Dropping home values may not accurately reflect market / LJWorld.com

Archive for Wednesday, November 25, 2009

Most tax bills in Douglas County this week reflect a 2 percent to 4 percent drop in home valuation. A home for sale in West Lawrence is advertised at below appraisal price, a sign that the economy is still struggling.

By George Diepenbrock

November 25, 2009

When Douglas County homeowners received their tax bills this week, most of them likely noticed a 2 percent to 4 percent drop in valuation — even though the federal home buyer tax credit has helped breathe life into the local real estate market.

That’s because the current tax numbers are based on information gathered nearly 10 months ago — the value of a home last January.

Earlier this year, Douglas County officials feared property values could plummet further, meaning an unprecedented time in the Lawrence market that included two consecutive years of reductions in property values. But since October, the market has stabilized as the federal $8,000 tax credit for first-time home buyers has kept real estate agents busy.

“I’m still leaning that direction that it’s not going to be as bad as what we thought it was early in the year,” County Appraiser Steve Miles said.

Federal lawmakers also recently extended the tax credit, so buyers now have until April 30 to get a house under contract plus two months to close. Rob Hulse, executive officer for the Lawrence Board of Realtors, said the extension means things will likely keep churning in the real estate market at a time that is traditionally slow.

“Here we are two days from Thanksgiving, and we’re busy,” he said. “We haven’t been like this in the last couple of falls.”

According to Board of Realtors data, 107 homes were sold in October, which was up from 80 homes the same month in 2008 and 81 homes in October 2007. The average sale price last month was $184,106, compared with $172,218 in 2008. It’s still below the $214,635 average price in 2007.

In total sales, November is also looking better because the board projects that the sales of more than 110 homes will close, compared with 69 in November of last year.

Hulse said the economy also seems to be turning a corner, making people more optimistic.

“I think it’s pretty clear we’ve hit bottom, and now we’re headed for recovery,” he said.

The first half of property tax payments are due Dec. 20. Because that day falls on a Sunday this year, the deadline is extended to Dec. 21, a Monday.

Discussion

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25 November 2009
at 7:46 a.m.

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neuhofel (Anonymous) says…

The executive officer for the Board of Realtors thinks it's home values are going to rise in the near future and it's a good time to purchase a house… what a shocker!
25 November 2009
at 7:55 a.m.

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BigPrune (Anonymous) says…

In Lawrence you can buy a brand new house for $50-$60,000 less than you could last year. Since the county is devaluing everyone's home, does this mean our property taxes will go down? I doubt it.

These are not good times to be selling a house or paying on a house that isn't worth what it was just last year. Basically you're p*ssing your money down the drain.

Douglas County's housing values are going down while every other major metro area in Kansas are going up. Why is that?
25 November 2009
at 8:08 a.m.

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BigPrune (Anonymous) says…

Additionally, I was told that in order for someone to sell their house, they need to price it at what the County valued it in the year 2000. So 9 years of appreciation is kaput.
25 November 2009
at 8:45 a.m.

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bangaranggerg (Anonymous) says…

Jason Todd is the luckiest Realtor in Lawrence, the main pic for the website is basically his business card.
25 November 2009
at 8:51 a.m.

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slaboribs (Anonymous) says…

Has anyone EVER heard ANYONE in the Real Estate business say that it is a bad time to buy a home?
25 November 2009
at 9:18 a.m.

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prospector (Anonymous) says…

“Hulse said the economy also seems to be turning a corner, making people more optimistic.

“I think it’s pretty clear we’ve hit bottom, and now we’re headed for recovery,” he said.”

“pretty clear” Ha
Fiddle away there Nero.
25 November 2009
at 9:53 a.m.

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srj (Anonymous) says…

What's bad about the property values notices is the lower income houses will stay about the same, the higher priced homes will drop many percent.

25 November 2009
at 9:55 a.m.

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sherlock (Anonymous) says…

Lawrence Kansas–where the real estate taxes are the highest in the state! Are the appraisals hypervalued?
25 November 2009
at 10:05 a.m.

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livefoniks (Anonymous) says…

*waves hand* These are not the droids you're looking for.
25 November 2009
at 10:06 a.m.

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ksarmychick (Anonymous) says…

The values that the county is using are way over inflated. We paid $111,000 for our house last November. Was apraised at $121,000. Douglas county refuses to drop the price for taxes down to the $121K, instead they are forcing us to pay taxes on it with it valued at $143K. We tried to appeal it last year, twice. And will be appealing it again this year. The county is just money hungry and could care less about screwing over the home owners.
25 November 2009
at 10:20 a.m.

