Home Front: How assessor slashes property values
By Jim Wasserman
This week the Sacramento County Assessor’s Office – and more like it across the great foreclosure belts of California – chopped property values again on nearly everything built in the housing boom.
The value slashing in Sacramento County that started in 2007 with 50,000 properties and 90,000 last year, reached 170,000 in 2009. That’s nearly every lot carved from a pasture and turned into a new house since 2002 – or even earlier depending on where you live.
The good news: Your property taxes go down. The bad news: Well, don’t even look.
Home Front caught up Thursday with Assistant Sacramento County Assessor Kathleen Kelleher for a few questions about the new values.
Your office reduced values for tax purposes on 170,000 properties. How many of those are houses?
Basically all of them. There are about 500 commercial properties. The rest are residential.
How’s this actually done?
We use what we call sales-ratio trend analysis. It’s a development of time-adjusted facts based on market sales. It is largely a computer analysis. We have a staff of 60 or 70 appraisers right now. We wouldn’t be able to value 170,000 properties (personally) plus do our other work.
People often go to Zillow.com or Cyberhomes.com to look up their home values. Where does the county’s assessed value fit into the question of, "What is my house worth?" Would real estate agents use your number to assign the house a value when listing it?
I really can’t answer for them, but I doubt it. They’ll probably go to their own analysis of what the market is doing.
Do people appeal these low values, arguing their house can’t be worth so little?
I don’t think anyone has gone to an appeal hearing on that.
This is the first time since 1978 that assessed values have gone negative from one year to the next. You’ve been in the office 22 years. Did you ever expect to see anything like this?
Is this year the worst of it?
I really don’t have a great answer for you on that one.
Banks try loan alternative
Fresh news on loan modifications: Nonprofit loan counselors say they’re seeing more banks try an alternative to writing down principal. That’s the industry term for permanently reducing what homeowners owe. Borrowers love it; banks don’t.
Pam Canada, executive director of Neighborworks Homeownership Center of Sacramento, said this week some banks are agreeing to temporarily cut the amount owed.
Here’s how it works: If a borrower paid $300,000 for a house that’s now worth $200,000, that borrower can get the loan modified temporarily to make payments based on the $200,000 value. Then the other $100,000 is deferred – added back onto the loan five years from now, or when housing values rebound. A borrower might pay off that $100,000 after refinancing or selling. Canada said it’s an emerging short-term fix that keeps people in homes and keeps banks from having to forgive so much of what’s owed them.
Poll: Own home still dream
Survey of the week: 67 percent of Americans believe owning a house is still the "aspirational symbol" of the American dream.
So says a Harris Interactive survey of 2,122 adults – 71 percent of them homeowners. The May national online survey conducted for Delaware-based savings bank ING DIRECT also found:
• 42 percent of Americans think bigger down payments in recent years could have prevented some of the current economic downturn.
• 37 percent would consider making mortgage payments twice a month to pay off their homes faster.
Rates back at six-week lows
Finally, benchmark 30-year fixed mortgage rates have returned to six-week lows. Average rates early this week fell to 5.20 percent (before points), said federal mortgage giant Freddie Mac in its weekly Thursday survey. That’s down from 5.32 percent last week.
The firm said rates haven’t been this low since the week of May 28, when they averaged 4.91 percent across the U.S. Freddie Mac economists attributed the continuing decline to "market concerns over a weakening labor market."
Personal finance Web site Bankrate.com reported overnight averages Thursday of 5.33 percent for 30-year loans.
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