Property Tax Appeal Blog (80)

Georgia Property Tax

The Georgia Association of Assessing Officials (GAAO) has released their 2012 Legislative Policy Statement. In the Policy Statement they urge the Georgia State Legislature to act on matters that they consider important to Georgia property tax. The Policy contains five main priorities:

1. Alternatives to Artificial Limitations of Property Tax Valuations - In this the GAAO is concerned that recent legislation compelling the assessors to set the tax values on sold properties at their sale price with result in inequitable assessments. For the same reason they are also concerned that the legislature will place a cap on assessment increases.

2. Correcting Valuation Errors / Statute of Limitations - The GAAO doesn't take issue with the state-wide three year refund for errors that existed for at least that long. However, they are concerned that the various counties are using different lengths of time in which to correct errors. They are encouraging the General Assembly to create a single three-year statute of limitations for the discovery, auditing, and correction of assessments.

3. Digests preparation efficiency and Simplification – The GAAO is concerned that many changes in the law have made it harder for the counties to comply with state law and submit a property tax digest in a timely manner.

4. Property Tax Exemption Applications – In this the GAAO is recommending that exemption applications be submitted by April 1 for the tax year that the exemption is sought. Currently the law is vague on a deadline.

5. Standardized Assessment Administration and Practices – Here the GAAO is concerned that the services the counties obtained from the state Department of revenue are being significantly reduced by elimination of a state property tax levy that funds the department of revenue.

As a former tax assessor employee and a property tax consultant I see no problem with these requested changes from the GAAO. Anything that simplifies the Georgia property tax code so that it is easier for everyone to understand is a good thing. If you have any questions about Georgia property tax please contact us at www.fairassessments.com.

Atlanta Property Tax Appeals Redux

What goes around comes around, and value weakness just won't go away. Nationally, house prices fell for the 6th straight month in October, and Atlanta house values had fallen approximately 9% from January through October. Although sales of existing and new homes are up from the depths of the recent recession (assumes that you feel it is over) and mortgage rates remain at historic lows, lending standards are still tight by anyone's standards. With all house listings competing with distressed sales value pressure is still, well, distressing.

Mr. Shiller, of Case-Shiller house price index fame, thinks residential values could fall another 10% during 2012. Foreclosure rates remain high and banks are still catching up from the robo-signing scandal from a year ago. The market may yet be flooded with even more vacant foreclosed houses. Recent house price data shows that Atlanta, and several Midwestern cities such as Detroit and S. Louis have declined at a faster rate than they did during the recession.

Atlanta House Values Decline

The most recent S&P Case-Shiller home price index shows that Atlanta area house values declined 5% in October, after a similar decline in September. House sale prices fell more in the Atlanta area than any of the 19 other metropolitan areas that the Case-Shiller index covers. Compared to October 2010 values, Atlanta values have fallen 11.7% which implies that values in Atlanta were (overall) flat prior to this fall.

If you chose to appeal your Atlanta area 2012 property tax assessment there is plenty of time to get your evidence together. However, the effective date of appraisal for property tax purposes is January 1, and the market data used to establish a value as of that date is data from Before January 1. You will have to gather comparable sales data from the year 2011, and wait for 2012 tax assessment values to come out before developing an equity argument.

For help with your Georgia property tax appeals contact us at www.fairassessments.com

Relative growth in vacancy rates since the start of the Great Recession:

Atlanta Office Values

A class-A office building sold in Atlanta recently. Promenade Two, a 774,000 square foot building in Midtown was purchased by Cousins Properties. The reported sale price is $134,700,000 or $174 per foot. The building is 42% vacant. Jones Lang LaSalle reports that the vacancy rate in Midtown is 24.4% and that is the highest in the metro area. Net absorption was negative in the third quarter in Midtown. Jones Lang LaSalle report that the average office rent in Midtown is $23.75

The best properties in the best locations are still commanding high prices per foot. But with Midtown having the highest vacancy rate of all the Atlanta metro sub-markets can it really be considered a "best location" at this time? Perhaps. Vacancy rates are high in most markets and relatively speaking Midtown's vacancy rate isn't that bad.

Bifurcation. There's the top tier properties, and then there's everyone else's properties. If you think the assessor has your property in the wrong group don't feel singled out. There are a lot of other properties owners being associated with the Chosen properties (you know, the only ones selling) out there. For help getting the assessors to "see the light" talk to the property tax appeal professionals at Fair Assessments LLC.

Happy Holidays

Back from Thanksgiving with a cold, but all is well otherwise.

