House Values Drop – will property taxes?
According to the National Association of Realtors prices dropped 2.7 percent in the fourth quarter and that is on top of a 1 percent drop in the past year. That’s a 3.7 percent drop in the past year nationwide. With the number of houses for sale and coming onto the market as a result on continuing foreclosures the prices will drop some more. The Indianapolis market is ranked number 4 in the nation in foreclosures. Most recent MIBOR statistics show Hamilton County home sales down 23.1% in September 2006 compared to September 2005. According to the Washington Post in an article on Dec 29,2007 the current decline over the last 12 months in a 10 city index is 6.7%. They also state “Compounding this adverse trend is the fact that the rate of price deterioration has been getting worse.”
This brings up a very interesting question. Our property taxes are based on the assessed value of our homes. If the market shows a decline, will the assessment go down? OK this government, unless we the citizens force the issue I doubt in fact by some strange sense of reasoning they will go up instead. In Maricopa County, Arizona the county assessor has stated some owners will actually see their vales go down this year. In California you can file out a form and claim the reduction based on assessed value reductions.
Let us assume for a minute, no just a second, our assessor lowers our values by 6.7%, what will happen to our schools and governments. They are going to be hurt quite a bit. Fishers is already spending beyond its means and this will put them in a lot of trouble, our school district may have to stop before building its new administration building. I have a novel idea, put the admin people in trailers instead of students. FEMA has a lot of them for sale cheap.
If you and I have to slow down spending we do, if governments get less money they raise taxes. Anyone want to take a bet – if assessed values go down, they will file for a tax rate increase?
If the home values continue to drop maybe we should start to put pressure on the assessors to lower our values. Maybe we need to put pressure on the local government to slow down. Fishers could stop spending money on lawyers and experts to fight Geist. The odds are they are going to spend a million dollars in this fight.
Hopefully our assessor reads this and takes action without us having to picket their offices and file suit against them. Wouldn’t that be fun a class action suit against the assessors?
Now if our state government can get its act together and accomplish property tax reform, the ups and downs of value of the housing market will not have such a major effect. We can always hope.