Important
News
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Property Taxes and the Real Estate Market By |
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| Due to the present downturn in the real estate market and the ongoing media coverage of it, property owners believe there has been a severe loss of market value in property values in our township. The property tax system is a complex process, and when one adds in the currently challenged real estate market, the process becomes even more difficult to understand.
Despite the reports of housing values plunging downward, foreclosures at an all-time high, and homes simply not selling at seemingly any price, property taxes continue to rise. This is a very challenging concept for property owners to accept. Many homeowners must feel that our office is not properly reacting to market conditions. The Assessor is responsible for assessing property at one-third of the fair market value. Properties are valued as of January 1st of each year. However, the county and the state monitor assessor values so that values throughout the county and state are equitably assessed. The formulas that are used to measure our accuracy and equity always include consideration of actual sales over a three-year period as required by law. Therefore, when our office valued properties for January 1st, 2009, we were obligated to look back at the sales that took place during 2008, 2007, and 2006. We are not permitted to just look at the marketplace that existed on January 1st, 2009. Below is a chart of the sales activity in Bloomingdale Township for the past six years. As you can see, the market was in a rising trend during 2003, 2004, and 2005, but in 2006 and 2007 it appeared to stabilize. In 2008, we experienced the first real decline in the median sales price of homes. Additionally, the law does not allow our office to consider non-arm's-length |
sales, such as foreclosures or short sales made under duress.
All of this simply means that there can be no immediate reduction of assessments based on the available data and current state laws that govern the property tax system. For 2009, we will be obligated to look at sales from the years 2006, 2007, and 2008. The 2005 sales will drop out of the statutory three-year sales study, which should allow assessments to stabilize (meaning no increase in assessment for the 2009 assessment year). If the current market trend continues, we can anticipate a reduction in assessments in 2010. Most importantly, everyone should understand that regardless of what happens in the marketplace, even if assessments were to be reduced this would not mean that property taxes would go down. Please remember that property taxes pay for local services such as schools, parks, police, and fire protection, and if these local taxing units continue to provide services and increase spending, then property taxes will continue to increase. Please know that our office is painfully aware of the challenges being faced by those who are trying to sell their home in this very difficult market. We will continue to monitor the sales activity in our township and calculate the assessments based on that market, as measured over a 3-year period as required by state law. For the assessment date January 1, 2010, we will look at sales in 2009, 2008, and 2007. We hope this bulletin helps explain the assessment process and how it relates to current housing market conditions. |
| YEAR | NO. OF SALES | MEDIAN SALE | AVERAGE SALE | SALES RANGE |
|---|---|---|---|---|
2004 |
2386 |
210,000 |
234,139 |
60,000 to 1,240,000 |
2005 |
2860 |
231,000 |
254,750 |
70,000 to 1,350,000 |
2006 |
2846 |
230,000 |
248,449 |
78,500 to 1,275,000 |
2007 |
1797 |
230,500 |
252,300 |
72,000 to 1,350,000 |
2008 |
1155 |
215,000 |
242,720 |
70,000 to 1,250,000 |
2009 |
1151 |
183,900 |
205,330 |
59,000 to 935,000 |