NEWS - Residential Real Estate

Questions Remain About Chatham County Valuations

By Lou Phelps
SBJ Staff

In June, the Chatham County Tax Assessors mailed out 67,000 “Notice of Change in Valuation” to property owners out of the approximately 90,000 pieces of real property in the county.

Most of those notices informed both residential and commercial property owners that their property had declined in value from 1 percent to as much as 13.7 percent...or more.

Publicly, it was announced that property declined 3.79 percent decline across the county, which cut projected revenues for the County about $6 million for the current fiscal year. “It would have been more, but we have a lot of exemptions such as Stephens Day,” explained Linda Cramer, Director of Finance for Chatham County.

In fact, the value of the County’s property known as the “gross tax digest” - without taking into account exemptions such as Stephens-Day valuations – actually went down from $14,605,162,269 down to $13,895,178,692, a 4.86 percent drop in one year.

But in most neighborhoods, and for existing homes, the declines were far more severe. The county’s total decline was offset by new construction that came onto the tax rolls during the prior 12 months. For existing property, the valuation numbers are grim.

A review of hundreds of property record cards also shows another anomaly. Only the home or building sitting on a lot decreased in value in the opinion of the tax assessors, but the lot itself actually increased in value or had no change.

Further, the assessors appeared to have increased the value of almost every lot in the County by a flat amount of either $100.00 or $200.00, no matter the valuation of the lot, versus a percentage increase based on historic valuation of the land itself. The buildings on the land are collapsing in value, but the land has increased in value?

For property owners, it sends confusing and mixed messages. If they have no mortgage, and don’t need to borrow against the asset, it means that their property tax bill will decline or at least not increase, based on the higher millage rates approved this year by the county and/or the Chatham County Public Schools.

But for many homeowners, the devaluation means that they are potentially “upside down” on their residential or commercial mortgage, and if they need to sell within the next few years, the prospect of fetching a price in line what they had believed their home or property was worth, is slim.

For the county, dependent on tax revenues to operate, there is another twist to the realities of property devaluation. In 2009, the Georgia General Assembly passed House Bill 233 which in effect freezes property values for three years, even if the property is sold. “What this means is that if a house is sold below its appraised value (e.g. foreclosed on or sold on a short sale), the property value would be impacted downward with no increase for three years (despite any higher resale value during that time). This factors in to the neighborhood values and the assessment changes,” Cramer adds.

Portrait of a Block in Ardsley Park
Ardsley Park is one of Savannah’s most beautiful and established neighborhoods, with historic trees and a series of neighborhood parks.
A review of the property record cards in the area show dramatic drops in valuation of the homes, and a flat rate $100.00 increase in land values for 2010 for most lots.

A review of a typical block in Ardsley Park –E. 50th Street between Abercorn and Bull Streets – tells the tale of property valuation changes across the area. (See chart.) On average, the homes declined in value 8.33 percent, with several down more than 12 percent.

According to Sheryl Snider, Chief Tax Assessor, the declines were due to the assessors’ annual valuation review that takes into account comparable and recent real estate sales and foreclosures within “a neighborhood group.” But this year, there was an additional factor that drove valuations down. The Assessors department discovered that the depreciation software in use was not accurate. When the software was updated, and correct depreciation schedules were used, there were significant property valuation declines for the building on each lot.

Neighborhood resident Marjorie Maddox was “not glad,” to receive a valuation that dropped the value of her home 11.07 percent in one year. “It’s a situation where you have desperate sellers, and they have to move and its substandard valuations,” she believes. “We had one house on the block go for $424,000 and another that’s now listed for $695,000, but the banks just don’t get it.”

But another neighbor, Teresa Lyon, believes that her new valuation, with a decline of 9.79 percent, is “probably about right. Probably, from the value of most of the houses in Georgia, I don’t think that’s really bad. Because a lot of other property has gone down in Georgia a lot more than that. We own another house in Fayette county (near Atlanta), and the value of that house has gone down significantly, about $80,000 to $90,000,” she estimates. She had not noticed that the Assessors had increased the value of her lot, however.

“It is a pretty drastic drop,” was the opinion of Paul Long at 30 E. 50th, who received a devaluation notice of 11.97 percent. He and his wife Daphne have owned their home in the neighborhood since 2002. “I don’t know whether it’s right or not. I’m not thrilled it went down that much. On the other hand, I know people that went to the assessors board last year, and they gave good valid reasons and research to get their property devalued, and the board just blew them off,” he said.
Cora Bett Thomas Realty has just listed a home in the neighborhood for sale for $695,000. The family paid $742,000 in 2007, and the County has now dropped the home’s value to $511,000, down 9.01 percent from last year. But it’s a rare home with a stately presence on the street. And according to Peter Nelson, spokesperson for the firm, the valuation does not take into account all of the improvements the homeowner has made such as a refurbished kitchen, new bathroom and significant landscaping.

More importantly, Nelson points out that the sales data from 2007 was never reflected on the property record. “Sometimes they update a card within 20 days of a sale,” he said, “and sometimes they never update a card.” In 2008, well after the $742,000 sale was recorded, the house and land combined were valued at only $562,500, 24 percent below the price the home had sold for the prior year.

Almost across the street, the 3,549 sq ft. beautiful home of Hunter Saussy at 2 East 50th St. was devalued 10.16 percent for 2010, down to $111.00 a sq ft plus the land. The lot was valued at $154,600…up $100.00 over 2009 value.

“I think they’re wrong,” he said. “I don’t see any change in the function of the home, the use, the finishes or the ground treatments,” Saussy said.
Terry Tolbert is the chairman of the Board of Assessors, serving with members Larry Lower, Brunette Mitchell-Dixon, Thomas Boondry and James A. Gunter who are all retirees except for him, according to Tolbert, and are all appointed by the Chatham County Commissioners. Each board member serves a four-year, staggered term, and earns a stipend of $200.00 bi-weekly as compensation for their service. Board members are required to go through the same training as the county’s paid appraisal staff.

The Board of Assessors is also responsible for the hiring and firing of the Chief Appraiser, a position currently held by Sheryl Snider.

He has personally experienced massive devaluation of residential property. Last year, his home on Nottingham Drive was devalued 50 percent “due to the sale of one home in our neighborhood group,” Tolbert said. When asked if he found that illogical, he said that the board “asked Sheryl about it, and received the information on the sale that was used to determine our values. Just a few blocks away on Country Walk, the homes were not devalued,” he added.

Tolbert is also the deputy director for the Economic Opportunity Authority for Savannah. The night the Chatham County Commission held its final public hearing on county valuations and the millage rate, Tolbert was wearing a different hat from chair of the Board of Assessors.

He had sent a letter several months earlier requesting $100,000 for the Economic Opportunity Authority, formed in 1965 with a joint resolution between the City, the County, and the Board of Public Education to deal with poverty in Chatham County. The group operates a number of programs, including youth programs and provision of energy assistance to families. He reported that between Nov. 2009 and April 2010, they saw 8500 families who needed energy assistance in Chatham County. Arguably, he sees both sides of the property valuation issues as they directly affect people’s lives and tax bills.