Housing

YS home appraisals remain steady

Property values in Yellow Springs stayed steady despite a more than five percent county-wide drop over the last two years, according to a recent Greene County appraisal. This triennial re-appraising by the Greene County Auditor’s Office will keep local home values intact and maintain funding levels for the Village and school district even while it preserves the current tax burdens of local property owners.

Appraised property values fell just 0.84 percent in Yellow Springs while declining 5.6 percent in Greene County since 2008, according to the auditor’s initial estimates, released this month. The appraised value of village property fell by $748,890 over the last three years to about $88.9 million, not including new construction.

In contrast, values dropped by 8.92 percent in Fairborn, 7.18 percent in Xenia, 6.71 percent in Bellbrook and 4.73 percent in Beavercreek, according to the auditor’s office. Montgomery County values fell 7 percent.

Villagers should begin to receive tax re-appraisal notices from the county this week.

However, real estate sales figures, which are the basis for the mass appraisals conducted by the auditor’s office every three years, told a slightly different story. The village’s median home sales price plummeted from $196,000 in 2008 to $162,500 last year, a 17 percent drop. At the same time, the number of sales fell by nearly half their annual average, from about 50 to 23 in 2010. Last year fewer homes were sold in Yellow Springs than in any time since the mid-1990s, according to local RE/MAX Victory realtor Rick Kristensen.

But in 2011 the village real estate market may have rebounded, with 20 sales and five pending to date and a median sale price of $182,000 so far. Kristensen estimates an end-of-year sales total of 30 homes. Most encouraging for a strong market is that homes have appraised — and sold — in the higher end of the price spectrum.

“[The re-appraisal] is an observation that Yellow Springs is pretty stable in its value,” Kristensen said in a recent interview. “I know Yellow Springs is going to be fine going forward. If you look at the history and getting through the last few years, fewer houses have sold, but that didn’t mean the property values were largely affected by it.”

However, appraiser and local resident Ron Stickelman said that the county’s re-appraisal for Yellow Springs is optimistic and that the county’s model breaks down in the unique local housing market because many homes here are distinctive in their style, age and size.

“By saying our values are stable, the county is a little optimistic compared to what sales are doing,” Stickelman said. “The county has always struggled with values in Yellow Springs.”

How homes are appraised

The county’s re-appraisal affects the effective tax rate for property owners and the amount of money flowing into the local school district and Village government coffers as well as to the county. Levies that have been voted on, called outside millage, are unaffected by re-appraisals, as they generate a fixed amount of money or cost taxpayers a fixed rate. But inside millage, which counties, municipalities, school districts and townships can levy without voter approval, is affected by changes in property values.

For most local property owners, the recent re-appraisal will have little impact on the amount of taxes paid, unless they recently purchased a home. On the plus side, the local real estate market may continue to recover as buyers are attracted to the more secure investment of a home in Yellow Springs.

“If I were purchasing, I wouldn’t want to be purchasing in a declining market unless it hit the bottom,” Kristensen said. “It’s more predictable when it’s stable.”

Village Council member Karen Wintrow said that the re-appraisal is good news for the Village.

“From the standpoint of the Village if property values stay stable, that helps to stabilize our property tax income,” Wintrow said. “I think it speaks well of the village that for whatever reason at least our property values are staying high.”

Every three years the Greene County Auditor’s Office completes a mass re-appraisal of its 70,000 properties to determine how much tax should be assessed. This year’s triennial appraisal, to determine tax payments for 2012, is done by looking at the sale prices for recent valid home sales within a given neighborhood among comparable properties (square footage, style, number of floors, etc.). Every six years, the county visits each property for a more accurate appraisal and completes an exterior and, if granted entry, an interior inspection.

Real estate appraisals to determine the market value of a home are also completed by appraisal firms to secure a mortgage loan from a bank. Both are based upon comparable sales, but the county’s mass appraisal is more heavily dependent on a mathematical algorithm applied to sales, according to Stickelman, an appraiser of 35 years.

While the county only includes in its model valid sales between a willing buyer and a willing seller in the open market, foreclosures and other distressed sales affect the price nearby properties can sell for, making it harder to determine accurate values, Stickelman said.

