The tax assessor tally for San Francisco homeowners is in: 1,673 requests for property value reevaluations, 810 reductions granted (of which hopefully reader Rillion was one), and an average reduction of 11.5%/$137,057 citywide (in other words, we’re not just talking about the “cheap” stuff).
UPDATE: A comment from a consistently plugged-in broker:
Even though I have proof in the form of apples to apples sales comps that my home value has declined 15%, I was denied a reduction and have to go to a full hearing.
The City is being selective and arbitrary in this whole process. Yes, I am a broker, but I am also the owner of a declining asset.
Obviously our Mystery Realtor must be “cherry picking” those apples…
∙ JustQuotes: It’s Time To Make Some Property Tax Lemonade [SocketSite]
∙ More than 800 homeowners granted a reduction in assessed value [Examiner]
roughly 48% of the home values were reduced on average of 11.5%. If you add the 52% of the homes that were not reassessed lower then you have an overall value reduction of 5.75%. Rough numbers but does that analysis seem right to the math wizards out there?
K&L,
I bought my home in 1893. It was not reassessed lower. Therefore, I conclude home prices have not fallen.
Does that answer your question?
The key of the issue is: Does the tax assessor office responds only by A:”Yes/No” or does it respond with a B:”Yes/No/Compromise”.
If this is option A, then we could assume the rejected requests were too outlandish to be corrected. And the 11.5% do reflect what the tax assessors think is where the prices are.
If this is option B, this would mean the rejects were done based on actual numbers. They couldn’t make a compromise because they didn’t think it was warranted (prices hadn’t gone down).
Anybody has an insight?
Even though I have proof in the form of apples to apples sales comps that my home value has declined 15%, I was denied a reduction and have to go to a full hearing.
The City is being selective and arbitrary in this whole process. Yes, I am a broker, but I am also the owner of a declining asset.
M.R.
The assessor isn’t doing anything more than we are when we look at the comps. The assessor just has a political agenda to keep tax revenues high. I don’t think the assessors opinion of SF values adds anything to the data we already have.
In response to K&L’s question, one can’t determine from the given data the change in price of all homes. There is likely a selection bias of which homeowners submitted requests for reduction in value of their homes, so that it is not a represntative sample of all homes in SF (in terms of type of housing, when purchased, which neighborhoods and/or condo buildings, etc).
I have a question on this tangent that I’d appreciate your opinions on. What year’s prices are we back to? I am looking at a 1/1 condo in south beach, but their asking price is higher than what the owner bought for in 2005, and i’m trying to find a good starting offer.
I don’t think the assessors opinion of SF values adds anything to the data we already have.
I think it does add that there are places in the city losing value, because the assessor will fight like stink to not lower assessments. (causes lower revenue).
that said: I agree with Dan. there is huge selection bias in this and thus we can’t make much from it except that some areas in the city seem to be experiencing declines (which we already knew)
what would be interesting would be to compare this years assessment reduction percentage with prior year reductions and see if
-there are more properties getting reassessed lower compared to prior years
-if the reduction is more than in prior years.
to echo M.R., I was denied a lower assessment as well despite a comp from two of my neighbors with the same apartment. The assessor chose to look at a different comp-larger unit- in the same building from six months earlier and refused to lower the assessment at all- even raised it 2%. Ridiculous.
On the other hand, I’m closing on a refi tomorrow and the bank juiced the appraisal so we could get the lowest rate. That will save much more money in the long run than higher prop taxes for this year.
Unfortunately mine was denied. Also unfortunately it would cost me more to appeal it and get an appraisal then it is to pay the increase. So I’ve already made a pledge to donate an amount equal to the increase to anyone that challenges Ting and I will also volunteer my time for their campaign.
I bought a reo home for $550,000 last year. Assessed value was $744,900 or something based on past sale price of $730,000.
The assessor decided to value my baseline value amount at $650,000 based on comps from a different neighborhood in far superior condition. And did not use a comps of a very similar home that sold 2 blocks away in less than a months time for $525,000.
