After analyzing county property records, the Atlanta Journal-Constitution found that many metro Atlanta homeowners were paying too much in property taxes as counties struggled to keep up with the rapidly declining housing market.
Record numbers of homeowners responded by appealing their values, with many winning lower assessors on their properties. By state law, those values are must remain in place for at least two years unless the property has sold or underwent improvements.
This year, county appraisers are projecting values across metro Atlanta will remain mostly flat. The sign of stabilizing prices comes in part from the years when homeowners paid more in taxes than they should. The shift may signal a gradual rebound in prices – and the chance for local governments to better plan and perhaps begin
2012 total value of residential property: $10.2 billion (-8.8%)
Median 2012 county residential appraisal: $118,000
Typical residential property overvalued by: 0%
2012 residential property appeals: 2,398
Success rate for 2010-11 residential property appeals*: 60.2%
How the county stacks up: Cherokee was one of two counties in the metro area where the typical residential property appraisal was mostly accurate. The county's longtime practice is to assess every property value every year, which prevented some sticker shock as prices increased and decreased, said John Adams, chief appraiser. The AJC's 2011 analysis showed the typical property was overvalued by 3 percent, one of the best averages in the region.
"In the last 15 years, we've always tried to stay on top of the market as best we can, regardless of what direction it's in, " Adams said. "We feel like it's helped us when the taxpayers understand what's going on."
David Moody with ERA Sunrise Realty in Cherokee, said he and others in the real estate community have noticed the county's accuracy over the last 12 months. The county's assessment can effect negotiations because it serves as another indicator of where the value is, and with home values changing rapidly in recent years, its best to have the most up-to-date figure as possible, he said. "It effects how people are thinking, " he said. "I think we hit the bottom about 3 or 4 months ago. If we haven't hit bottom we're very close."A sampling of Cherokee tax appraisals3113 Royal Troon 30189
2012 total value of residential property: $5.5 billion (-17.5%)
Median 2012 county residential appraisal: $56,399
Typical residential property overvalued by: 48 %
2012 residential property appeals: 8,241
Success rate for 2010-11 residential property appeals*: 81.7 %
How the county stacks up: Clayton's ongoing school woes continue to drag on the county's economy and home values. "People are nervous because of statements by SACS (accrediting agency) that if the (school board) didn't get their act together they'd lose accreditation again, " said Donna Tidwell of HomeTeam Realty in McDonough.
So far, county tax assessors have handled more than 1,100 more property tax appeals than last year. And there's more 2012 appeals ahead, Chief Appraiser Rodney McDaniel said. "It's not about values anymore, " McDaniel said. "We've reduced the taxes significantly over the last several years. Now, it's just about the taxes are just too high, period."
Some areas of Clayton such as Holiday Hills, an older neighborhood near Morrow, have seen as much as a 75 percent drop in home values. Even with last year's 34 percent tax hike, Clayton homeowners are paying less taxes than they did in 2008 and 2009, McDaniel said. More good news: New foreclosures were down nearly 78 percent in October, the latest data available, and the average home price in Clayton rose 1.5 percent during that same time, according HomeTeam Realty research. "Things are looking up in Clayton, " Tidwell said. A sampling of Clayton tax appraisals10884 Southshore Ct.
2012 total value of residential property: $39.8 billion (-6.4%)
Median 2012 county residential appraisal: $139,440
Typical residential property overvalued by: 7%
2012 residential property appeals: 4,924
Success rate for 2010-11 residential property appeals*: 46.0%
How the county stacks up: The typical Cobb County residential property appraisal was about 7 percent too high this year --- an improvement over last year, when the typical property was overvalued by 13 percent. Chief Appraiser Phil Hogsed said that could be evidence the market is stabilizing. Hogsed said there's less inventory in the Cobb market and fewer foreclosures. "We're seeing a smaller volume of distressed sales and as that continues, that will have less weight on market values, " he said.
Jack Athey, who lives in northeast Cobb, says the county still isn't getting it right. Athey hired an outside appraiser who valued his three-bedroom home at $175,000 in 2012. In 2012, the home was assessed by the county for $224,500. He appealed the decision, and the assessment was reduced to $214,000, which he is also disputing. "It would appear they are ignoring the 40 percent drop in housing values and instead looking at their budgets." A sampling of Cobb tax appraisals4549 Pembroke Dr. 30082
2012 total value of residential property: $29.3 billion (-12.2%)
Median 2012 county residential appraisal: $80,100
Typical residential property overvalued by: 5%
2012 residential property appeals: 14,191
Success rate for 2010-11 residential property appeals*: 60.4%
How the county stacks up: DeKalb's valuations continued to improve this year, with assessments on the typical residential property coming in at 5 percent over sales prices.
Last year, the disparity was 10 percent over.
