A few years back, during the “real estate boom,” property assessments rose to reflect the new market conditions. Now Jasper County Assessor John Deegan said it’s time for valuations to come back down.
In a press release issued Tuesday afternoon, Deegan said residential property owners throughout the county will see decreases in their property valuations, retroactive to Jan. 1. He said the overall change will be about 5 percent on dwelling values.
“We are addressing the declining real estate market and people will get a notice in the mail soon to reflect the change,” he said.
Deegan said falling property values is old news, as they have been falling for the past few years. He said property values lag market conditions, meaning reduced values take time to impact the assessment cycle.
“We follow the market, we don’t set it,” he said. “This office reappraises property every other year, and the value for 2013 showed a loss in value over the prior year. There was a value loss of $52,202,610 in residential dwellings from 2012 to 2013. The amount of foreclosures and short sales in the county have increased, which discount real arm-length sales at the same time.”
Deegan said a common misconception when real estate values are decreasing is that homeowners’ tax bills will also decrease.
“In theory this should be the case, but assessed values are nothing more than a yardstick for a municipality (schools, cities, and county) to collect an appropriate amount of taxes to sufficiently cover the local appropriation budgets,” he said. “A municipality must collect a certain amount to cover expenses and a reserve, no more, no less.”
Deegan said the bottom line is that when housing supply is very high and demand is low — as is the case now with the number of local homes vacated by foreclosure and relatively tight financing and economic uncertainty — residential prices will fall.
“There are general economic principles such as supply and demand that influence the value of real estate,” he said, adding that once residential values begin falling for macro-economic reasons, they tend to fall a long time.
Deegan said the change in valuations will apply only to residential property; other classes may see different changes.
“The annual reviews of residential properties have shown a declining market value,” he said. “We make every effort to revalue in a good or declining market. I hope the future looks better than the past few years; we all want our biggest principal investment to appreciate.”