Obviously I am furious and went before the informal hearing officer who agreed with me and suggested the property tax base should be changed to $550,000.
The city assessor is appealing the decision and wants a full hearing!
What an unbelievable load of poop!
every one of these lowered appraisals means less money for the SF coffers. It takes money to limit restaurants in North Beach you know!
@joe realtor
So foreclosure prices should be used when assessing for property tax, but not as comps when assessing the value of neighboring homes?
bobTrouser,
His requested assessed value is what he PAID! That’s pretty outrageous that he paid 550 and they immediately assessed it higher. I thought they had to assess it in the first year for what the owner paid.
tipster,
i agree totally, but what he paid should also be used when calculating comps for the neighborhood.
which , to my understanding, isn’t always the case.
‘distressed property’ and all that.
condoshopper,
I think you could go with the assumption that the prices are back to 1/1/5. In terms of making an offer, depending on how much you love this place, you could make a) a lowball offer b) an offer that makes sense to you or c) at the most equal to the price they last paid. If I was selling, I would be happy to get that in this environment.
Based on what I have read here on SS, I have come to believe 1/1’s should not go for more that 150 times the monthly rental value. But if I really loved a place, I would go as high as 200 times.
Would sure love to hear what you do and what transpires!
“Based on what I have read here on SS, I have come to believe 1/1’s should not go for more that 150 times the monthly rental value.”
if i used this metric, i would be expecting to buy a 1200 sq ft. 2bd 2ba with covered parking in pac hts for $345,000
uh, spencer. read again:
the poster clearly stated the metric was for a 1/1.
thus, you can’t use the metric for a 2/2.
I submitted a request for informal review and they reduced the assessed value by 16 percent within 5 days. I agree it’s somewhat arbitrary. Maybe it has to do with the reviewer.
spencer, I should have said that with prices at more that 150 times the monthly rental value, don’t buy. Rent instead 🙂 (It’s just housing… or will soon be.)
My request was denied. But one of my neighbors in the same building was successful in getting a reduction. Guess it depends on who reviews the request and what type of day they’re having.
Thanks chuckie, for the input. I’ll be sure to report back if i go forward with it.
Chuckie wrote:
> Based on what I have read here on SS, I have come to
> believe 1/1’s should not go for more than 150 times the
> monthly rental value. But if I really loved a place, I would
> go as high as 200 times.
Most people in real estate talk about gross rent multiples (GRMs) in terms of annual rent so 150x the monthly rent would be a GRM of 12.5x and 200x would be a GRM of 16.67x.
A GRM of 12 is on the historical low side for prime residential real estate, but is very high for typical rental homes. If you buy quality stuff in the 12-17 GRM range you should be fine.
Then Spencer (who couldn’t find the shift key and didn’t notice that 1/1 means one bedroom) wrote:
> if i used this metric, i would be expecting to buy a
>1200 sq ft. 2bd 2ba with covered parking in pac hts
> or $345,000
I just found the Pacific Heights 2/2 below with parking renting for $3,650 a month at 14x the gross annual rents it should sell for $613,200 (my guess is that is what 2/2 condos in the area will be selling for in early 2010).
http://sfbay.craigslist.org/sfc/apa/871060908.html
I believe the law allows the assessor to use ‘market value’ in cases where buyer got a ‘deal’, a ‘steal’, or other arrangement that was not ‘market value’ (relative, friend, fraud), but obviously needs to use valid comps. It’s sure possible today with REOs to get a ‘deal/steal’.
Yes, prop 13 is supposed to set property tax at a level established by the purchase price and then subsequently allow for incremental increases every year as we all know.
In this case the assessor felt that I got a below market price and the property was actually valued $100,000 MORE than I bought it for at the time of purchase. And the assessor did not have any knowledge that I know of that I am a Realtor.
The property was listed in the MLS by Prudential, had a 2.5% commission offered, lockbox, everything normal. I was one of 3 offers written within 36 hours or so. All around asking price, but I had no contingencies.