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Godot (Anonymous) says…

These first time home buyers are over paying for their homes; they probably do not have the skills to negotiate, and probably do not really care because they do not have any “skin in the game.” They only have to put 3.5 percent down, and then are using the $8,000 credit as down payment and for closing costs. Then, they are being approved for housepayments that are equal to one third of their monthly income.

Many of these homes will be in foreclosure by next year. But, why worry? We taxpayers are guaranteeing their loans.
25 November 2009
at 10:26 a.m.

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OzChicklet (Anonymous) says…

BigPrune (Anonymous) says…

In Lawrence you can buy a brand new house for $50-$60,000 less than you could last year. Since the county is devaluing everyone's home, does this mean our property taxes will go down? I doubt it.
________________________________

I got my tax valuation yesterday, and my property taxes went down.
25 November 2009
at 10:32 a.m.

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BigAl (Anonymous) says…

My property taxes went down also. And, my value is much higher than in the year 2000.
25 November 2009
at 10:38 a.m.

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UNIKU (Anonymous) says…

“Jason Todd is the luckiest Realtor in Lawrence, the main pic for the website is basically his business card.”

If the sign in the picture had a SOLD sign on it maybe — but this house has been on the market a long time….
25 November 2009
at 11:42 a.m.

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average (Anonymous) says…

@sherlock - Not sure how you're figuring that Lawrence has the highest property taxes in the state. Many places in the state have mill levies much higher (notably the smaller counties trying to support community colleges). The data by county information is here:

http://www.ksrevenue.org/pvdstatistic…

As for whether we're over-appraised, that's certainly possible.

25 November 2009
at 11:48 a.m.

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avoice (Anonymous) says…

The county is putting out the propaganda to defend its plan to raise real estate taxes through next year's valuations. Those will come out in the spring, and the county has already decided that they're going to need to raise the values in order to quickly raise their revenue. The other option for increasing revenue is, of course, increasing the tax rate. But that would take a while and maybe even require some kind of approval. It's easier this way, especially since most of us sheep won't bother to jump through the hoops required to protest the valuation. And even if we do, they get the chance to browbeat us during the interview into accepting whatever their office says our property values should be.
25 November 2009
at 12:30 p.m.

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monkey_c (Anonymous) says…

The reason why home values in Lawrence are decreasing while they are going up in the rest f the state is pretty simple. The increased cost of purchasing a home in the rest of kansas has risen slowly and steadily in the past few decades, the inflation stayed very much in line with expected growth and the national market for similar communities. It even correlated in some way with the cost of construction. Lawrence on the other hand had a ridiculous, sky rocketting not helathy, not normal increase in Real Estate values. Why? It was considered a nice place to live. But the reality is that it's not THAT nice. So now while the rest of the market recovers and slowly rebuilds strength the Lawrence market is still looking for a comfortable and reasonably stable level. The county made a practice of increasing it's appraised value every time that a home sold. They wanted the tax revenue in spite of the fact that they should have known those were not stable values. So the price skyrocketted, the county valuation didn't miss a beat in skyrocketting right along with prices, and now the whoel thing is a mess and I would venture to say that most of the home values per the appraisers office are too high, particularly if it was bought or sold anytime between 1998 - 2005.
And of course according to the head of the Realtor Association it will always a good time to buy, no matter what. I'm pretty sure he/she/it would get fired if they said anything to the contrary.
25 November 2009
at 12:57 p.m.

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ilovelucy (Anonymous) says…

This thread makes me wonder just how many of the posters are actually in the business. If you were, you would understand what is going on with tax values in Dg County.
1) Lawrence is considered a declining market in the real estate industry. Therefore, getting a loan on a home is twice as hard.
2) Real estate values ARE down this year. BUT because of the fact that Lawrence is known for it's “business unfriendly” attitude, many businesses and industry have chosen to move or not to move into Lawrence. Unemployment is high, but services have not decreased. And people bitch and moan when there aren't enough police and fire employees, bad streets, sewer systems, the list is endless. Because the city still has to provide these services, the tax base/mill levy has risen. The money has to come from somewhere.
3) If you think Lawrence's property taxes are high, I suggest that you look at Topeka, Wichita and KC. They are much higher than Lawrence.
4) As long as Lawrence loses businesses and industry, this trend won't change. Quit whining and start inviting business, bottom line. Nothing will change until we can start attracting jobs, plain and simple.
There, I'll get off my soap box. Happy Thanksgiving!!
25 November 2009
at 12:58 p.m.

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MyName (Anonymous) says…

This is probably as good a time to buy a home as any, if you actually need a place to live and can get the bank to lend you money. But it's a terrible time if you're interested in a real estate investment.
25 November 2009
at 2:54 p.m.