The S&P Case Shiller house price index dropped 3.6% for the year ended in September which was a larger drop than experts had predicted (3.0%). Of the 20 cities in the index 18 had a year ended September decline and Atlanta had the largest drop in house values at a whopping -9.8%. Much of the blame is being laid on lenders that have increased foreclosures recently and are adding to the inventory of available properties when there is already a glut and little demand.

Builders are on pace this year to sell the fewest new houses since record keeping began in 1963. 2010 was the slowest year ever for new house sales but it looks like 2011 will come in dead last. As noted above, builders are competing with a glut of existing inventory that is sitting, weighing on the market.

CoreLogic reported that over 1/4 of all mortgaged houses in the USA are underwater, or are close to owing more on their mortgage than their house is worth. Homeowners with negative equity are more likely to have above market interest rate mortgage loans. This makes perfect sense since most underwater homeowners cannot pony up additional funds to create 20% equity needed to refinance now. Those that are not upside down are more likely to have enough equity to refinance.

That was a quick autumn. December is here and the air has turned crisp here in Atlanta. The assessor's effective date of appraisal is just 31 days away. Gather your market data before it slips away and prepare for your 2012 appeal. For assistance with all of your property tax appeal needs contact fairassessments.com

Residential Property Tax Appeal News

Fannie Mae says that consumer confidence is still cause for concern regarding the housing market. Fannie Mae economists are projecting that 2012 home sales will be only slightly higher than this year. Construction was up in September, but it was primarily due to apartment construction. Home builders say that it is still very difficult to compete with all of the distressed properties on the market.

It was recently announced that the Federal Housing Administration (FHA) is getting low on reserves and may need to go to the Treasury for more money. Adding to the worry it was reported that more than 30% of all mortgage modifications made by FHA in 2010 defaulted again within a year. Foreclosures on FHA insured loans declined in September but this was attributed to the slowdown in foreclosure processing due to the robo-signing scandal.

Lender Processing Services (LPS) recently announced that mortgage delinquencies declined in October to 7.93% of outstanding loans, which is down 2% from September and 14.6% from a year ago. LPS information shows that approximately 6.3 million properties are in foreclosure or are 30 days delinquent. The states with the highest percentage of delinquent loans are Florida, Mississippi, Nevada, New Jersey and Illinois.

Fitch has data showing that home values have fallen 7% over the past year. They say that now brings the total decline in housing values nationwide to 38% since the peak. Fitch believes that home prices have not reached the bottom and they expect prices to fall another 13%. They blame the continuing weakness in home values on high unemployment, stricter lending standards, and the glut of distressed houses on the market.

The assessor's effective date of appraisal of January 1 is approaching quickly. Do you know where tax rates are headed in 2012? Do you know what's happened to values in your market area? Here at Fair Assessments, our job is to know the real estate market and know how to save you money. If you own residential real estate in Fulton County, DeKalb County or Gwinnett County, Georgia we can help you with your property tax appeal.

Commercial Property Tax Appeal News

CoStar recently reported that their commercial property sale price index had a 0.9% increase in September over August. Accounting for the increase were the still recovering retail real estate sector and the red-hot multifamily sector. Distressed sales accounted for 25% of the sale transactions used to calculate the 0.9% increase. Nondistressed property prices rose 2.3% for general properties and 1.9% for all commercial properties. Distressed properties continued their sale price decline. Costar said that the multifamily sector index increased 2.1% during September and had been up 7.3% in the second quarter. The multifamily index has increased a total of 12.3% since the market bottom and has outperformed all other property types.

Shadow Inventory and the FHA Time Bomb

There is much variation in the estimate of the number of homes currently in foreclosure and those that are seriously delinquent. As I noted in a previous blog post Lender Processing Services estimated that the number of delinquent and foreclosed properties was approaching 6.4 million. Different real estate research companies have differing ways of estimating this number however, and the estimates range from 1.6 million to 8.2 million delinquent mortgages. Capital Economics estimates that the shadow inventory is 4.3 million homes and they call this a cautious underestimate. They say that with 4 million homes waiting to be eventually added to the supply of properties for sale it will take 18 months to clear both the visible and shadow inventory of homes.

Atlanta Apartment Market Shows Signs of Life

The stalled mixed-use project called 12th and Midtown is about to see some new construction. All over the country the apartment market is doing very well because very few people can get mortgage loans to buy houses due to increased lending standards or they just refuse to buy because they think housing values have further to fall. This is been boosting occupancy and rent in apartment communities nationwide. Atlanta, of course, has not been immune to this trend. The vacancy rate in Midtown Atlanta has fallen to 7.2% in the third quarter, which is down from an 11.4% vacancy rate in the third quarter of 2010.

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