Appraisals in Yellow Springs

Yellow Springs’ unique character, which is attractive to home buyers, has kept housing values relatively high here, according to County Auditor David Graham.

“It’s a case of limited supply and demand: there aren’t many new houses being built and people want to live there,” Graham said of Yellow Springs, adding, “We try to be as fair as we can.”

Graham said that he also aims to protect subdivisions. “My goal is to appraise property for what I think it’s worth.”

The real estate market was never as distressed in Yellow Springs as in surrounding communities, Kristensen said, so property values shouldn’t have dropped as much. There have been few foreclosures here (just two in the last year, along with one estate sale), in which the homes sold for far below the list price. And higher end homes have started to appraise and sell, indicative of a strong market.

While many homes have sold in the $200,000 to $300,000 range in recent years, few sold for more than $300,000. With the lack of comparable sales on the market, these homes were not being appraised for their list price, Kristensen said. But this year, two homes have sold for more than $300,000, good news for the property owners of nine homes in this range currently on the market. Another good sign is that earlier in the year home listings dropped down to 20, putting Yellow Springs briefly in a sellers’ market.

But it has predominantly been a buyers’ market over the last few years, according to Kristensen. Currently there are 34 properties on the Multiple Listing Service, from $99,000 and $468,000.

“There are fewer buyers and buyers can still be choosy as there is a lot of supply out there,” Kristensen said.

Stickelman contends that local appraised property values should have fallen because of this lower demand.

According to his analysis, Stickelman said homes valued at more than $300,000 have lost more value than homes in lower price ranges. Those between $200,000 and $300,00, which make up the bulk of current listings, have declined by a smaller percentage as sales had been strong in that category until this summer, Stickelman said. Currently 11 homes are listed for under $200,000, the highest amount in some years, he added.

Also indicative of low demand is the drop in closings here since the collapse of the real estate market in 2008, which in turn affects the accuracy of the county’s appraisal model.

“The auditor has not adjusted values down for Yellow Springs because there’s not enough data for their models,” Stickelman said. “They would’ve seen properties drop.”

However, strict credit requirements are partly to blame for reducing the number of sales that close, especially for higher-end properties, Stickelman said. (Today about 80 percent of transactions fail to close because of lack of financing, he believes.)

Implications of re-appraisal

To Stickelman, the county is “playing it safe” in its re-appraisal, which is a challenge for local taxpayers and housing affordability even while this approach continues to provide stable funding for the Village and school district.

“[Homeowners] want [their homes] to be worth more, but for the county to think it’s less so they can pay less real estate taxes,” he said.

With the Village spending more to maintain aging infrastructure and receiving less funding from the state, services may ultimately have to be cut, which would in turn affect the Yellow Springs housing market.

“It’s because people are buying the community — that’s why we get such high, relatively speaking, sales prices compared to the county,” Stickelman said. “But if our community starts to weaken economically, [property values] will give.”

According to unofficial figures provided to the Yellow Springs School District, property valuations within the district stayed flat. The net impact on village schools is negligible, and since the district is operating on its 20-mill floor, it cannot collect less than that amount, even if property values went down. For Village government, 2011 collections decreased by three percent, largely due to delinquencies, and the county has said its tax receipts should remain consistent next year.

More important for generating new revenue for the district and Village is new construction, which adds new properties to the tax rolls. Residential and commercial construction in the village has been slow in recent years and there’s no new construction projects slated for 2012, according to Village Finance Director Sharon Potter. Several other construction projects are in the early planning stages, such as the Village Station commercial building downtown, the commercial and light industrial Center for Business and Education and the residential senior affordable housing apartments on the Barr property.

In the long run, new tax revenues may have to be found, whether in new construction or new income tax sources, to maintain Village services and the town’s attractiveness, Wintrow said.

“We’re going to have to hope that we increase jobs in the village and that that brings some more income in,” she said.

Property owners can discuss their re-appraisal values by contacting the county auditor’s office at 937-562-5621 and may contest the value by presenting their case before the board of revision, which consists of the County Auditor, Treasurer and a representative for the county commissioners.

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