The Atlanta Journal-Constitution
Tomas Rivera lives on an island.
Jason Getz, jgetz@ajc.com
Tomas Rivera became a homeowner in Powder Springs’ Five Oaks neighborhood in 1999 and decided to remain, even after the 2009 flood. But his home’s value has taken a big hit.
His home in the Five Oaks neighborhood of Powder Springs is surrounded by empty houses with boarded up windows and a string of “For Sale” signs. Rivera survived the epochal flood of 2009, but parts of his neighborhood did not.
Water rose 6 feet in Rivera’s two-story home. Even though he was able to make repairs and remain in his house, a large chunk of his property’s value vanished with the floodwaters. The value has declined about $41,000 in the year since the flood, and, according to Cobb County tax appraisals, Rivera’s house is now worth far less than what he paid for it 11 years ago.
“I think the county’s value for my house is too low,” he said. “But overall I can’t really disagree because the values all over this area are low. This area is a mess.”
The floodwaters may have receded more than a year ago, but they have continued to wreak havoc on property values and the county’s finances.
Cobb has cut residential property values countywide. An Atlanta Journal-Constitution analysis of 2010 housing data found that the typical Cobb appraisal was 6.9 percent below market value.
For the second consecutive year, The Atlanta Journal-Constitution compared county tax appraisals to actual home sales prices in the five largest metro counties.
The newspaper examined hundreds of thousands of 2010 tax records and tens of thousands of 2009 sales to make the comparison. It found that Cobb and Fulton tax values were slightly less than sales prices, and Gwinnett tax appraisals were slightly higher than sales prices. Clayton County appraisals exceeded values by about 7 percent, but the disparity in DeKalb was 25 percent.
When a homeowner’s tax appraisal is higher than the actual value of the house, the homeowner is paying too much in property taxes.
Cobb County chief appraiser Phil Hogsed said he didn’t know enough about the AJC’s analysis to comment in detail. But he said the findings for his county did not surprise him.
Hogsed said the changing real estate market and changes in state law influenced Cobb’s appraisals this year. A 2009 state law required tax appraisers to take into account distressed sales — including short sales and bank sales — to set housing values, although it gave local governments no direction on how to factor in foreclosures.
“We’re just trying to reflect the market as it was on Jan. 1, 2010,” Hogsed said.
The county’s residential tax digest — the value of real and personal property that governments use to estimate tax revenues and determine budgets — has dropped 10 percent, or $5 billion, this year. In areas where the flooding was worse, the digest dropped even further: 16 percent, or $74 million, for Powder Springs and 18 percent, or $44 million, for Austell.
A look at Cobb’s property tax values for this year shows the largest declines run along Olley and Sweetwater creeks in Austell and Powder Springs. Countywide, homeowners whose property values dropped this year saw an average reduction of 19.8 percent from last year, according to data compiled by the AJC this month.
Rivera’s ZIP code in Powder Springs, 30127, saw a 22.3 percent value drop. Homes in that area were appraised at 7 percent below market value. Residents in ZIP codes 30106 and 30168 in Austell, along with 30060 in a part of Marietta, experienced the largest drop, more than 29 percent. Appraisals in those areas were between 6 percent and 9 percent below market value.
“We made some significant adjustments due to the flooding,” Hogsed said.
Some of those property owners were unhappy that their values were drastically lowered.
“To some degree you’re hurt by the event and then it’s confirmed when you get that assessment notice,” he said. “It’s a loss of investment.”
June Pierce-Hampton’s home in unincorporated Austell, in the 30106 ZIP code, was bought out by the county this year as part of a federal grant program after the flood. Hampton said she received $34,000 from the county for her home on Wesley Drive, before it’s leveled to the ground and cleared for green space.
“It wasn’t a bunch of money, but the way property values are now, it’s doable to take that and buy something else,” she said. “It’s sad to see homes in my neighborhood where people have lived for 10, 15 years now going for $35,000.”
County tax records show her home was valued at $127,540 last year, but dropped 76 percent to $29,990 in 2010.
Despite the flood and foreclosures, Cobb’s property values have been adequately adjusted, said Donna Heavener, executive of the Cobb Association of Realtors.
“We have a lot of high-end properties that are still selling. We are selling the $2 million houses, which offset the lower-priced homes on the foreclosure market,” she said.
Data compiled from her association show that the number of closed sales were down less than 1 percent from last year, with an average sale price of $225,781 across the county. Houses in 2010 sold for 94.8 percent of the listed price, compared to 88 percent in 2009.
“There has been so much talk about how bad the housing market is, but when you look at the statistics it seems to have plateaued,” Heavener said. “We didn’t hear a lot of people saying they were going to be contesting their assessments, which to me indicates that the values are where they need to be.”
Last year, Cobb had 3,872 residential appeals, compared to 3,415 appeals this year, the lowest of the five core metro counties, according to Cobb data. However, residential property tax returns filed by homeowners this year asking for a lower appraisal on their homes increased by 3,557 over last year to 12,877 returns.
“I would think that the problem we have is with falling home values. Appraisals have not kept pace with that. I would not like to think that the county would go out of its way to reduce appraised values,” said Lance Lamberton, president of the Cobb County Taxpayers Association. “I want people to be appraised at market value, whether [home values] decline or increase.”
Lamberton, an Austell resident, successfully appealed his tax bill last year because comparable homes in the neighborhood were selling for significantly less than his home’s appraised value.
“I would encourage homeowners to do what I did, and not wait for the county to do it for you,” he said.
Overall, appraisals throughout the metro area, including Cobb County, are still too high, said David Humphreys, president of Equitax USA, which handles thousands of property tax appeals in the metro area each year.
“They are giving slight reductions up front before you appeal, hoping it will appease people, and people are saying that is not enough when actual values have dropped by double-digits in the last 24 months,” he said. “I think it’s because counties need to generate revenue and it’s politically unfavorable for politicians to vote for tax increases.”
To come up with the money, Humphreys said, politicians tell county tax assessors to keep property values up.
“Counties should be fair to taxpayers,” he said. “And counties need to tighten their belts and work with the lower revenues.”
In Powder Springs, Rivera’s former neighbor Tydus Tarver sees himself as one of the lucky ones. Although his house burned last year when floodwaters prevented county firefighters from reaching it, he paid off that home with insurance money and bought another one five minutes away.
As an AJC photographer was shooting Rivera, Tarver stopped by to check on his old property, now reduced to a slab of concrete.
“We lost everything there was to lose, but we’re OK,” Tarver said. “I had some friends in the neighborhood that are hurting. You can’t give those houses away now. It’s a terrible situation. It’s a dead neighborhood.”
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