In 2002 I bought my house for X.
When it appraised it came in at 25.5% over X.
My property taxes having been going up the maximum amount by law to what the local goverenments believe is the market value. Now to be honest it never did reach the X + 25.5%.
The maximum state value was X + 13.2% So I thought it was just a matter of time and the two would converge.
So along comes the financial melt down and the realty market issues with down economies.
So I currently owe X - 13.2% (* I know this seems small but my down payment was after my divorce. *)
So when I get a new state equalized tax value it had dropped I thought it was just a market adjustment that was beign realized.
It dropped to X - 7.2%
So, I still think I could get out of my house and walk away if I had too.
But reality now enters into the equation.
I apply for a loan and the bank does not use the public data which would be X-7.2% but instead I find out that they decided to use recent sales within 1 mile of my home. All of these sales have been bank reposessions, and the value the assigned my house is X - 34.7%.
So the reality is that I have lost 60.2% of the value of my house, but as they look at the tax value to determine the state numbers for the market only 5% is the drop from my house value.
(* Note: for those in Michigan yes I know the state equalized values is doubled to determine the value of the house or better the tax value is considered half the market value. I adjusted for it in the above calculations and examples. *)
I wonder how bad it really is?
When it appraised it came in at 25.5% over X.
My property taxes having been going up the maximum amount by law to what the local goverenments believe is the market value. Now to be honest it never did reach the X + 25.5%.
The maximum state value was X + 13.2% So I thought it was just a matter of time and the two would converge.
So along comes the financial melt down and the realty market issues with down economies.
So I currently owe X - 13.2% (* I know this seems small but my down payment was after my divorce. *)
So when I get a new state equalized tax value it had dropped I thought it was just a market adjustment that was beign realized.
It dropped to X - 7.2%
So, I still think I could get out of my house and walk away if I had too.
But reality now enters into the equation.
I apply for a loan and the bank does not use the public data which would be X-7.2% but instead I find out that they decided to use recent sales within 1 mile of my home. All of these sales have been bank reposessions, and the value the assigned my house is X - 34.7%.
So the reality is that I have lost 60.2% of the value of my house, but as they look at the tax value to determine the state numbers for the market only 5% is the drop from my house value.
(* Note: for those in Michigan yes I know the state equalized values is doubled to determine the value of the house or better the tax value is considered half the market value. I adjusted for it in the above calculations and examples. *)
I wonder how bad it really is?