Chief Appraiser Calvin Hicks said the county has continued to become more accurate in part because of an ongoing willingness to cut its estimated values, slashing by 23 percent over the past two years. For the most part, though, values appear to be stabilizing, just at lower prices than at the peak of the boom.
That's what DeWayne and Sherry Miller found when they bought a home in the Hidden Hills golf community. The couple paid $2,500 more than the $79,000 assessment for the house. The reason: to cover the seller's closing costs. "They had just put it on the market and we knew we'd found the house we want, " Sherry Miller said. "We're happy with what we paid."
2012 total value of residential property: $5.2 billion (-5.6%)
Median 2012 county residential appraisal: $88,100
Typical residential property overvalued by: 36%
2012 residential property appeals: 3,348
Success rate for 2010-11 residential property appeals*: 40.1%
How the county stacks up: Bruce James is almost becoming a regular in the tax appraiser's office. Last year, he appealed the appraisal on his home in Winston and ended up knocking off about $50,000 in value.
"I did well, " he said. "I had irrefutable numbers."
This year, he purchased a nearby lot for $9,000 in January. The county appraised it for $22,800, so he was back before the board of equalization to contest it. Again, he had documentation the county couldn't refute, so no opposition was raised.
The area is still two or three years from seeing normal housing market patterns, Chief Appraiser Benny Waldrop said. Belying the overall accuracy of appraisals on current sales, he said, is the fact that close to two-thirds are bank or HUD sales. This not only skews sale prices downward for these homes but also artificially lowers sale prices of person-to-person transactions.
State audits show that the county is close to the mark on setting values for homes sold by traditional means, he said.
2012 total value of residential property: $7.5 billion (-12.1%)
Median 2012 county residential appraisal: $164,400
Typical residential property overvalued by: 6%
2012 residential property appeals: 1,504
Success rate for 2010-11 residential property appeals*: 78.7%
How the county stacks up: It's been a tough year in Fayette County. Chief appraiser Joel Benton has seen more bank sales this year than at any time in 19 years in the job. The county tax digest also fell 10 percent - the biggest hit since the economy began its descent five years ago.
Some parts of the county remain stable: Peachtree City has avoided lots of foreclosures. Overall, though, county property values have yet to stabilize but Benton says they're not dropping as much. "Fayette was insulated for a while, " Benton said. "It took longer for foreclosures to hit the county."
While appeals are down slightly, some people have yet to accept what's happened to home values and they're arguing for higher taxes. "We're still seeing people appeal to have values lowered but we're also seeing a recent trend of more people appealing, wanting their property values to be raised." Not Fayetteville homeowner Reuben Lewis. "Property taxes are too high, " Lewis said. "I don't think any municipality is taking into account the current economic climate and how it's affecting real estate. They're just trying to keep revenues coming in."
2012 total value of residential property: $15.4 billion (-4.8%)
Median 2012 county residential appraisal: $176,730
Typical residential property overvalued by: 0%
2012 residential property appeals: 3,571
Success rate for 2010-11 residential property appeals*: 56.1%
How the county stacks up: There are still bank sales in Forsyth County, but the rate is nowhere near where it has been, chief appraiser Mary Kirkpatrick said. "Some areas are picking up in new construction again, but I'm not sure that we're on the upswing, " she said.
The county has had 4,451 foreclosures since 2007. In 2010, there were 1,546. Last year, that number fell to 769, and Kirkpatrick expects even fewer this year. The growing stability, she said, helps her office set appraisals close to current sale values.
But there are still appeals.
Cumming resident Scott Steiner bought his house in the Castlebrook neighborhood in 2010 for $270,000. That's what the county appraised it at last year. But this year, the value climbed to $288,050. "I feel at minimum, it should've stayed the same, " he said. "My house has not devalued commensurate with the others in the county much less the others in my own neighborhood."
2012 total value of residential property: $63 billion (-3.9%)
Median 2012 county residential appraisal: $48,840
Typical residential property overvalued by: 5%
2012 residential property appeals: 20,950
Success rate for 2010-11 residential property appeals*: 57.2%
How the county stacks up: The typical Fulton County home is appraised about 5 percent over market value, marking a slight improvement from last year's 7 percent figure.
For all the taxpayer revolt in the state's largest county, Fulton remains within the state Department of Revenue's standard of no more than 10 percent over- or undervalued. One explanation for the assessments: a real estate market that is beginning to stabilize.
Chief Appraiser David Fitzgibbon said property values aren't declining as rapidly, making it easier for his staff of assessors to keep pace. The newspaper's findings don't mean that every property is overvalued by 5 percent; some might be more overvalued, others might be undervalued.
A sunny macro picture offers little comfort to those duking it out in appeals. Karen Goeckel wanted the county's $602,300 value on her Inman Park home lowered to about $450,000, putting her in line with her closest neighbors' values and lowering her taxes by $2,700. The county has agreed to $549,000. "That's still ridiculous, " Goeckel said. "It's like they just put addresses in a box and shook it up, then pulled out which ones they were going to over-assess."