I am not talking about a decline in value from my purchase as this thread is about. But the Base value assessment by the city.
So be very aware of this anybody buying property that has an assessed value currently higher than the purchase/market value.
This is all very interesting. They just raised my taxes about 8%. Not sure I could fight it since the last couple houses in my neighborhood sold for more than I paid and my last appraisal.
Has anyone else experience an increase?
“They just raised my taxes about 8%.”
Hahn? Prop. 13 limits the initial amount of tax to 1% of the purchase price with a maximum increase of 2%/annum thereafter.
I submitted a request for informal review (via fax), and I got a denial response in the mail 36 hours later. I honestly don’t think the value of my property has dropped by more than 10%, but I filed for a formal appeal — partially out of anger. I’m looking forward to going before the appeals board and making my case….or at least getting them to make their case.
Unlike some of you, I don’t really have any good comps for my home. There are some recent sales that suggest a higher price and some that suggest lower, but none of them are really comparable to our place. Either way, I’m convinced that the assessment process is pretty arbitrary.
I submitted the informal appeal with 6 comps I found via property shark. I did all the math re $/sq ft, etc. and made it very easy for them to see how I came to my new assessed value. Approved, without any objections or bickering for 10% below what I paid. Very easy, and I was able to cherry pick the comps.
That’s a rare instance that the assessor will value a property at higher than the sales price, but an REO sale would be the time to do it (assuming it had a limited marketing period and the bank had a high motivation to offload the property quickly). And yes, Prop. 13 calls for the base assessment to be adjusted to market rate upon more than 50% transfer of a property. They usually use the sales price, but can use a different number if they feel it is justified and supported in their appraisal of the estimated market value.
BTW, there is an interesting story and map on what neighborhoods are seeing property tax reductions. The reduction numbers for my district are pretty low. It looks like a lot of the lowered assessments are happening in district 9 (SoMa, Bernal, etc.).
http://www.sfgate.com/cgi-bin/object/article?f=/c/a/2008/10/08/BAG313D6DD.DTL&o=0
The reason there are so many reductions in District 9 is because there are so many SOMA condos sold in the past few years there. A home is much more likely to be assessed down if it was bought since 2005 or so and there are similar units that have recently sold for less. That describes more homes in SOMA than anywhere else.
Prop 13 caps assessed values – not property taxes:
“They just raised my TAXES about 8%.” After some research, I learned that for my home in particular there are a number of variables impacting the increase.
Read Prop 13 and you will learn that the assessed amount can be more than 2%. There are triggers.
Of course, the property rate went up (1.63%) and so did special assessments.
Prop 13 caps assessed values – not property taxes:
After some research, I learned that for my home in particular there are a number of variables impacting the increase.
Read Prop 13 and you will learn that the increase of the assessed amount can be more than 2%. There are triggers.
Of course, we all know that the property rate went up (1.63% of assessed value) and so did special assessments.
So a year late and quite a few dollars short the Assessor’s office granted my informal request for review and lowered my 09/10 assessed value by 25.7% from the “Prop 13 Base Year Value”. So after saying my place gained value from Feb 2007 to January 2008 they now say it dropped at least 25% from January 08 to January 09 (and 22.7% from when I purchased it).
joe realtor & helpful –
Your posts confuse me a bit. We bought a REO condo that we closed on in 4/09. We got our assessment notice with our names on it last years assessment of $950K and this years re-assessment of $870K. This is about $200K more than we paid. When we called the Assessor Office they said that it would be adjusted to the purchase price on the October tax bill and that we did not need to do anything. Haven’t received the bill yet, but with all the postings here and the other thread on assesszments I’m getting nervous.
San FronziScheme is back. We thought we had lost you with LMRiM!
Um… the comment from SanFronzi above is from 363 days ago.
Reminds me of that comment from marina girl a while back who said she was pretending the last year had never happend because here boy friend was an IBanker.
My bad, I just saw October…
Not sure how it reminds you of marina girl, but to each his/her own…