Traverse City Record-Eagle

March 10, 2013

Upswing in regional property values

By BRIAN McGILLIVARY bmcgillivary@record-eagle.com
Traverse City Record-Eagle

---- — TRAVERSE CITY — A gradual upturn in Grand Traverse region property values means many homeowners should prepare themselves for higher property tax bills.

Traverse City and most of the townships in Grand Traverse County will see overall residential property assessments remain flat or rise by up to 5 percent. Higher property values effectively halt a slide prompted by the national housing market crash in 2008 that stripped more than 20 percent of the value from residential properties in some local townships.

Traverse City homeowners are witnessing the first significant overall property values increase -- 3 percent -- in four years.

“We’re pretty lucky being the city; the city has fared pretty well throughout all of this,” said Polly Cairns, Traverse City’s assessor. “We still have some pockets of foreclosures, but everything seems to be increasing, whether it’s a lot or a little.”

Overall residential values in the city dropped 1.7 percent in the previous 4 years.

Countywide, Grand Traverse values will increase about 1.5 percent, said Equalization Director James Baker, the county’s top assessor. That’s slightly better than surrounding counties that saw residential assessments remain flat or slightly decline.

“It appears the market has bottomed overall; there’s more turnover of homes and things have stabilized now,” Baker said.

More sales in Blair Township’s subdivisions helped stabilize prices, assessor Aaron Plowman said. The township lost more than 20 percent of its value the previous four years, but will see a 4 percent gain this year.

“We have a lot of starter homes out here and I think a lot of young people are looking to Blair,” Plowman said.

Seth Rousseau bought a home in Blair’s Boardman Ponds subdivision two years ago, after moving here from Saginaw.

“The last home we owned, the bottom fell out and we took a bath on it,” Rousseau said. “So its good to know our property value is going up.”

A $4,400 assessment increase surprised Richard Smith, who lives in Blair’s Belvedere subdivision. Assessments are half the property’s market value, and he doubts his home’s value truly jumped $8,800.

“People around here have had houses and they sold them and they lost a lot of money on them,” Smith said.

Residents who wish to dispute their assessment can file an appeal with township or city boards of review. Most meet for the first time Monday. Appeals can be filed in writing or in person. Property owners should contact their city or township assessor in advance to obtain deadline information and schedule an appointment when required.

Smith, who’s lived in the house with his family for 22 years, said a $24,000 gap between the taxable value and his assessment weighs against filing an appeal. Property taxes are based on the taxable value, which is capped by the rate of inflation, currently 2.4 percent.

Long-term homeowners like the Smiths developed large gaps between the taxable value and assessment because home values outpaced inflation prior to the recent real estate collapse.

Smith’s neighbor, Jim Kostic, successfully appealed his assessment last year and saw the figure lowered, but not enough to close the gap. Kostic said he isn’t happy about the impending property tax increase, a view shared by every homeowner the Record-Eagle interviewed, other than Rousseau, the Saginaw transplant.

He said it’s better to pay a little more in taxes than see values drop and the neighborhood deteriorate.

“The tax increase is something I can live with, given all the good it represents,” he said.

Counties outside of Grand Traverse were hit even harder over the last four years, and the recovery also appears slower. County equalization directors report home values have stabilized, but not uniformly.

Laurie Spencer, equalization director for Leelanau County, said values have stabilized overall, but the ups and downs of assessments depend on location. Glen Arbor Township property values dropped by almost 5 percent, while Leland and Empire townships jumped by about 4.5 percent.

Benzie County property values tended to rise for properties closer to Lake Michigan, and fell on the eastern side of the county, said Equalization Director Thomas Longanbach.

Antrim County residents and officials saw a similar phenomena.

“My decreases are mostly on the east side and the increases are mostly on the lake front and Shanty Creek,” said Robert Englebrecht, Antrim’s equalization director.

Englebrecht agrees values have stabilized, but isn’t so sure the housing market has hit bottom.

“It’s the current bottom,” he said. “Who knows what the bottom is going to be next year.”