2012 total value of residential property: $37.7 billion (change from 2011: -8.0%)
Median 2012 county residential appraisal: $130,300
Typical residential property overvalued by: 13%
2012 residential property appeals: 21,849
Success rate for 2010-11 residential property appeals*: 73.9%
How the county stacks up: Gwinnett cut residential values 8 percent this year, but its typical residential appraisal remains 13 percent over market value. That's higher than many other metro counties.
Chief Appraiser Steve Pruitt said bank sales are a big reason. Gwinnett has led the area in foreclosures for the past two years. When banks foreclose on and resell properties, they often do so for pennies on the dollar, driving down prices faster than appraisers can cut. Pruitt said bank prices also don't reflect the true market value of real estate because the price doesn't take into account federal mortgage insurance banks receive. That makes it hard for appraisers, he said.
Bank sales also take a toll on people like Michael McComber of Norcross. The value of his house has declined more than 50 percent since he bought it seven years ago, and he blames nearby foreclosures and other distressed sales. "My street has been hammered with all kinds of bad news, " McComber said.
2012 total value of residential property: $7.3 billion (-18%)
Median 2012 county residential appraisal: $78,700
Typical residential property overvalued by: 4%
2012 residential property appeals: 2,754
Success rate for 2010-11 residential property appeals*: 56.3%
How the county stacks up: After years of collapse, Henry County is seeing signs of stability in the housing market. While bank sales and HUD sales have dominated the market, traditional home sales were up this year, Chief Appraiser Charles Reddoch said. Those sales accounted for about 42 percent of home purchases.
This could be good news to an area where residential values fell 18 percent in 2010, another 9 percent in 2011 and 18 percent this year.
The county has cut its operating budget from $132 million in 2009 to $115 million this year. But even with a reduction in staff, elimination of vacant positions and furloughs, county commissioners passed a 23 percent increase in the tax rate this year.
"Basically, we reduced the overall size of government by about 6 percent, " County Commission Chairman Elizabeth Mathis said.
2012 total value of residential property: $3.7 billion (-6.3%)
Median 2012 county residential appraisal: $100,400
Typical residential property overvalued by: 57%
2012 residential property appeals: 1,874
Success rate for 2010-11 residential property appeals*: 42.5%
How the county stacks up: Rockdale County has the worst disparity between appraisals and actual sales in metro Atlanta, with values of typical homes assessed at 57 percent higher than sales prices for the first quarter of the year.
Lynn Cumbie, the deputy director of the county's Board of Assessors, notes that prices in region's smallest county continued to decline this year because the majority of home sales were foreclosures or sales of distressed properties. County officials do not lower all properties in a neighborhood to that level if only a few sales are recorded, Cumbie said, but assessors have tried to keep up with the falling values overall.
Realtor Ronnie Burrell, though, worries that the county doesn't want to slash to market value because there is no political will to then raise tax rates to fund county operations and services. That means Rockdale is still something of a buyer's market, he said.
"If they have to sell, they're selling, " said Burrell, a broker with Southern Classic Realtors and the past president of the East Metro Board of Realtors. "But the assessment doesn't have anything to do with what people can actually get for their property."
How we go this story
Local governments and schools reap billions of dollars from property taxes that depend in part on the value of real estate. For the tax burden to be distributed fairly, county appraisers must accurately determine the value of that real estate.
The Atlanta Journal-Constitution wanted to know: Are appraisers accurately valuing residential property?
Since 2009 the newspaper has compared official tax values to sale prices in metro Atlanta counties. This year the AJC analyzed appraisals in 11 metro counties: Cherokee, Clayton, Cobb, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry and Rockdale.
The AJC analyzed hundreds of thousands of tax records and tens of thousands of sales. The newspaper analyzed the data using a method similar to the one appraisers use to check their own work --- comparing the appraised value of homes that sold with the actual sales prices.
The newspaper compared the sale prices of residential properties that sold in the first three months of 2012 to their 2012 county values.
We used only sales that counties identified as valid, arm's length transactions under state law.
For each property, we divided the county appraised value by the sale price to produce a ratio.
If the county valued a property at $200,000 as of Jan. 1, 2012, but it sold for $175,000 on Feb. 1, 2012, the ratio would be about 1.14 (200,000/175,000=1.14).
That means the county's value was 14 percent over market value, as determined by the sale price.
After calculating a ratio for properties that sold in the first quarter of 2012, we eliminated outliers using standards set by the International Association of Assessing Officers.
The newspaper then determined the median ratio for each county and for various ZIP codes within the counties.
For example, in Cobb County, the median ratio was 1.07, indicating that the typical county appraisal was 7 percent over market value.
This ratio analysis is the generally accepted method for comparing county appraisals to sales.
The state Department of Audits and Accounts uses this method when checking the accuracy of county appraisals annually.