Atlanta property taxes: Foreclosures, frustration define Clayton’s market

The county’s chief appraiser, Rodney McDaniel, said the declines in Clayton’s 2010 property valuations surprised even him.

“I didn’t think we could go much lower than we did last year,” McDaniel said. “But the foreclosure sales are really driving the assessments this year.”

For property owners, the plague of foreclosures has injected even more uncertainty into an uncertain market, particularly when it comes to county tax appraisals.

Last year, they saw little relief in their tax bills and valuations even though property values were plunging. But this year, the numbers are dramatically different, leaving some wondering whether their valuations are too low, while others are sure theirs are still too high.

The county’s typical appraised value for 2010 was $90,589, according to the AJC’s analysis, a decline of 25 percent from last year. The typical sale price, meanwhile, was $80,656.

The reductions in 2010 tax bills cut one way for county taxpayers and the other way for county officials: Lower tax bills mean more money for property owners and less money for local government.

“This certainly creates an issue for the county, in terms of revenue,” McDaniel said. “The tax digest took a pretty significant hit over this.”

For the second consecutive year, The Atlanta Journal-Constitution compared county tax appraisals to actual home sales prices in the five largest metro counties to determine whether the counties are appraising properties for more than they’re actually worth.

The newspaper found that, on average, Cobb and Fulton tax values were slightly less than sales prices, and Gwinnett tax appraisals were slightly higher than sales prices. In Clayton the disparity was 7 percent, while in DeKalb it leaped to 25 percent.

When a county’s tax appraisal of a house is higher than the market value of the house, the homeowner will pay too much in property taxes.

Of the 15 ZIP codes that make up Clayton County, ZIP code 30288 — which includes Conley and portions of Moreland Avenue, I-675 and I-285 — had the largest drop in appraised value this year: 37 percent.

The other end of the scale occurred in ZIP code 30236, which is just southwest of I-75 and includes Jonesboro. The appraisals of more than 11,300 homes went down by about 15 percent, the smallest decrease in the county. There were 156 home sales in 30236 last year, with a typical sale price of $95,428. The average appraisal value, however, was $124,443, which ended up being 9.1 percent over market value.

When Clayton reappraised property in the spring, about 72,000 homes — more than 85 percent of all residential parcels in the county — were tagged with lower values. As a result, the tax digest decreased by more than $2 billion. These changes in valuations helped close a chasm seen last year between sales values and tax values, but many homeowners are now stunned by the values they’ve been saddled with.

Tale of two taxpayers

Christine McCrorey and Almeda Vessels both live in Clayton County’s southern panhandle. Both saw their tax appraisals reduced, but neither is bowled over by the result.

McCrorey is grateful for the $430 savings over last year’s tax bill, but says her county-assigned fair market value is still more than she paid for her home two years ago, and should be lower.

Vessels, meanwhile, likes saving $880 on her annual tax bill, but thinks the fair market value assigned to her home by the county is too low.

McCrorey lives in ZIP code 30228. Her subdivision off Panhandle Road has more vacant, overgrown lots than finished homes. And many of the homes in her subdivision have been foreclosed upon and sold again at much lower prices, including the one she bought two years ago.

In 30228, the typical appraisal for tax purposes was $106,641, a 22 percent drop from 2009. But that still wasn’t a steep enough fall to match the decline in sale prices in the area. Last year, there were more home sales in 30228 than in any other ZIP code in the county, and the typical sale price was $95,513.

This year, the county lowered its appraisal of McCrorey’s home to $135,945. But she knows she couldn’t get that much for her home if she wanted to sell it, especially with the surrounding neighborhood in such disrepair.

“All of the homes left to sell around here have dropped under $100,000,” McCrorey said. “And when I called the county to ask about my tax bill, they basically said we’d have to wait until more homes sell at a lower price to see any change in the tax bill.”

Too sharp a slide

Vessels complaint is completely different. She lives in the Clayton portion of ZIP code 30215, where reappraisals sank about 35 percent. Her tax appraisal went from $170,628 to $109,070 — down 36 percent.

That’s far too sharp a slide for Vessels.

“It’s not that I think the homes were assessed improperly. I just think the value assigned to my home is way too low,” she said.

“I know I can sell my house for more than what the county said the fair market value is. But on the other hand, that value is tied to what I pay in taxes, and I don’t think I should be paying any more than what we were charged this year, and maybe less.”

Foreclosure-driven

What’s happening in Clayton County could be considered the worst-case scenario: a home sales market driven by foreclosures.

“When we re-evaluated property for the 2009 tax year we considered the foreclosures, because that was what the law required of us,” McDaniel, the county’s chief appraiser, said. “But this year, we had to do more than consider those sales because those sales were the marketplace this tax year. There was no way around that.”

McDaniel said there are still a significant number of foreclosure sales going on in the county that will likely have a direct effect on the 2011 tax year.

Adrian and Bonnie Fourakre hope the county tax assessor’s office has learned a lesson or two during the past couple of years of revaluations.

“The way I see it, the government shouldn’t base its budget on how much money it thinks it is going to get,” Adrian Fourakre said. “I couldn’t run my business like that.”

The Fourakres own 14 acres, including a Christmas tree farm, near the southern tip of the panhandle. The county lowered their appraisal from $152,698 in 2009 to $87,398 in the 2010 tax year.

Fourakre said he wouldn’t have a successful business if he routinely overcharged his customers. He said the county slapped a $25,000-per-acre value on two acres that can never be developed because it is a marsh.

“They did come out here and correct it, but only because I said something,” he said. “And as long as I keep farming and can keep my covenant on the farm, the taxes will be manageable. But if I ever lose the covenant, well ... I’d rather not think about that.”