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merrill (Anonymous) says…

What I hear on the news is that 23% of homeowners owe more than the value of their homes = not smart to pay “boom town economy” prices ever.

Boom town economies always crash then what?

During the oil crisis people from across the economic spectrum were walking away from their homes simply because they owed more than the homes would bring.
Lake homes were basically being given away.

Talk of the recession coming back harder after the holidays
is in the news. More people than ever will be out of work when holiday spending subsides.
25 November 2009
at 3:14 p.m.

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JackRipper (Anonymous) says…

“And people bitch and moan when there aren't enough police and fire employees, bad streets, sewer systems, the list is endless. Because the city still has to provide these services, the tax base/mill levy has risen. The money has to come from somewhere.”

We can thank the sprawl that came from lining developers pockets but leaving city and the homeowner the long term costs of the monstristious build over the last 20 years where the only thing that matter was getting the biggest thing a person could even if they didn't need 5 bedrooms and 4 baths just because it would maximize the easy money gains of housing as an investment. Most educated generation and this stupidity went on plus mortgaging the house to buy the boats and toys and maxing out the credit cards. And I'm sure these same types that justified it all, probably marching along with Palin in the belief that just what happened to us was from liberal programs will be filing bankruptcy as the game reversed on them and suddenly they are losing as much as they were gaining before. And what kind of homes did they leave for future generations. Well let's look at what's for sale. After looking does anyone know if an architect is required to design houses anymore because I'm not sure houses this ugly could have possibly been designed by someone with even grade school art education training!
http://lawrence.craigslist.org/reb/14…
http://lawrence.craigslist.org/reb/14…
http://lawrence.craigslist.org/reb/14…
http://lawrence.craigslist.org/reb/14…
http://lawrence.craigslist.org/reb/14…
http://lawrence.craigslist.org/reb/14…
25 November 2009
at 3:31 p.m.

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ilovelucy (Anonymous) says…

I really like the word monstritious. Never heard that one before. :-)
25 November 2009
at 3:36 p.m.

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JackRipper (Anonymous) says…

Yeah, I wondered about that myself after reading it after posting. Kind of snappy though.

25 November 2009
at 4:20 p.m.

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SFBayhawk (Anonymous) says…

“There is no clear, easy way out for housing,” said John Silvia, chief economist at Wells Fargo. “Contrary to my hopes, housing prices and the housing market in general will weaken again.”
25 November 2009
at 5:52 p.m.

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pace (Anonymous) says…

I called Hedges and wanted to talk about selling our extra lot, next to our home. The realtor told me no one was buying and no one was selling lots. I asked if he thought if we built a house on it, would it make it salable. We are tired of mowing. He said that no one would buy it. I suggested it might be a good time to get a builder, He said he thought they were all doing something else. I thought I would go up there and see if he was drunk, stupid or just a jack.
25 November 2009
at 8:25 p.m.

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toe (Anonymous) says…

The tax credit is preventing the market from correcting itself. I would not buy during this time, but if you need to sell and can rent, it might make sense. Real prices will be hidden while the credit is distorting values. Prices will be clearer a year from now after the credit has expired.
25 November 2009
at 9:27 p.m.

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Renaissance (Anonymous) says…

In defense of the city, I feel that this years property evaluations are actually right on par. I own a couple of properties in Lawrence and each of them was re-appraised this year pretty much right on with its real value. This was NOT the case two years ago. I think what a lot of people are calling a market recession is really just a much needed dose of reality. You shouldn't be buying a home unless you can put a considerable amount down. Period. That's reality, not a recession. The media wants you to think that mortgage companies won't give out mortgages anymore because of all the foreclosures. In reality, mortgages companies are still more than happy to give out mortgages, they are just realizing that giving out loans to people who clearly can't pay them back isn't a good business practice.
25 November 2009
at 9:40 p.m.

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barrypenders (Anonymous) says…

Once the last of the baby boomers die off, the productive folk in their wake will use their stimulus money to take the town/society to levels unseen in history.

Stimulus and Posercare lives

Darwin bless us all
30 November 2009
at 10:24 p.m.

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Pywacket (Anonymous) says…

Renaissance nailed it, IMO. Our Dg Co tax valuation did nothing but rocket skyward for 12 years, to the point where, if we had put our house on the market, we could never have gotten out of it what Dg Co seemed to think it was worth.

Having heard plenty of horror stories from people who tried to challenge such over valuation (and thus over taxation) and were effectively punished for their efforts, we just put up and shut up. I've been very pleased to see the value and the taxes drop for 2 years straight.

The house is still valued way higher than it was when we built it (and way higher than what we owe on it), but the drop has put it at a more realistic level. And we are happy to be paying lower taxes as a result.