I have a prediction: there's going to be an absolute crap-storm when Forsyth County does its property tax revaluations, whether it's this week or in two months. The county commissioners heard last night from the fellow in charge of doing the revaluations and he told them that he'd heard from an expert that because they'd already announced the revaluation schedule there was nothing in the state's statutes that allows them to delay the revaluation. After reading that my first question was, "Is there something in the statutes that disallows them from delaying the revaluation?" But after mulling about it a moment more my second thought was, "Even if they delay it six more months will it make that big of a difference?"
Here's my rationale. They did a good thing by waiting for all the 2008 data to be in before doing the revaluation because the real estate market tanked in the last part of the year. That said, from what I've read they only use sales data to determine the property value which means that there's no way to capture the actual loss in the value of our property. In other words if the houses in my neighborhoods can't sell, and I mean literally can't because there are no buyers out there, and the most recent sales occured earlier in the year how is the assessor going to see that houses that sold for $250,000 last March would only fetch $215,000 this March? Also, as I argued in an earlier post, if they take the average of the sales over the last four years, and there were hundreds of sales at the higher prices from 2005 through 2007, but only a handful at the lower 2008 price then the prices will be skewed higher.
All this leads me to the following: the revaluations do a better job of capturing an increase in property value because increased prices generally occur in a hot market with lots of sales. As more sales occur the prices rise and they push the valuations up. But when a market cools prices might fall but they aren't reflected in the valuations because no one can sell their houses thus the losses in value are hidden. I might be able to claim that the realistic market price for my house is only a certain amount, but since there's no empirical sales data showing that houses in my neighborhood would sell for that, because there are very few or no sales, then as far as the assessor is concerned my property value is frozen at the higher rate. My valuation may not have gone up any more from its high, but it almost certainly hasn't gone down to the true market price.
That's why it doesn't really matter if the revaluation comes this month or in July. For all intents and purposes our property values are frozen at an artificially high amount. If the commissioners really wanted to be fair they'd talk about lowering the tax rate, but since they're staring budget deficits in the face there's a better chance of me becoming Pope than that happening. Another thought: why not do the revaluations every year? That way you can adjust to any rapid rise or fall in property rates and set taxes on current market values. I think residents would prefer either of those proposals to the current system. I'm not saying they'd like it, they'd just hate it less.
