true value is what a buyer is willing to pay for it! I guess the tax officials are living in a bubble, don’t listen to the news, know nothing about foreclosures saturating the market, and are looking at a whole other set of comps from what I am looking at. Maybe they should hire a few local Realtors to help them out with their valuations…

OK I am off my soapbox now